ADU Finally Completed!

[Christian Torres]

Investment Info:

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

Purchase price: $250,000
Cash invested: $500,000

Single Family Home with detached ADU. Main unit is 4bd/2ba and 1500 sq ft. ADU is 3bd/2ba 1200 sq ft.

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

It was initially my primary home. Me and my wife decided to build an ADU on the property so we can increase the property value, and gain additional income passively.

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

I bought this home in 2010 through the MLS.

How did you finance this deal?

Purchased home using VA loan. Refinanced in 2020, and cashed out. Once we wanted to build the ADU, and we moved out, I acquired a construction loan. Once the ADU was completed, we refinanced into a DSCR loan.

How did you add value to the deal?

Built a detached ADU, painted both units to match.

What was the outcome?

After ADU was finished, it was rented out. Both units are currently being rented out, and I am self managing. Recently refinanced into a DSCR loan.

Lessons learned? Challenges?

Make sure to have all funding and budgets in place prior to commencing construction! Be aware of all the scenarios you could face, and prepare for delays of project completion.

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

Mortgage Heroes in Chula Vista were extremely helpful in brokering the loans to fund this project!