ADU Feasibility Analyzer

The interest-only draw period almost always looks affordable. This checks the number that actually decides it — the fully-amortizing repayment payment — against realistic rent, after vacancy, upkeep and the property-tax bump a California ADU triggers.

What kind of ADU?

Pick a starting point — it presets typical build costs and rent (all editable).

Detached new build A standalone unit in the yard. Garage / JADU conversion Convert existing space — lower cost. Attached addition Built onto the existing home. Custom Keep your own numbers.

Your numbers

Your home & first mortgage

Home value (as-is)

First-mortgage balance

Current first-mortgage rate (%)

Kept in place — the point is not to disturb a low first rate.

Target CLTV 80%

Most lenders cap combined loan-to-value at 80–90%.

The ADU build

Expected build cost

Low estimate (optional)

High estimate (optional)

Estimated as-completed home value

Used only if your equity today falls short of the build (the "reach" line).

HELOC terms

Prime rate (%)

Your margin (%)

HELOC rate: 7.75% (prime + margin, variable).

Draw period (years)

Repayment period (years)

Rental economics

Expected ADU rent / mo

Vacancy (%)

Operating / upkeep (%)

Property tax on build (%/yr)

CA partial reassessment of the new construction.

Added insurance ($/yr)

Annual rent growth (%)

A projection, not a promise — the #1 way pro-formas mislead. 0% is a valid, conservative setting; year-1 cash flow stays the headline.

Snowball Rent Method (optional)

During the interest-only draw, redirect your honest rental surplus — NOI after vacancy, upkeep, tax and insurance, minus the interest-only payment (never gross rent) — to HELOC principal, plus any contribution of your own. It re-amortizes the repayment payment down. It stalls when there's no honest surplus (including under rate stress) — never assumed.

% of rental surplus to redirect 100%

Your own contribution / mo (optional)

Extra you'll add toward principal during the draw — your stated figure, on top of the surplus.

Compare a refinance (optional)

New first-mortgage rate if you refinance (%)

Drives the protection line: if your current rate is lower, refinancing reprices the whole balance.

Does it pencil?

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Worst case — no paydown

—

repayment-phase net cash flow on the full balance

With disciplined draw-period paydown

—

net monthly cash flow once the interest-only draw ends — the number that decides it

True cost to own

—

net out-of-pocket after rent

Equity the ADU adds

—

as-completed value over your as-is value

Principal paid down / mo

—

month one — wealth retained, not spent

Rent-growth break-even

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when growing rent covers the payment

Borrowable at your CLTV vs. build

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Draw payment (interest-only)

—

the cheap, temporary phase

Repayment payment

—

fully amortizing

Payment shock

—

the jump when the draw period ends

Draw-phase cash flow

—

after vacancy, upkeep, tax, insurance

Break-even rent

—

to net zero in repayment

The Snowball Rent Method during the draw

Balance into repayment

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New repayment payment

—

Softened payment shock

—

Repayment interest saved

—

Repayment cash flow, with paydown

—

Because the rate is variable

Rate	HELOC	Draw surplus	Repay cash flow	Paydown

Draw surplus is the honest amount available to voluntarily pay down — it stalls once it goes negative.

Compare your home-equity options →

Email me these results — and tell me when rates change the math.

Independent
Numbers-first
Sources cited
No lender ownership

Estimates only — for general information, not individualized financial advice. Actual rates, payments, and terms depend on your lender and circumstances.