SFR + ADU in Claremont, CA

[Sebastian Marroquin]

Total PITI : $2,800 p/m

ADU: Rents : $1900 p/m

Home : would rent for $3k per month 

Potential Gross cash flow: $2,100 per month 

Purchase: $500k 

Current ARV: $900k

Can these numbers be achieved today with high interest rates and high prices ? 

That's the question of the hour. 

Our neighborhood is selling homes without the ADU for $800k to $850k deepening on the condition.

Would you buy a home here for $800k for this strategy? 

There are many homes in areas outside of Claremont that are selling for $500k to $650k 

Many of the people we know are buying homes like this one with a construction loan for the ADU ($100k) and buying a home for $700k + $100k : $800k total at 5% down payment and ending with a total payment (PITI) of $6k minus $2k rents from ADU

Total new payment of $4k which is easier to make and once interest come down some, they will refinance to drop their payment to $3k to $3,500 per month. 

They add $100k to $150k of value to the property in year 1 and build equity at a 5% rate per year. 

What do you think? Is this a good idea in today's climate?