Notes on Accessory Dwelling Units

[Sarah Lorenz]

Would it be possible to originate notes on accessory dwelling units for homeowners who cannot qualify for a HELOC or refi to build one on their own? We would like to build these, and I'm sure there is a large untapped market of people who would want an ADU but cannot get the financing for it. The cost would probably run about $75,000 and the units would generate $900-1400 per month in income. Our area has very high rental demand, low vacancy rates, and high quality tenants. If the homeowner had a 2-4 years of income, they could then refinance or pull a HELOC and pay off the note. Does this sound like a viable strategy? If so, what might the rate be? There would obviously be a mortgage in first position.