ADU financing options

[Marian Allen]

I am trying to decide on financing to build an ADU (maybe 300-500 square feet) to rent out to travel nurses outside of Atlanta in Decatur, GA. Cash out refi and HELOC likely aren't options as I've only been in my home one year and don't have enough equity in it.

1. I could potentially use my own money, but would likely deplete my reserves completely. 

2. Some sort of personal loan/construction loan. I know I've seen some people doing 0% apr credit cards for the first year and aggressively paying it off. 

Any other ideas or options that I haven't thought about? Appreciate any and all insight!

[Erika Calderon]

I started my ADU project October 2021, it is a little over 400 SQF. After a lot of research on ways to finance it, I decided to go with a HELOC, but before I could qualify I had to bring up my credit score. On the other hand my credit score was good enough to land me a credit card with zero interest for 18 month. As I worked on my credit score I started to fund this project with that one cc. After 3 months I was able to get my HELOC, I completed the project with that money I did the ADU as an owner builder and it took 9 months from when permits were approved to finish and have the unite rented. It probably would have taken me a lot less time but I did all the finishes on my own (tilling the floor, the bathroom, kitchen, install of faucets and sinks, trim and more). I did this for two reasons main one being that I wanted to learn what it takes to do the work and second because I had the time to do so. It is now renting for $1500 a month I still have funds from my HELOC, and on track to pay back in less than 2 years :), plus I now have this HELOC to help fund other projects, It may be a small project to some but its a step into my goals in real-estate.:)