All Forum Posts by: Jillian B.

I certainly dont want to dissuade you from building an ADU since it will generate income and likely add quite a bit of value to your home, but consider the opportunity cost. You could look at investing in a lower COLA and build a portfolio of homes with that same $275k.

I recently bought a 4 plex in NC for 189k that brings in $2600/month....

BTW I found a turnkey 3 bed 2 bath in OKC with a two story structure in the back which I think could be converted into an ADU. I am looking into it but it seems weird the seller says "Behind the home, there is a two story out building that has potential to be converted into two separate living spaces. Current back building is not suitable for living and we are currently suggesting that anyone entering or inspecting it proceed with caution as no work has been done to make this building ready for entry. Existence/Repairs/Removal of back building are negotiable." So I don't know if the city has some restrictions on ADUs or if the flipper ran out of money, hard to tell.

I certainly dont want to dissuade you from building an ADU since it will generate income and likely add quite a bit of value to your home, but consider the opportunity cost. You could look at investing in a lower COLA and build a portfolio of homes with that same $275k.

I recently bought a 4 plex in NC for 189k that brings in $2600/month....

Thanks Justin. I put this info out there for feedback. That's what I'm getting. 

There is plenty of information that falls in to the "I know that I don't know" and then there is the "I don't know that I don't know" category. No dissuasion here. Your points are exactly why I keep vacillating between Denver and OKC. I figure I can find a deal in OKC that can generate income for less investment and it is just a matter of time to realize either of these ideas. I appreciate the added touch of your recent purchase info. I can do this. Set the goal and go! 

@Justin Tahilramani is correct. Your costs are too high -over $450 per square foot (based on a 650' ADU) with no expenses for land? Get the costs down to $150,000. You'll have enough available, you'll get it done and you'll turn a profit.

Use an already completed and engineered design that is close to what you want and can be purchased for a few hundred $. Set up a cheap website and get all your drawings on the website, then use Craigslist adds posted in out of state major cities with depressed economies. Your add should seek a builder, with tools, who can build your chosen design, within 6 months. Provide a link to your website so the design can be reviewed from anywhere, offer $2000 per week in cash with $1500 paid weekly and the rest paid in lump sum only upon completion. Also offer strong incentives for early completion (incentive like paying six months labor even if your builder completes it in 5 months). You'll have plenty of people interested, but choose wisely, many will be more interested in being paid, than in completing the ADU.

You could sweeten the deal by offering to let the out of state builder stay in a spare a room in your home. Also use less expensive materials if you are still over budget. Choose fixtures, finishes and appliances that can be upgraded later when the finances are stable. Under this arrangement you get an ADU very close to what you want, limit your labor costs to $50,000 and your materials to $100,000. You already have enough to get it built. You do have to manage the project and the builder, and you just do the permitting yourself.

Mind blown! I wondered how one might do this for less. This idea makes so much sense. My alley neighbor built an ADU by himself-2 car garage and 450 sqft living space and he gave me his drawings so I can go back to that architect to make some changes and get pretty close to what I want. Permitting seems daunting especially for ADUs in Denver, seems the rules change from time to time and that can be a setback. Thanks.

I would relook the price to build the ADU. Do you need a three car garage? Can you make a larger ADU if you make a smaller garage?

It is less about need and more about if I am going to do it, then just DO IT sort of mentality. Plus it maximizes the ADU space. In Denver one can only build an ADU that is 75% of the bottom floor, so this would maximize the rentable space.

What is your projected rental income on the ADU after expenses? $275K is insanely expensive to build an ADU.