There was upside in improving the interior, adding a bathroom and separate entrance to the basement and repurposing the old barn into an ADU. Unknown to the buyers at the time they purchased in 2017, the property was zoned for ADUs.
The timeline from purchase to completion of improvements took 9 months.
- Investor couple – Realtor and General Contractor
- Long term Buy & Hold
- Focused on value add properties and short term rentals
- Listen to the podcast “#263: ADU Build Out in Unincorporated Adams County” on the Denver Real Estate Investing Podcast
- Watch the YouTube video (at the bottom.)
- Read the blog post. Note, the blog is an executive summary. Get the in-depth breakdown from the podcast or video.
Deal Quadrant: MLS
Read about the deal quadrant and finding Denver Investment Properties.
Investment Property Details
- Type: Single Family Home with Two Unit or ADU zoning
- 1bed + loft/1 bath with full kitchen also in the basement
- Location: Chaffee Park (Adams County)
- List Price: $450,000
- Purchase Price: $441,000
- Why we liked it:
- Two unit zoning
- Location near downtown
- Full kitchen in the basement
Property Contract Details
- Finding the Property: MLS. This property was still available after the weekend so they had an opportunity to put in an offer below list.
- Inspection items resulted in 5k seller concessions
Property Financing Details
- Loan Type: 3% down, Conventional, 4.75%
- Appraisal: At Value
- Seller Concessions: $5000
- PMI: Loan had option for no PMI
- Interest Rate Buy Down?: No
ADU Before and After Photos
Knowing everything they know now, the buyers would definitely choose to do this deal again. They stress the importance of finding the right property by looking in ADU friendly areas, at lot size, zoning requirements, and short term rental laws.
Good advice for buyers interested in ADUs is to make sure to consider start up costs including water tap and determine if the sewer line can handle the additional load. It’s also important to thoroughly inspect the foundation and ask the seller for drawings of the home.
It’s also a good idea to have your list of contacts to reach out to before buying the property. These include a General Contractor (GC), engineer, the city in which the property is located, and the water district representative.