Quote from @Chris Seveney: Quote from @Devin James: In 2021, we saw buyers upgrading to larger homes, taking advantage of 3% interest rates to afford an extra 300+ square feet.Today, smaller homes are selling much faster as higher rates make additional square footage less affordable.While rates are historically average, I don’t see them dropping significantly.

We wanted additional units to pay mortgage and have cash flow.

In addition to other tax strategies like a cost segregation study on the fully rented out house.

In addition to being my mentor, Chris had been asked to take the class on a “funding tour”.

To give you an idea of how we approach it, we assume the worst-case scenario right from the start is 9-12 months of no rent, $5,000 in legal fees, and an additional $5,000 in expenses to deal with moving their stuff, putting it in storage, and dealing with health code violations or NOV's from the city during the process. 

.- Value add - How much does it cost to build additional storage units?

Here is a list of what adding ADUs in my CA market is typically a poor RE investment:1) The value added by the ADU addition is often significantly less than the cost of adding the ADU.

Another option would be working with private lenders to see if they're open to your idea should you need additional funding. 

In addition, suncoast will charge you a 1 month rent just to get the property filled, so you are already starting off massively underwater.

Pay attention to the duration.DM me if you want additional thoughts.Jeff