ADU Build and Hold.

[Derek Sherrell]

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $384,000
Cash invested: $5,500

I teach average people how to find, read and understand their local zoning code as it pertains to ADU's (accessory dwelling units). Then I coach them to plan, finance, build and lease affordable ADU's.

BBRRR.
Buy, Build ADU's, rent, refi, repeat.
Derek, That ADU Guy.
https://thataduguy.com/

What made you interested in investing in this type of deal?

A duplex or triplex is to much cost and an old build. Build your own new, small multi fam with the ADU strategy.

How did you find this deal and how did you negotiate it?

MLS. Lot split.

How did you finance this deal?

Build house and hoth ADU's with a rock star HELOC from a small local credit union. Then 30 year cash out refi.

How did you add value to the deal?

Build an attached ADU and a stand alone detached ADU.

What was the outcome?

Instant equity, great cashflow, $5,500 out of pocket for a new triplex.

Lessons learned? Challenges?

Built start to finish in 5 months. Working dark to dark on days off is hard on your family.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

No.