ADU Financing in New York

[Ryan Foote]

Hey BP,

Long time listener, first time poster.  

My first house hack is in motion! In contract on a SFH in the Hudson Valley, with two rooms in the main house that have their own entrances and are perfect for AirBnB. I also have plans to build a guest house (ADU) on the property. Originally, I had planned to live in the ADU, however the town is in the process of implementing new regulations around short term rentals. So the plan has changed slightly, in that we will be renting out the two rooms in the house on AirBnB when friends aren't visiting, and also want to construct an ADU and rent that out. No restrictions on either the extra bedrooms and the ADU short term rental. I'm going to be restricted to 40 days of renting the main house, which I'll plan to do during peak times.

My question is around financing the ADU. I've searched and since ADU's are less common in the area my house is, there does not seem to be a product out there that would be useful for financing the build, as there are in other markets where ADU's are more common. (Seattle, Portland, Austin)

Any recommendations for financing an ADU in New York state? It seems like a HELOC may be the least path of resistance, but I'm open other ideas. Appreciate you helping me hack!

Ryan