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ADU Financing for renting
Has anyone in the Tucson area secured financing for an ADU rental on their primary residence? We have the land and meet the code requirements dictated by Pima county. I am looking for information regarding financing the construction on an ADU. I am open to getting a manufactured home and dropping it if necessary. I have an FHA on my residence. Haven't refinanced or pulled a HELOC. Not sure if there are other long term finance options (30 years preferably). Budget is $80k-100k for a 2br/1ba.
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I think, generally speaking, this is one of the bigger reasons NOT to build an ADU in your backyard simply because you have the space: there aren't really any simple ways to finance the building costs.
Maybe some specialty programs exist for prefab homes or a custom ADU builder might have his own lender partner they could refer you to... but unless you yourself are an experienced home builder with a track record in ground-up construction, you're basically looking at a hard money or a HELOC. You also probably will not get a $1 in cost <= $1 in value from the ADU after construction, if you tried to do a cash-our refi or something. AND you cannot separately sell or refinance that ADU in the future.
That said, I ran across this company that seems to specialize in this type of addition: maybe they could help? https://www.prismadu.com/
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Have you looked into shipping containers?
Personally, I think it's an incredibly interesting idea. The concept is to convert one or more shipping containers (the containers transported on the decks of those massive cargo ships) into a home. There are tons of examples of these container homes online plus info about the conversion process. Some contractors even specialize in converting containers into houses.
Wow I sound like a container shill. I've not built one before, I just think it's a cool idea. Check it out, maybe it could work for your property.
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Quote from @Patrick Allen:That was very helpful. Thanks! I may go with a private/portfolio lender. I do have plenty of family who are willing to let me owe them money
I think, generally speaking, this is one of the bigger reasons NOT to build an ADU in your backyard simply because you have the space: there aren't really any simple ways to finance the building costs.
Maybe some specialty programs exist for prefab homes or a custom ADU builder might have his own lender partner they could refer you to... but unless you yourself are an experienced home builder with a track record in ground-up construction, you're basically looking at a hard money or a HELOC. You also probably will not get a $1 in cost <= $1 in value from the ADU after construction, if you tried to do a cash-our refi or something. AND you cannot separately sell or refinance that ADU in the future.
That said, I ran across this company that seems to specialize in this type of addition: maybe they could help? https://www.prismadu.com/