Investor · CA · Member since 2020 · 126 posts · 32 votes
What's Up BP! Me and my mother were looking for a duplex to house hack, we got approved for up to 500k but my question is I know with slim inventory and more of a selection on Single family homes I wanted to know if we are able to purchase with a standard FHA loan on a Single Family with a good size lot and and say couple months down the road turn around get a Renovation loan on the ARV with an ADU on the property to rent out due to the New laws for ADU have taken place I figured this will be another avenue to explore than just a duplex to house hack? Has anyone heard of this? Thank you all in advance!
Real Estate Agent · Portland, OR · Member since 2016 · 1k+ posts · 605 votes
5y
Hey @Jonathon Nila, that could be a solid plan but I want to try and poke some holes in it. Usually, ADUs don't have a 1:1 return based on the investment (ROI) so I don't think you can count on getting all your money back.
Another thing you can look into is a company like Dweller. I'm not sure if they are in your area but they will put a pre-fab ADU in the back of your yard for you. They have different payment options as well. Something to look into but props for getting creative.
What's Up BP! Me and my mother were looking for a duplex to house hack, we got approved for up to 500k but my question is I know with slim inventory and more of a selection on Single family homes I wanted to know if we are able to purchase with a standard FHA loan on a Single Family with a good size lot and and say couple months down the road turn around get a Renovation loan on the ARV with an ADU on the property to rent out due to the New laws for ADU have taken place I figured this will be another avenue to explore than just a duplex to house hack? Has anyone heard of this? Thank you all in advance!
In most areas ADUs appraise far below the hand off ADU addition costs. You typically would be better off purchasing a property with an ADU than building an ADU.
Financing for ADU properties do not use the rent from a unit for qualifying, but rent from a duplex can help with the financing.