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Updated about 3 years ago on . Most recent reply

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Jill Rene Petik
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When to add in payments used to acquire a property

Jill Rene Petik
Posted

Hi there, I'm trying to (properly) calculate the yield for a potential ADU build that would allow me to house hack my second primary residence. I purchased a new primary residence 4 months ago. I'm looking at a construction to perm 10/6 ARM refi, so I can build an ADU. This will greatly increase my revenue and allow me to House Hack. My questions are is these:

1) If I borrowed the funds to close on the new Refi loan (from my HELOC from property #1), do I include those payments as an expense when calculating the yield?

2) Should I include the original cost to acquire the property (the new primary loan taken out 4 months ago) when calculating the yield?

Thanks so much

Jill

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