Investing in Properties with a Guest House or In-law-Suite

What's up everybody. So today we are going to talk about a topic that I think everyone knows now, if you've watched a lot of my videos, that's really near and dear to my heart. I know we've talked about the brrrr method and the blrrrr method and all these bigger pocket tactics and investor tactics. And you know, one of the biggest challenges of financing a multiunit property is the down payment, right?

Who wants to put 25% down on a duplex or triplex or a quadplex? We've talked about how to purchase a home that's multiunit with FHA, so that it's less money down. However, what about other properties that are being neglected out there? And I'm talking about the ADU accessory dwelling units. So what is the benefit of having an accessory dwelling unit?

Well, the accessory dwelling unit is actually treated as a single property, not a duplex or triplex. And the beauty about an accessory dwelling unit is that because of that, it's less money down. So when an appraiser goes out to the property, they have to identify the property as a single unit property for Fannie and Freddie, which has conventional as well as VA.

On the FHA, like I said, it really doesn't matter because it's still going to be three and a half percent down if you're purchasing a multiunit. You cannot use rental income on an FHA loan off of the accessory dwelling unit to qualify. However, you can on the conventional and the VA. And then finally, you know, with the appraisal requirements, it's got to be safety, sanitary, and structurally sound for both the accessory dwelling unit, as well as the primary property.

The other way of an accessory dwelling unit can be utilized is a manufactured home. And we see this from time to time and it's actually more often than not on accessory dwelling units. Where there's a manufacturer of home on the property, and once again, it comes down to the interpretation of the appraiser. Whether it's an income producing property, there are restrictions on like separate power meters and things like that that may make it a multi-family dwelling.

So when you're actually walking through these properties, make sure you're keeping an eye on the water, the gas, the electric. And once again, one of the biggest benefits of an accessory dwelling unit is that you can live in one unit and you can rent out an accessory dwelling unit.

I've actually seen it happen on multiple occasions where someone is living in the main house and they actually rent the accessory dwelling unit, especially with the rates increasing and the cost of rent increasing and less inventory. Those accessory dwelling units are covering the mortgage.

So, if you're interested in learning more about accessory dwelling units and how to utilize this, to start building your financial or real estate portfolio, or even to get started and then investing, please give me a call. And this is David Xie at the Xie Mortgage Team.

Have Mortgage Questions? We Can Help! Click Here

My phone number is (757) 478-8493. There's also a link below right here to apply. And then you can also click on this link down here, which is my Calendly link. Just schedule a time to speak to myself or my team. I look forward to helping you with your accessory dwelling unit. And I will talk to you guys later. Bye.