Hi all! I am new to the real estate investment game and am trying to find a way to house hack to start bringing in real estate cash flow. I live with my partner in a very small single family house in Portland, OR (2 bed/1 ba, 800 sq ft) that sits on a fairly large lot. We are thinking about constructing an ADU in the backyard (ADU <500 sq ft), and living in the ADU so we can rent out the house. I'm thinking we could rent the house for ~$1700/mo. Detached ADU construction costs in Portland seem to average around $150k, but I'm hoping to find ways to do it cheaper (maybe ~$120k).
I still need to run numbers on the specific expenses to confirm there would be positive cash flow, but am currently just feeling out the concept. Has anyone done a similar project or have any advice/input to share? One specific question I have is around financing- anyone have creative finance strategies for construction loans, or will I need 20% down?
I would appreciate any input on my proposed strategy. Thank you!
