Estimated CostsADU costs can range DRAMATICALLY depending on the state of the lot, custom vs fast track plans, size of ADU, materials and finishes, speed and quality of the builder, etc.

Quote from @Phillip Austin: There are two alternatives to a security deposit, which I speak about in my book.

If you're looking to househack again, then the conventional 5% down is a very viable alternative to the 3.5% down FHA option. 

Good call, Noel—licensing and insurance are critical, but in Tennessee, a contractor’s license is generally required for projects totaling $25,000 or more, including labor and materials (See Tennessee's licensing requirements).

He seemed legitimate at first, and I even had a few friends look over the materials he provided.

Alternatively, you could split it between House 2 and 3 in a way that covers your building budget for the apartment.

If the rental income doesn’t sufficiently cover the debt payments by their standards, they’ll limit the loan amount, even if the property is worth more.You could try a few alternatives:•Look for lenders who specialize in commercial real estate and have more flexible DSCR requirements.

Alternatively, your sibling might use a 1031 exchange to defer taxes by reinvesting in like-kind properties, though this doesn't directly fund a primary residence.Other ideas include leveraging a HELOC on the rental properties for the down payment, taking out a 401(k) loan, structuring an owner-financed agreement, or a lease-to-own arrangement.

Unfortunately, some renters will say anything—even things that make no sense in an alternate universe—to avoid responsibility or financial consequences.

I'm generally a proponent for alternative lenders if they can provide better leverage or if they are needed due to time constraints.