[Seattle DADU] COMPLETE! 1st One Done! +$400k Equity

[Eric Yu]

Investment Info:

Single-family residence other investment.

Cash invested: $389,000

Hi y'all! First successful DADU. Bought the main house back in November 2022. Rehabbed that & then built our DADU in the backyard. Total timeline was from May 2023 until November 2023 for construction. All said, this was our most successful real estate investment/project to date.

2nd one coming up soon :)

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

Opportunity to create massive amounts of equity.

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

Found it on the MLS & had to go $50k over list to get it.

How did you finance this deal?

Hard money to buy the main house, then HELOC to fund construction of DADU. In the end, paid off the HELOC with cash to own it free and clear.

How did you add value to the deal?

Rehab + construction.

What was the outcome?

FINAL NUMBERS:
- Projected Costs: $380k ($357k in build cost & $23k in soft costs)
- Actual Costs: $389k ($369k in build cost $20k in soft costs)

Note: We had very minimal carrying costs because we utilized a CA HELOC with Premier Valley Bank that had a 2.99% introductory interest rate.

- Projected Finished Value: $750k
- Actual Finish Value: I think between $800-$850k, not sure yet. Waiting to get a HELOC on this once I can!

Lessons learned? Challenges?

Lots of moving parts / learning to work with the city with new construction. Having gone through the process once, it's very clear how to keep growing for the next one :)

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

I worked with myself heh. @helloericyu.