All Forum Posts by: Devin Dang

Hi, I'm a residential builder in East Austin as well as currently going through ADU permit process for my tiny house that'll be on the backyard of my primary so I can answer some of these.

1. Other than lot sizes > 5750sqft and at least SF-3, watch out for set back (distance between your ADU and main house needs to be at least 10 feet as well as from the sides), tree requirements (if there are trees that are 19" diameter 4.5 ft from ground as well as if it's a heritage tree, you cannot take them down and even trimming can be pain as city of austin arborists might flag you and they are expensive)

2. My properties are all located within 1/4 miles from a transit stop, in which case you don't need to provide additional parking space. To see if your property would require in your neighborhood: https://www.arcgis.com/apps/we...

3. There are ADU companies that have existing relationships with mortgage companies. Good news is that compared to few years ago, ADU/tiny houses are now way easier to get financing, making it a great time to invest in ADU especially if you're going to turn it into a STR (with only type II permit as an owner occupied). If they don't know, I've used 21st century mortgage which services tiny home/ADU.

4. ADU can be either 1100 sqft or 15% of the lot size, whichever is smaller. Also both house and ADU combined cannot be over 40% FAR ratio (so if you're looking from aerial view, both structures combined cannot be over 40% of the entire lot size). Also, if your property is in a flood zone or historical site, permit can experience delay, as well as make sure to check deed restrictions and HOA regulations. Sometimes it's not so easy to find out restrictions on ADUs.

Also getting insurance quote can be trickier with ADU especially if you're going to run as a STR. For ADU permit applications, you'll need architectural plans, elevations, as well as Texas certified structural engineer's seal of approval. Hope these help.

Hi Chloe! Thanks for the detailed response, this is SUPER helpful and much appreciated.

Sending you a PM for a few quick follow up questions.

0 Votes

Austin, Texas

Hey BP Fam,

Has anyone been through the process of building out a detached ADU backyard of a single-family home in Austin? Know someone looking to purchase a home with the intention build one to turn into a rental while they occupy the main house, luxury house-hacking!

I read through the criteria on austintexas.gov site - https://www.austintexas.gov/pa... but would love to hear from someone that has done it/very familiar with the process:

1. What are the requirements one should look for to evaluate if a detached ADU is possible besides lot size and SF3 zoning requirement?

2. What are most common ways you provide the additional parking space since the driveway requirement is now removed? Is extra space on the street fine

3. Do ADU companies allow you to finance it out or typically all up-front?

4. Any other common problems/issues people usually run into that they wish they knew?

Thanks in advance!

4 Votes

Austin, Texas

@Jordan Moorhead Thanks Jordan! Definitely a scary situation but happy with the turn out, appreciate your help and expertise on this one.

1 Vote

Austin, Texas

@Taylor Dasch Thanks Taylor for the kind words!

0 Votes

Austin, Texas

@Andrew Syrios Thanks Andrew!

0 Votes

@Matt Stricklen I can't take all the credit with the crazy natural Austin appreciation at the time but hey, not complaining at all. Thanks Matt!

0 Votes

Austin, Texas

@Jeff Schemmel Thanks Jeff! Definitely happy to have locked this one down.

Facebook groups has been my main and only place to source tenants/social media within my friend groups.

I had lots of demand (50+ responses) so I was able to take my time and find awesome tenants with similar interests and no conflicts. We all hang out and have a great relationship.

Full cosmetic: LVP flooring throughout, interior/exterior paint, kitchen/bathroom cabinet paint, lighting fixtures, and a few smaller projects.

1 Vote

Austin, Texas

@Dmitriy Fomichenko thank you sir!

0 Votes

Hey Nicolas!

I'm also house hacking a SFH here in Northeast Austin and I'm able to get $700 for my smaller 10x10 rooms and $900 for my master, base rent before utility payment. Could probably get a little more if I really wanted to squeeze it. With increasing prices, 400k is difficult to cash flow but will still significantly reduce your housing expense.

If cash flow is extremely important, couple levers you could pull:

(1) Rent out the master to close the gap

(2) Consider 5 bed and you'll cash flow at that price range. If no 5 beds are available, can get creative with an extra office room, adu, converted garage

(3) Rent by the room off airbnb for monthly room rentals for more cash flow

1 Vote

Austin, Texas

Hey BP fam, wanted to share my first SFH House Hack in Northeast Austin. Making it a goal this year to meet as many awesome local current/aspiring house hackers, investors, and agents in the area so lets connect!

Purchase price: $267,500, closed 2/22/21
Cash invested: $50,000 (30k down payment, 20k cosmetic rehab)
Current estimated market value: 400k-420k

A 3 bed/2 bath + office that I'm living in the front office and renting out to other three to completely cover PITI + extra $478/cashflow monthly. When I move out to my 2nd house hack, this will easily cash flow $1000+/month. Was a crazy time but bought right off the MLS during a record low inventory levels, sitting close 0.2 months of inventory by the time I closed. Unfortunately had to come in extra 20k down payment due to unprecedented appreciation causing low appraisal. But the appreciation alone since has made it worth it!

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Agent team: The Jordan Moorhead Team in Austin Texas
Lender: @Tyler Hodgson with NXT Mortgage