ADU Financing in Santa Cruz California [Accessory Dwelling Units]

I own a rental property in Santa Cruz and they are very liberal on their ADU policies. I want to build an ADU on the property and convert the garage into a junior ADU. Looking to finance this and I’m stuck. The numbers are below. I hope you can point me in the right direction!

Value: $1,125,000
Construction Budget: $365,000 (including cosmetic remodel of house)
ARV: $1,975,000
Owe: $840k with Wells Fargo (3.35%)
I hope to keep the 1st mortgage and get some sort of second but open to ideas as the property will generate significant cashflow once complete.

Thanks,
Omar

Timestamps
[00:59] ADU is very difficult to finance
[01:05] Specialty lenders who could do ADU that are private funding
[01:36] Do a new 1st mortgage and give you rehab money for the remodel of the property
[02:04] Looking at 75-80% of the total project cost to be funded
[02:10] How much is the gross loan amount for this kind of project?
[02:14] ADU is tricky but doable, depending on the locations
[02:30] The problem with modular-built ADUs
[03:00] Reasons why some people want the property as modular built ADU
[03:59] What are your options if you have other real estate holdings?
[04:10] “Unique projects take a bit of uniqueness to structure a deal”
[04:20] Ways to get these projects done
[04:58] Go to investorfinancingpodcast.com/ask to ask other questions
[05:20] You can buy properties without providing personal income documentation

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#ADU #adufinancing #accessorydwellingunit

About Beau: Beau Eckstein is a real estate entrepreneur, TV personality, and commercial mortgage advisor, specializing in construction financing and multi-family lending.

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