We're pulling back the curtain on an incredible real estate investment strategy executed by one of our clients—a full-time W-2 tech employee from a Big Four company—who is positioned to make an estimated $340,000 on a single property deal.
This case study is a masterclass in leveraging unique financing and land-splitting to generate significant wealth.
The Acquisition: Turning a Competitive Bid into an Opportunity
The journey began with the purchase of a single-family home.
- Original List Price: $950,000
- Final Purchase Price: $1,070,000 (The client secured the property in a competitive bidding situation.)
Crucially, our client's initial financing was secured using a 5% down owner-occupied loan, allowing her to acquire the property with minimal capital upfront while immediately establishing residency.
Phase 1: Creating Value with Condoization
The real magic started shortly after closing. The homeowner immediately embarked on a process called condoization, which legally splits a single lot into two separate, buildable parcels.
- Out-of-Pocket Investment (Permits & Condoization): $30,000
This process effectively turned the original single-lot purchase into two distinct legal units of land. Once the condoization process was complete, she took the next strategic step: refinancing the original main house. This action essentially freed up the second newly created lot, making it an unencumbered asset.
Phase 2: Financing the ADU Build
With the second lot now free and clear, our team stepped in to provide financing for the construction of an Accessory Dwelling Unit (ADU) on this new parcel.
- ADU Construction Loan Amount: $460,000
- ADU Specifications: 1,000 sq. ft., 3 bedrooms, 1.5 baths
This is a classic example of leveraging the equity and potential of a property to fund a high-return development.
The Expected Payoff: $340,000 in Value Creation
The investment thesis is simple: the cost of building the ADU is far lower than what it will be worth once completed.
Once the ADU is finished and ready for sale or rent, here’s the projected outcome in plain text:
Projected ADU Market Value:
The newly constructed 1,000 sq. ft. unit is expected to appraise at approximately $800,000.
Total All-In Cost:
The estimated cost to build the ADU is about $460,000, covering the full 1,000 sq. ft. construction.
Total Profit / Equity Created:
Based on today’s valuations, this project is expected to generate around $340,000 in new equity from this single development.
The bottom line: the client invested under $100,000 to acquire the property and complete the condoization. By combining an owner-occupied loan, lot-splitting, and construction financing, this W-2 tech professional unlocked roughly $340,000 in wealth through one strategic deal.
Ready to Launch Your Next Real Estate Project?
This case study demonstrates the power of innovative financing solutions for real estate investment. Whether you are looking to start your next ADU build, execute a fix and flip, or secure a new rental property to diversify your portfolio, strategic funding is the key.
At CertainLending, we specialize in flexible, data-driven loan products designed for investors navigating today’s housing landscape. If you’re interested in learning more about our financing solutions, visit CertainLending.com or reach out to our team at +1 (833) 747-3927.
