What We Do
We aim to break cycles of injustice by building ADUs in the backyards of homes in our community.
How It Works
It’s pretty simple.
You let us know that you’re interested, and we’ll come look at your backyard.
Based on your land, and your goals, we’ll take a look at your finances, and together we’ll figure out the best route to funding an ADU (accessory dwelling unit) in your yard. There are a few options, but in short—if the rent coming in is more than the money going out, the ADU effectively pays for itself. Don’t worry, we’ll go through all the details together.
We will build it—from permitting to being move-in ready—without you having to lift a finger, or deal with much of anything.
We’ll work together to find the right tenant (or tenants) for you and your family. Once they move in, we’re there to help with everything from repairs to tenant care to just generally having your back.
When you’re ready, we’ll turn full management of the ADU over to you, and be off building more. We’re just an email away if you need us.
Simply put, we build you a tiny house, you build community, and get to enjoy the warm fuzzy feeling of knowing you’re providing equitable housing in your community.
FAQs
Who pays for the ADU (Accessory Dwelling Unit)?
We have bank partners who have created a few financial products to fund the ADUs, so the short answer is…it depends.
Now for the long answer (note: these numbers are examples, prices vary by site):
If you have the credit and equity, we’ll go the traditional route of a HELOC (home equity line of credit) or a cash-out refinance, or a renovation loan. In this scenario, you’re paying for the ADU with your equity, and we’re there as support, to answer any questions along the way, and make the process as easy as possible.
We’ll also leverage our position to get you the best deal possible. Now, you may be wondering how is that “getting an ADU at no monthly cost—ever”? Well, an ADU might cost $125,000 dollars. Convert that into a 30-year mortgage, the monthly payment is around $850. Rent for that unit is between $900-$1200 per month. So every month you’re not paying $850, you’re making $50-350 (and providing housing for folks!)
If you don’t have the credit or equity, there are investor funded products*
The Anti-Debt Equity Approach: If you’re against debt, you could “sell” a percentage of your home that’s equal to the value of the ADU. In this scenario, an investor pays for the whole thing, and it’s backed by a percentage of your property’s future value. You as homeowner could collect all the rent and when you sell your home, you would “buy back” the percentage you sold out of the sale proceeds, or through a cash-out refinance. In short, investors and renters pay for the ADU in this model.
* currently, Coram is not making home investments, but we are in network with a number of companies who are making these investments.
How is the tenant selected?
We have a network of non-profits, partners, and community leaders who direct people our way who’d benefit from affordable housing. We also have our own application pool where any and everyone is welcome to apply to live in one of the ADUs. However, our best case scenario would be that there is someone in your circle who could use affordable housing, and you could rent to them. Coram is about dismantling the separation that exists between us, and that only happens when living in community. If the homeowner can’t find someone, then based on the tenants needs and the homeowners hopes we’ll try to create a few matches that we think will work. Then we’ll work with the homeowners to narrow it down.
What happens after a tenant is selected?
Typically, once a tenant is selected, they will meet with the homeowner to forge a partnership and go over “best practices” on sharing land and space together. Tenant and homeowner will sign a rental agreement that is 3 months long. Every 3 months, we all reflect on the living situation and determine if it is still working for all involved. More on this below
Am I, the homeowner, responsible for being the property manager?
Not at all… unless you want to be! Coram can be as involved or uninvolved in property management as you’d like if you funded the ADU. In cases where we fund the ADU, we are automatically the property manager for at least the first 3 years.
Our property management arm is a non-profit that provides holistic tenant care. We do this for 20% of the rent—a quarter of which goes to a tenant investment account, so that they too are building wealth in this process. Coram management would provide lease agreements, best practice documents, repair service, legal aid, and just about anything you could imagine regarding caring for the ADU and the tenant living there.
We have a few property managers on our staff who will handle everything. They will interface with the tenant. They will order repairs and make sure they are completed. They will do periodic checks to make sure all is well. Our property managers do it all.
(Currently Not Applicable) What happens if I sell the house before Coram Houses has recouped their investment?
Well, there are a few options here. First, we’ll buy your house at market value! This has a few benefits:
1. We can continue using the property to provide affordable housing!
2. You get to profit off the sale without having to go through the entire home sale process!
Another options: You can choose to buy out the remainder of the ADU. If neither of those sound good, then before you sell we can come in and remove the ADU to use elsewhere.
How does Coram Houses make money?
While we are a business, we differ from most in that we don’t maximize profits. That’s just not why we exist. Our business model is designed to maximize hope, mutuality, solidarity, and community. In our rent sharing model, we recoup the cost of the build, plus an additional percentage to cover the expenses of running the business. In our client-funded model, we operate on a cost-plus basis, meaning we change a builder’s fee on top of the materials and labor to cover salaries, insurance, vehicles, and all the things needed to run a business.