Accessory Dwelling Unit (ADU) House Hacking Masterclass

Accessory Dwelling Unit (ADU) House Hacking Masterclass

In this episode, Derek Sherrell, who has a background in construction and real estate investing, shares his experience with building Accessory Dwelling Units (ADUs) and using them as a way to generate passive income. He provides an overview of ADUs, including their different types and the importance of researching local planning and zoning codes.

Derek emphasizes the benefits of house hacking, which involves building an income stream on a property, such as by renting out a garage or building an ADU. He shares tips for financing ADUs, including seeking out local banks and credit unions, and emphasizes the importance of doing due diligence on contractors before hiring them.

Finally, Derek encourages viewers to be creative and open-minded in their real estate investing endeavors and to seek out networking events to build relationships with other investors.

Are you a real estate investor or business owner looking to expand? Book a discovery call with Beau to learn all the ways he can help you - https://investorfinancingpodcast.com/rumble

Timestamps
[00:25] Going to live and physical networking events is the most powerful thing in the real estate investing world
[00:42] Our special guest, Derek Sherrell shared his construction background, his back story as a general contractor, and how he built his first ADU.
[01:29] Have the most amount of cash flow with the least amount of units
[01:57] Follow Derek on Instagram and on YouTube @thataduguy
[03:08] Slow, simple, sure path to wealth – one at a time
[03:54] House Hack into the buy and hold strategy
[06:09] What is an ADU?
[07:27] How ADUs Build Wealth – Market-Rate Rentals
[07:54] Short-Term Rentals
[08:35] California has the best ADU legislation in the US
[09:04] Major Project Stages of ADU: Planning, Designing, Funding, Building
[09:26] The cheapest, easiest, and most efficient way to build or convert an ADU
[10:35] Major Project Stages of ADU: Planning
[11:01] Zoning: Become an expert in your local zoning code
[13:17] A lot of planning departments have pre-approved plans
[13:42] Owner-Occupancy Requirement
[14:06] Five different types of ADU to create
[14:29] Attached ADUs
[15:25] Detached ADUs
[15:49] Garage Conversions
[16:25] Above Garage ADUs
[17:38] Internal “Carve-Out” ADUs
[18:32] If you are going to do a conversion, it’s important to pay attention to sound and vibration transfer
[18:57] How to sound proof your rooms in your house
[19:17] Basement Conversions
[20:14] Infrastructure Costs
[22:00] Potential Shared Assets / Potential Separate Assets
[23:27] Major Project Stages of ADU: Designing
[23:38] Three ways to save money on your ADU - Cost Drivers
[24:24] Design principles of ADU
[24:31] How to maximize space
[25:42] Storage is important because there’s not a lot of it in a small space
[27:10] Major Project Stages of ADU: Funding
[27:15] Different options for funding your ADU
[30:10] Do not over design and over build your ADU
[30:36] Costs and Project Management
[30:40] The best way to finance an ADU is at purchase!
[31:24] Cash Savings or Other Liquid Assets, Family and Friends’ Loans
[31:34] Home Equity Lines of Credit
[32:05] Renovation Loans & Construction Loans
[32:29] Credit Cards
[32:43] Major Project Stages of ADU: Building
[32:50] General Contracting vs DIY
[33:56] Permitting Process
[34:24] Start building relationships with the decision-makers
[34:41] Site Access/ Conditional Use: Make sure to design to your area
[35:23] Electric – Upgrade your power
[35:42] Gas & Water
[35:52] Holding: Build Property Management into your builds and conversions
[37:06] Where to go to find out more about Derek
[37:33] Looking at properties in a whole different light
[38:34] Pros and cons of pre-manufactured versus built in place
[43:15] Always call and ask your local building official
[44:27] Doing ADUs in Oregon and with some contractors in California
[44:55] Go to realmhome.com/ to save $100 and find the highest-rated and most affordable builders for your project
[46:24] Go to a lumber yard closest to the building site
[50:48] California has the friendliest infill housing right now
[51:10] What is the greatest and best use of the property?
[54:58] People pay for three things: location, privacy, and amenities
[58:50] Know who to call to get the answers you need
[01:00:21] Look for any pre-approved ADU plans that your city might have
[01:08:44] The worst deal that Derek has ever bought
[01:09:27] Become an expert in your local zoning code
[01:14:13] How are appraisers valuing ADUs now?
[01:16:21] The hardest part of the ADU
[01:16:57] What’s the process to figure out if you are not a builder or a plumber?
[01:20:04] Go to Derek’s YouTube channel www.youtube.com/@ThatADUGuy
[01:22:21] Be ready to take action
[01:23:48] Reasons why most people use composting toilets
[01:30:48] A good reason to focus on infrastructure

💥 Thanks for watching 💥
#adu #accessorydwellingunit #househacking