ADU Add on to our private residence

[Dawson Cabbage]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $550,000
Cash invested: $60,000

It is our second private residence. My wife and I remodeled the daylight basement into a 1 bedroom apartment that we rent to traveling nurses.

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

Wanted a new residence. My wife and I accidentally fell into real estate investing. We were able to cash out refinance our first home and rent it out, and then pay off some debt and roll the remainder into a down payment on our new home. We then took advantage of a 0% interest cash advance on our credit card (WAY out of character for us) to remodel our basement into an apartment. We will have it all paid off in 15 months.

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

Zillow negotiated through our agent.

How did you finance this deal?

Traditional finance

How did you add value to the deal?

Building an ADU in the basement.

What was the outcome?

In approximately 24 months we will be cash flowing 100%. We are receiving $1600/month rent for short term leases on a fully furnished, all utilities included apartment. The value add to the house was around 70K on a 35k investment.

Lessons learned? Challenges?

Over the course of my life I have been very risk averse, and with two relatively small successes, I've learned to be comfortable with calculated risk. I've read book after book and listened to hours of pod casts on the subject, in order to get me to the point of taking the first leap. I would recommend read, listen and then take the jump.

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

James Peterson Real Estate Broker with Living Room Realty
Ryan Stoker with Summit Mortgage is my Mortgage Broker.
Both are knowledgeable, experienced and very patient.