AUD vs. SFH or MFH - How to calculate the best option?

[Christine Smith]

Hello, 

So we're looking at our second investment "door." We're considering both an AUD (in CA on our primary residence) or an out of the area condo or duplex/triplex. We'd be looking to use a HELOC either for the ADU or for the 20% down on an out of area rental.

Assuming 500 sqft 1BR standalone ADU would typically cost around $160K. For the areas we're researching, $200-400 cash flow is the target.

What calculations would we need to run to see what would be the best route for us?

Thank you!

Peace,

C

[Dennis Maynard]

There isn't a right way. You just put together the budget, cashflow analysis, and return analysis for each and compare. I would verify you can get a HELOC right now. Lenders have gotten super tight in the last 30 days.