It is usually difficult to take money against it from the bank, it might not be a 1:1 value add - meaning if you invest 100k into an adu it might not raise your value by 100kThat being said, it can be pretty lucrative especially in expensive and sunny CA - since building lots are no where to be found and existing real estate returns are very poor.My partner builds these units.

They were taxing as a fourplex, but the CO said it was a triplex.I found out when I went to try to refi with the bank.

All programs have LLPAs but that's more so any bank's individual guidelines and overlays to specific product pricing.

I do not have any loans through Flagstar Bank, but I would talk to them prior to moving it into the LLC.

If you find a seller willing to carry a note, you might be able to negotiate an arrangement that works without needing traditional bank financing.Another approach would be to partner with someone who has capital but lacks construction expertise.

Banks, Credit Unions, direct lenders, portfolio..pretty much the full mix of of lenders any of us would use.They all said the same thing.

I was looking for properties that were around 100k, that way I can buy it cash and refi with the bank with 20% down and keep the rest of my down payment as a safety net. 

The win for the investor is the "no red tape" that banks have to put you through. 

Rents will keep raising in most markets so bank on that for additional cash flow in the upcoming years.

The problem is, and here's where I really screwed up, is that now I'm told by lenders that because we have a commercial tenant banks won't refinance the property.