Building an ADU or buy a triplex

[Jeffrey Zhang]

Hi, I'm facing two options: build an ADU or buy a triplex.

ADU of 1200sqft, 3bed 2bath

cost: $250k~$300k

appreciation: not sure. the value of existing SFR is $550k, 1100sqft.

collecting rent: $3000/month

Triplex:

purchasing price: $900k

PITI with 25% down: $6k/month

collecting rent: $7400/month

If building the ADU, most likely I can cash out all the investment, finish the circle of BRRRR.

Also like the rental income of Triplex.

Which one will you choose? Thanks in advance.

[Sean Walton]

@Jeffrey Zhang is this in Los Angeles City? I don't know the area that well but less than $300/SF construction cost seems on the low side unless you are very experienced in managing contractors and cost. Is it a personal residence you plan to live in? If you can BRRRR it I would go the ADU route since you then get all your original investment back and find another triplex or property you can have enough value to, in order to BRRRR that