All Forum Posts by: Myles Blackwell

Thank you for these updates @David A.. Do you have a plan at all by chance to eventually split this ADU into an ADU and JADU by putting in a wall and building another kitchen? A lender I talked to today said suggested doing this (building a 1bed with a renovation loan and then adding a wall and kitchen afterward, and designing the ADU to make this switch convenient as possible). Could potentially get higher rents this way.

Thanks Lou. Great catch. I do wonder if we plan to live in the ADU after '25 they will count that as owner occupied.

Edit: looks like if we do commit to living in the proposed ADU we can build: https://www.reubenlaw.com/new-...

Hi all, I am curious what opinions folks may have about this ADU opportunity.

My partner and I recently bought a duplex in Vermont Square that we owner occupy. When we move out, it will cash flow $300-$400 a month after all expenses. We have 2 400sq ft single car detached garages in the backyard, and want to eventually convert at least 1 into an ADU.

We do not currently have the cash or equity to utilize to convert a garage.

What would you do? 

A) Use a renovation or construction loan to convert. If you would choose this option, what type of loan would you do? This lists lots of options (FHA 203k, Fannie Mae Homestyle Renovation, Shared Appreciation agreement, private money, construction loan, renovation loan etc.). What do you think of doing a renovation loan and then refinancing the home loan and the renovation loan into 1 loan?

B) Move out and buy homes in lower cost markets using low down payment loans. We work remotely so it fits our lifestyle. Do this until we have the equity to HELOC or cash out refinance to convert this Vermont Square garage (we have family here we could stay with to be around for the conversion).

What would you do? I am still learning about the factors regarding each option.

@Jonathan Taylor Can you please say more about your plan to move on from this property? With the NACA loan, what are the policies that you have to follow regarding moving out or selling? What do you plan on doing?

Thank you @Rick Albert! Very helpful details.

Hi @Rick Albert, do you mind sharing how much $ the ADU portion of the 203k loan was? I'm contemplating doing what you did, also in LA, but trying to weigh doing 203k or doing it cheaper via other financing. My dilemma is I love the idea of financing it via 203k loan, but I imagine it could be cheaper if I do it more on my own (but I don't yet have the $$).

What swayed you to finance it via 203k vs other methods? Would you do anything differently in terms of the ADU if you were to do it again? To make it cheaper? To make it better?