Look at your backyard right now. What do you see?
If you're like most Southern California homeowners, it's patchy grass, a rusting patio set, and maybe a trampoline your kids outgrew three years ago. That space isn't earning you a dime. It's just sitting there.
Now imagine that same footprint generating $1,900 to $3,900 a month in rental income.
That's not a fantasy. That's an ADU — and in 2026, it's one of the smartest financial moves a California homeowner can make.
Why 2026 Is the Sweet Spot
California has spent years removing barriers to ADU construction, and the cumulative effect is hitting critical mass.
Cities that once fought ADU development are now actively encouraging it because the housing shortage demands it.
Construction costs have stabilized after the volatility of 2022-2024, and prefab builders have compressed timelines to as little as 6-8 months.
Meanwhile, rents keep climbing — a well-designed one-bedroom ADU in a desirable SoCal neighborhood can command $2,500+ per month without breaking a sweat.
Even at a conservative $2,200 monthly, that's $26,400 a year from space that was previously earning you nothing. Over ten years, that's $264,000 — before you factor in the property value increase from a permitted, income-producing unit on your lot.
The Financing Wall — and How to Get Past It
This is where most homeowners stall. They see the opportunity, run the numbers, get excited — then hit a wall.
Traditional lenders want to see the project completed before they'll lend against it. If your credit isn't pristine or your income is non-traditional, conventional banks may not even call you back.
That's exactly the gap Capital Direct Funding was built to fill.
We lend based on After Repair Value (ARV) — meaning we underwrite to what your property will be worth once the ADU is complete, not just what it's worth today.
Our approvals are measured in days, not months. And we specialize in real situations: self-employed, irregular income, equity-rich but cash-light. These aren't disqualifiers for us — they're our sweet spot.
Who Benefits Most
You don't need to be an investor to make this work.
If you've owned your SoCal home for 5+ years, you likely have the equity.
Parents housing aging family members save tens of thousands annually compared to assisted living — and the unit retains rental value if circumstances change.
Homeowners approaching retirement can turn an ADU into a private pension: consistent monthly income backed by a physical asset, no stock market volatility required.
And if you've priced investment properties lately, building on land you already own skips the acquisition cost entirely.
Your Backyard Has Been Freeloading Long Enough
Every month that unused space sits idle is money left on the table.
The regulations are favorable, rents are strong, and the financing exists — even if your bank said no.
It's time to put that space to work.
Capital Direct Funding
Turning dead space into dependable cash flow.