27-year-old pays $0 to live in a ‘luxury tiny home’—how she built it for $35,000: ‘I forget I’m living in a shed’

‍Recently, CNBC published an article about the journey of our co-founder, Precious Price, as she built an ADU in her backyard. Read the excerpt below and continue reading on the CNBC website.

In 2020, I built a tiny home in the backyard of my 1,400-square-foot house in Atlanta, Georgia for about $35,000.

Today, it’s my primary residence, and I live in it for $0; my mortgage, property taxes and utility bills are covered by rent I collect from renting out my main home.

The house is only 296 square feet, but it’s efficiently designed. A lot of the time, I forget I’m living in a shed.

Tiny homes are just beginning to gain traction in the U.S., but the process isn’t as straightforward as it should be. Here’s my advice on how to build your own backyard tiny home:

1. Check your local zoning.

Although some major cities are easing regulations on tiny homes to encourage more housing supply, many still restrict what you can and cannot do with your land.

You can typically find the zoning codes for your property address through your city’s local zoning map. Do a quick Google search with your city’s name and the terms “zoning map” or “zoning office.”

If nothing comes up, call your city’s building and planning department.

Your zone will determine whether or not tiny homes are permitted, as well as how big your lot needs to be in order to build one, and the maximum size of the structure.

2. Consider your financing options.

Instead of a bank loan, I cashed out $8,500 in stocks and put about $20,000 on my credit cards to pay for everything. This allowed me to get cash back.

But if you need financial assistance, there are many other options:

• A home equity line of credit (HELOC) lets you borrow against the available equity in your home, and the house is used as collateral for the line of credit.
• A home equity loan gives you a lump sum payment with a fixed (but usually higher) interest rate.
• Cash-out refinancing replaces your existing mortgage with new terms and allows you to cash out the difference.
• A construction loan is short-term financing that can be used to cover the costs associated with building a house, from start to finish.

It may also be helpful to look into community development financial institutions, which help provide financial resources to low-income communities.

3. Pick your structure.

The most expensive but customizable option is a “stick built” — a home built from scratch. The most cost-efficient is a prefabricated unit.

I used a shed from Liberty Storage Solutions, which eased labor costs because the structure already had windows, a door, and the foundations for lighting and electricity.

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