Need advice! Hit a roadblock as a new investor.

[Sean Anderson]

So I was a bit naive with my first investment overspent. Bought a 815 sq ft 2/1 1950s in a great area back in 2017 (still primary home) with the idea of fixing it up. I went a bit overboard, but market helped and I’m sitting on about 120k plus in equity, but spent 70k on reno.

I refinanced during covid and took about 20k for my next project with hopes of building an ADU in the back.

I needed more capital so did a home equity agreement for another 25k and took out a personal loan/home renovation during covid 70k 20 yrs 7.5 percent.

I'm currently under construction and owner builder 400 sq ft loft style detached ADU which will be either an AirBNB or long term rental. 300 1st and 100 2nd. It was designed to resemble clock tower because I like doing different.

It’s costing about 125k to build  that includes upgraded septic system, paver drive, and covered deck patio. I’m estimating final appraisal at 450k + at 1220 sq ft or $368 a sq foot for both units.

Problem is I can access the equity without losing my 3 percent rate and can't HELOC because of the equity agreement in 2nd position.

I’m really creative and love building unique stuff. I’d like to get into another build of some sort (I’m not a GC) but with the current market and funds being tied up I’m stuck. I was thinking of renting both units and building a larger primary with a similar detached unit to offset the new mortgage as I’ve outgrown where I’m at. 

Any advice would be appreciated!