Updated about 1 month ago on .
Value add ADU for cash flow
Investment Info:
Single-family residence buy & hold investment.
Purchase price: $149,000
Cash invested: $57,000
Purchased 2/1 ready to rent with a 24/24 detached framed garage. Converting garage to a 520 sqft 1/1 ADU for rental. Initial appraisal before garage conversion $210,000. Finishing build out in next 30-45. Used fix and flip loan for lower down and half of renovation funded. Cash invested DP and half of reno
What made you interested in investing in this type of deal?
The 2/1 ready to rent at a good value with built in equity at purchase and location to city and more important the large framed garage enabling a lower cost ADU conversation to bring higher cash flow.
How did you find this deal and how did you negotiate it?
Found deal on MLS
How did you finance this deal?
fix and flip loan
How did you add value to the deal?
garage conversion to ADU
What was the outcome?
Rental incomes totaling $2,300, $111k debt plus $18k renovation debt with pre build appraisal at $210 offering $100k instant equity and after build est. $260-$270k. Over $1,000 true cash flow
Lessons learned? Challenges?
understanding dynamics of fix and flip loan conditions with different build categories altering funding percentages.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
JCreig Capital Funding with Joell Castro