Some of these loans are attainable the same way a traditional mortgage is obtained and can require a little less in downpayment.  

This would have been a commercial loan - I used the term "conventional" when I should have said "traditional", meaning that I was assuming the standard loan terms for this type of property.

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My family was poor with poor spending habits with the traditional consumer mindset.

After the ADU was built I was able to refi and pull out 80% with a traditional loan and another 10% with a HELOC , and was able to pull out everything except the original down payment (60K) but it was well worth it because of the tremendous cash flow I have on the property.The main house rents for $3700/Month the ADU sections are renting at $1,800 per unit  including utilities(there are 3) so the property is grossing $9,100. total utilities, water , gas & gardener expenses are $400  per month (I have Solar on the property , so no electrical bill).

Traditional financing How did you add value to the deal?

Doo you want a traditional roommate or more of a short term arrangement. 

This type of project here is referred to as a JADU (Junior Accessory Dwelling Unit), since it is attached to the primary residence it is classified as a JADU as opposed to a traditional ADU (Accessory Dwelling Unit). 

Having some private money at 8-12% annually that can be accessed quickly may be more advantageous than working on a deal with traditional financing with a bank/credit union when they want to due a pre-renovation valuation/appraisal and post-renovation valuation/appraisal and then go ahead and set up a draw schedule to align the funding with the project timeline and any inspections of the property... 

Which is fine.Then, when they’re on one side of a traditional sale and they want to justify either their clients offer or the list price in this small, historic part of town, they post the off market deals retroactively with the listing description as “comp only” to MLS and all the websites (Zillow, Redfin, etc).I know this because I was a buyer represented by the son on a house that eventually fell through post inspection.