SkyDADU Planning Guide

Downsize but Stay on My Property

SkyDADU 100% Financing Program – Downsizing Strategy

This program is designed for homeowners who:

• Want a package or custom, aging-in-place ready residence
• Want to remain on their property
• Have significant equity in their home
• Plan to sell the primary residence after the DADU is complete
• Want to minimize or eliminate upfront construction costs

How It Works:

1. SkyDADU finances and builds the custom DADU.
2. You remain in your current home during construction.
3. You move into the new DADU.
4. The primary residence is sold.
5. SkyDADU is reimbursed through escrow.
6. Any remaining proceeds belong to you.

Key Qualification Metric

Equity Coverage Ratio (ECR)

We typically look for projected home-sale proceeds capable of covering at least 50% of the DADU development cost.

Potential benefits include:

• Minimal upfront capital
• Possible capital gains tax advantages
• Aging-in-place design
• Long-term property ownership
• Generational wealth creation

Housing for Parents, Adult Children, or Extended Family

SkyDADU 100% Financing Program – Multigenerational Strategy

This strategy is designed for families seeking to:

• Keep loved ones nearby
• Avoid assisted living costs
• Create independent living space
• Preserve family wealth

Common Uses:

• Aging parents
• Adult children returning home
• Caregiver housing
• Long-term family planning

Key Qualification Metric

Equity Coverage Ratio (ECR)

The primary consideration is whether sufficient equity exists to support the project.

Potential benefits include:

• Greater family flexibility
• Reduced future senior housing costs
• Increased property utility
• Long-term asset appreciation

Monthly Passive Income

Partnership 50% Financing Program

This program is designed for homeowners who want to:

• Keep the primary residence
• Keep ownership of the DADU
• Generate rental income
• Create long-term wealth

Whether you live on the property or already own it as a rental investment, this strategy can help you develop a new income-producing asset.

How It Works:

1. Homeowner contributes 50% of development costs.
2. SkyDADU contributes 50%.
3. DADU is completed and rented.
4. Rental income is shared 50/50 during Year One.
5. The rental history helps establish income performance.
6. The homeowner may then qualify for a DSCR loan.
7. The homeowner buys out SkyDADU’s ownership interest.
8. The homeowner receives 100% of future rental income.

Key Qualification Metrics

• Cash-on-Cash Return (COCR)
• Debt Service Coverage Ratio (DSCR)

What is DSCR?

DSCR (Debt Service Coverage Ratio) measures whether a property’s rental income is sufficient to pay its mortgage obligations.

Many lenders use this metric when approving loans secured primarily by rental income rather than personal income.

Typical Return Targets

• Minimum COCR: 2× 10-Year Treasury Yield
• Preferred COCR: 8%–12%
• Exceptional COCR: 12%+