How to finance Secondary Dwelling?

[Jeremiah Lee]

I'd like to build a Secondary Dwelling/Granny unit at my current property on the Central Coast of CA.  Thinking long term, what’s the smartest way to finance this project? I would assume I need to save up more money, but how much would you want to see in your account before building this secondary unit and what type of financing would you utilize? 

Location: San Luis Obispo, CA County 

Project

-Cost of construction approx. $200,000

-800 Sq Foot 2 bed/1 bath

-Estimated Rent $1,500-$1,700/month

Personal Assets

-SFH -Primary Residence on One Acre

-Last appraised $550,000

-Amount owed $390,000

-No other significant debt

-Credit score 770-780

-401k-$48,000

-Investment account-$31,000

-Income $100,000/yr