All Forum Posts by: Heather Hearsey

97% of all MFR's in Seattle require a contract before you can even see them, let alone inspect them, has to do with landlord tenant laws and general lack of inventory. The 3% that allow viewing will set up a date for walk throughs and will be attended by at least 40 people, more depending on desirability.

It sounds like there are other people interested so you may not have much wiggle room in your offer unless you find something big. If you do find things and tell the seller then they will be required to tell any future buyers.

I actually took a real estate class about this after I had a client have an issue. Client had a medical license and wanted to re-finance their home, they asked the broker and they didn't know whether it would be an issue and advised to just go ahead with the appraisal. The appraiser said every thing was to code and that he would try to be elusive in his description of the basement but that he had never encountered this situation before. Well, not only did they not get the re-fi approved and had to pay $500 for the appraisal but the mortgage company asked them to find a new mortgage company within the next 6 months (whether they stopped growing or not). They cleared the basement out and the mortgage broker found another lender and was nice enough to pay for the new appraisal so it worked out in the end.

This was brought up in my class as well as the issue of insurance. If you knowing or unknowingly have a growing operation in your house and there is a fire or flooding or any kind of claim and they find out that there was growing they will most likely not cover you for the damage. Even though it may be legal in your state the mortgage and insurance companies are going to side with Federal law. The other thing the instructor (lawyer, RE agent from Denver) said was that when selling a house you should list it on the Form 17 and that you should hire a Hazmat type cleaning company, just in case there is mildew in the walls or ventilation system. I doubt many people will do that but he said there were a growing # of company's in Colorado specializing in cleaning grow houses.

If you're going to allow a tenant to grow I would suggest making sure that they have properly sealed up the room(s) whilst having appropriate ventilation to prevent mildew and that all the electrical is to code. Also, have a plan in case there is an emergency and the authorities or insurance companies may need to enter the home; perhaps even a contract that states that the tenant is responsible for any losses you may incur due to their growing. You may make an extra $300/mo. but you don't want it to cost you the full value of your property if the place burns down and your insurance company won't pay you.

I have a question for those of you who have posted that own multiple MFR's or have mentioned developing on their current lot. I have a duplex in Seattle on a large lot and have thought about

a) Building a larger MFR or building townhouses

b) Buying a neighbors house that has a potential for a legal MIL

I currently don't have much cash but have equity in a home and the duplex as well as good income and credit. As far as I know I would need 25% down in order to buy something else (I don't have that much) and I am not sure about building loans. Any advice on getting loans for either of these situations or any input is helpful?

Thanks!