Need $$ For an ADU in CA

[Nash Mittelman]

I am looking at ways to build and finance an ADU on my duplex in Richmond. Currently, I have a detached garage that needs to be torn down and I have to get creative with ways to add ADU. The challenge I'm running into is that with most construction loans, I would need to refinance my mortgage once the work is complete, where (today) I would probably be paying an upwards of 6% from my 3% mortgage, which totally skews the numbers.

Is anyone aware of amazing lines of credit or niche products for something like this.. I am looking for 100-200k... or is Hard Money the only option? Thanks BP! 

[Keira Hamilton]

Hey Nash! If you don't want to refi, then I would recommend looking into an unsecured personal loan. There are some with unrestricted use of funds and you'd be able to get the $200k depending on your FICO and income. You might also check out the Casita Coalition--they're a support network for people looking to build ADUs in California.

[Chris Seveney]

@Nash Mittelman

Best bet would be to get a private lender - if you have equity on the home they could easily use the current home as collateral for the adu build

Private $ has gotten very expensive though so getting it done quickly will be very beneficial for you

[Chris Davidson]

@Nash Mittelman I would look at a HELOC, a private money loan, maybe borrow a bit from a 401k, some on a card, and some on a LOC. Get a second once finished and pay off while retaining the 1st position.

Cheers!

[Carlos Ptriawan]

THere're several local CA CU and CA-focus lenders that could lend for ADU project. I can give exact name if you want. I just dont want to advertise it here in BP. No need for BP loan. DM me.

[Jhim Handrex]

Have you received quotes from contractor's yet? I built ADUs in the contra costa county and I can help with the construction of the ADU. You can save money on construction cost with us. Reach out if you would like to get more additional info.

[Denver McClure]

Hey @Nash Mittelman, I'd consider looking at a Margin Loan if you have an individual or joint taxable account. Rates are 6.33% on the higher end and you don't need any type of credit/income check to utilize the Margin loan. I've actually used a Margin loan myself for an ADU build here in Dallas.

[Chen Zhou]

Try Renofi and local credit unions. Typically their rates are better for primary homes adding ADUs and take after construction value and rents into account.

Certain Lending (hard money) is another option.