08/26/2026
Let's break down math in the simplest way we can.
Here's an example based on a real scenario we walk homeowners through.
๐ฏ The homeowner: Home worth $600,000. Outstanding mortgage of $200,000. Good credit.
๐ฏ The financing: They obtain a $90,000 home equity line of credit at 4.43% APR on a 30-year loan structure. Monthly payment: $452.
๐ฏ The ADU: We build them a Hillcrest garage conversion. A full kitchen, queen bedroom, private entrance, curbless shower, and mini-split HVAC.
๐ฏ The tenant: Moves in. Pays $1,500/month in rent.
๐ฏ The math: $1,500 rent minus $452 loan payment = $1,048 in the homeowner's pocket. Every month.
Over one year: $12,576.
Over 20 years: $251,520.
๐ผ๐ฃ๐ ๐๐๐ง๐'๐จ ๐ฉ๐๐ ๐ฅ๐๐ง๐ฉ ๐ฉ๐๐๐ฉ ๐ง๐๐๐ก๐ก๐ฎ ๐ก๐๐ฃ๐๐จ ๐๐ค๐ง ๐ข๐ค๐จ๐ฉ ๐ฅ๐๐ค๐ฅ๐ก๐:
- The tenant doesn't just pay back the $90,000 cost of the ADU. They pay it back AND generate $251,520 in income on top of that, over the life of the loan.
The homeowner didn't use their savings.
They used equity they already had.
The tenant did the rest.
Every situation is different. Your equity position, your credit, the interest rate when you borrow, and what your local market rents for will all affect your specific numbers. This is an example to illustrate the concept, not a guarantee of outcome.
Many OC homeowners think they don't have the capital to build. They do. It's already in their home. We've built relationships with lenders who specialize in ADU financing. When you're ready to explore what YOUR numbers could look like, that conversation starts for free.
๐ 949-216-0686
