Financing an ADU for STR

[Isaiah Jernigan]

Hello BP. So I recently purchased my first house hack in Durham, NC about two months ago. My original plan was to put 3.5% down and use the rest to build an ADU in the back yard (and use it as a STR for cash flow) and refinance after a couple months. But I couldn't qualify for the FHA Loan so I had to put 10% which ate up most of my cash. Im in the process of building my reserves back up but I was wondering if there were any Hard Money Lenders that would lend 15-20k for a new construction ADU. I would preferably like to work with someone local, so If you have any good recommendations or other creative financing solutions I would appreciate the feedback.

[Kenneth Jackson]

Isaiah, 

Good to see another Bull City resident on here and the plan you bought looks cool. I am not particularly well versed in the permitting process (I've done some, but usually my contractors handle it for me), but a cheap way you could find out if you can do it is to take the plans to the city and see if they'll grant you a build permit before you take out a loan or starrt buying materials. 

Personal loans are always great for projects like this, especially if you think you can build it for under 25k and get it occupied. Just make sure the city will let you host in it first! I have a hard money contact as well that can lend on building if you start to eclipse that 20-25k number.