How to Unlock Your Home’s Hidden Passive Income Stream (ADUs 101)

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Mar 19, 2025

Derek Sherrell, known as "That ADU Guy," is a real estate investor specializing in accessory dwelling units (ADUs). He reveals how to unlock hidden passive income from your home through ADUs, discussing their cost-effectiveness and high returns. Derek shares crucial tips for designing and financing your first ADU and emphasizes the importance of property selection. He provides insights into navigating local zoning laws and highlights how ADUs can contribute to solving housing shortages, especially in high-demand areas.

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ANECDOTE

First ADU Experience

Derek Sherrill built his first ADU in high school with his woodshop teacher.
They built it for another teacher, and it was illegally constructed.

INSIGHT

ADUs as Multifamily Hack

ADUs offer a unique way to build small multifamily units in low-density residential areas.
They can be financed residentially with long-term fixed-rate mortgages.

ADVICE

ADU Evaluation Criteria

When evaluating properties for ADU potential, prioritize location, access, and infrastructure.
The primary house's profitability is less important initially.

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