Boosting Cash Flow with ADU Potential in Morganton, NC

[Mitchell Coles]

Investment Info:

Single-family residence buy & hold investment in Truesdale.

This SFR residence is a prime buy-and-hold investment. Situated on a large lot in a thriving Morganton market, it features immediate rental income potential with cosmetic updates already completed. Plans are underway to add a high-demand ADU, increasing cash flow by $900/month. The property is part of a larger development vision, including future enhancements to maximize land use and value. With strong market trends, this investment promises long-term appreciation and growing income streams.

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

I was drawn to this deal because of the potential for rental income growth and value appreciation. Located in Morganton, NC—a market with rising demand—the property presented the perfect chance to add an ADU, maximizing cash flow and leveraging underutilized space. Morganton's affordable market and growth trends made it ideal for long-term investment, and developing the ADU allowed me to boost income while adding value to the community.

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

I discovered this deal through my network of local real estate contacts who informed me about properties with development potential in Morganton, NC. After visiting the property and assessing its suitability for an ADU, I negotiated directly with the owner, emphasizing my plan to enhance the property's value. By showcasing the mutual benefits of my offer, including a quick and seamless closing process, I was able to secure favorable terms that aligned with my investment goals.

How did you finance this deal?

I financed this deal through a private lender, allowing me flexibility and faster access to funds compared to traditional financing. Working with a private lender also enabled me to structure favorable terms that aligned with my investment timeline and cash flow goals. This approach streamlined the acquisition process.

How did you add value to the deal?

I added value to the deal by completing quick cosmetic repairs, allowing the property to be rented immediately and generate cash flow while preparing for ADU construction. I am also planning more extensive renovations to modernize the home, which will further enhance its appeal and value. Additionally, I have a broader vision for developing the land behind the property, which is currently in progress, creating additional opportunities for long-term rental income and growth.

What was the outcome?

The outcome so far has been positive. The property is generating rental income from tenants after initial cosmetic repairs, providing cash flow while I work on plans for the ADU and broader development. The project is still in progress, with more extensive renovations and land development planned to maximize the property's potential. The deal has already increased in value, and I'm on track to significantly boost rental income and long-term returns upon completion.

Lessons learned? Challenges?

The importance of leveraging local market knowledge and connections to find high-potential deals. Planning phased improvements—starting with quick repairs for immediate cash flow—helps fund larger projects like ADU development. Staying flexible and forward-thinking maximizes long-term value. Balancing tenant needs during phased renovations has also been a learning experience in maintaining cash flow while preparing for larger improvements.