All Forum Posts by: Account Closed

 You can get a non-recourse loan, but you will likely end up having to put more down (i.e. 40-50% down).

 I refi'd with RedCanoe.  Yes, I personally guaranteed the loan.  The rate was 4.99%; 5 year adjustable on 30 yr amortization.  

Keep in mind if this house is in the City of Seattle, an ADU is only legal (in most cases) if the owner property is residing in the property. So, if you move out and rent both the house and the ADU, you risk running into legal/allowed use issues with the city of Seattle. Given that landlords are a favorite target of the city...you may want to be careful. I'm not sure if the new RRIO program covers this on the inspection, but I do know they look for illegal rental units (which the ADU would likely be considered if you don't live on property). When the ADU was constructed (or if you purchased the place with an ADU in it); you would have been required to sign an ADU owner occupancy covenant.

A quick google search of Seattle ADU covenant will get you the details.

Anyway, food for thought.  

Not sure on what a garage would go for in that area.  Check local storage unit pricing.  You can also look on craigslist for what garage rentals are going for.  Keep in mind that landlord tenant law is different for 'storage units'.  Their are rules around how you dispose of tenant property if they stop paying.  

Have you considered renting out your garage?  Lots of people need storage space for their 'stuff'.   Even when you rent the house, you could rent the garage to someone other than the tenant.  So you could have a little bit of income now and when you turn it into a rental, you would be able to maximize cash flow.  Keeping the parking spot now would be better in that situation as you would want to have a parking spot for your tenant.  

There is always risk in any real estate investment; if you avoid all risk - then you will never get in the game.  Keep in mind that down turns don't always affect rent the same way they do property prices.  For example, if rates go up a lot, the housing market will likely be negatively impacted; however, the rental market will likely improve as more people will need to rent as less people will be able to afford to buy.  

Also, rent's increase most years, so the profit per door goes up most years.  During a down turn, tenants are going to immediately vacate a lease mid-term.  So there is time to react.

Most importantly; this is one of the reasons I have a reserve fund and also a personal emergency savings fund.  

My biggest risk is the socialists on the Seattle city council, not the thin margins.  

With Seattle zoning you are kind of stuck right now. I looked into this a few years ago and the ADU is the only option for SF zoning. They are talking about removing the occupancy requirement, but I'm not sure that will happen. Hopefully the city wakes up...we have a housing shortage here in Seattle and the city is trying to solve it but they refuse to recognize the core issue...that 65% of the land in Seattle is zoned Single Family.

I looked at rezoning and even paid the $100 for the city permit coaching on it.  I have LR2 zoning on my block (two houses down) and asked about extending that zoning further down the street.  The city told me that it was very possible, but I'd have to apply/pay for a re-zoning study in which the city may or may not approve.  Their rough estimate was $50k for the study.  Obviously I chose not to pay for this; I figured since I live on an arterial street and I would just wait for the city to eventually re-zone.  

Home Depot carries multiple brands of windows.  I don't think Curtis is suggesting to purchase off the shelf windows.  I get all my windows via special order at Home Depot myself and lead times are 2-3 weeks.  

Since I buy for rentals, I don't go with high-end windows, which they do carry; I purchase Jeld-Wen 4000 series vinyl windows.  The 1000 and 2000 series are pretty cheaply made (and cheap); however the 4000 series is the higher-end window (in the lower end brand); but it doesn't cost as much as a Pella or MillGuard window.   Curtis is correct; if you purchase a window order over $2000 (I think that is the amount); they will run it through the deals desk in Atlanta and cut you a deal.  

 Thanks for your feedback!  Always glad to sit down and talk real estate!

Private money generally has better terms.  Most private lenders want to be on the deed of trust and have official paperwork so as to protect themselves.