This gets complicated and is not a DIY project.And, depending on the specifics, various other limitations can come into play.

It all depends on whether or not the numbers work out.

Depending on the financing in place on the main residence, you may be able to “sell” the parcel with desired ADU to an LLC and then “buy” it back from that LLC using the 1031, but it would no longer be an ADU unless always sold together.

I've included an example below to help illustrate this.So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.See example below:DSCR < 1Principal + Interest = $1,700Taxes = $350, Insurance = $100, Association Dues = $50Total PITIA = $2200Rent = $2000DSCR = Rent/PITIA = 2000/2200 = 0.91Since the DSCR is 0.91, we know the expenses are greater than the income of the property.DSCR >1Principal + Interest = $1,500Taxes = $250, Insurance = $100, Association Dues = $25Total PITIA = $1875 Rent = $2300DSCR = Rent/PITIA = 2300/1875 = 1.23DSCR lenders generally let you vest either individually or as an LLC.

It really depends on perspective.

But it also depends on the market.

Mostly Southwest uses Love Field, the smaller older airport....so don't go there looking to fly to Sydney.Dallas has to be Real Estate Meetup Central....seems like 3-4 a week depending on your focus.Two I really like are on Thursday nights in Dallas NTAREI and Saturday mornings in Fort Worth DFW Real Estate Investor Club. 

Hi Anietra,It would depend on what you are looking for.

Markets vary but Atlanta and NE Georgia vacancy rates are very low.

(Lender options vary by state).