However, I do think that one of the biggest mistakes when building an ADU is to overspend on an ADU.

One year from today lol my mistake**.

Worst case scenario I'm looking at 40% vacancy rate and $550/night which is a bit below average and that gives me a Cash on Cash return of 7.7% according to my calculations and a 5 year IRR of around 20% plus a wonderful house to occasionally use for family vacations. 

Our worst one I'd estimate cost me about $3,000, on top  of double security deposit-- wanna get money from a person without a job? 

Originally posted by @Stetson Miller:@Ryan Genson It may have been a mistake, but secondary home loans highly limit the amount of time the property can be used as a rental, and it would be mortgage fraud to operate as a full time rental.

This was a very nerve-wracking time being that the market was very unsure of the future and rates went up and down like a boat at sea in a storm (my loan office jokes with me to write "Bought a home when Covid hit" on my resumé).Jokes aside, my wife and I were scared that we were buying a home at the worst time since no one seemed to be in the market to purchase a home.

It is my mistake that I have been taking this loss every year.

I get the worst leads from Zillow. 

The saying is there is no mistakes, just learning experience.

Worst case is there is damage that eats up the deposit but as long as he is gone focus forward on getting it turned over and rented out.