4 ms·

Holy crap! The price of this thing (not including the land) is like $400K "Monthly payment assumes line of credit of $389,000 equal to base cost of Dwell House

Holy crap! The price of this thing (not including the land) is like $400K "Monthly payment assumes line of credit of $389,000 equal to base cost of Dwell House with fixed 4.5% interest rate, a 30-year repayment term, and a 20% down payment."

notinfuriated 4y ago
Yeah, looks like the intended market is explicitly people who are already homeowners, in CA or WA, and have space for an ADU in the backyard, which they could use as supplemental income for renting. This is probably also why they point out the mortgage cost should be lower than rental costs in CA and WA (so you can attract renters). Although I assume 4.5% is actually more generous than you can get now. (Side note, does anyone know if installing an ADU, where you live, qualifies for a primary residence mortgage or not? You won't live in the ADU, but you live on the same land as it.) Otherwise, this is certainly too expensive, so the average person is not the market for this product. If an average person bought this, they're a bit foolish, probably better off buying existing property or trying to DIY a container home somewhere it's legal. Of course, the unit here itself looks quite nice, and I'd love to see them figure out how to lower prices and expand their market to customers who are aspiring homeowners, not people who already own and want some rental income.
- r00fus 4y ago
  I'd be willing to spend $100k - $200k but $400k is ludicrous. Rather just convert my garage. I don't believe the ADU qualifies for primary residence mortgage unless you have a HELOC.
- onlyrealcuzzo 4y ago
  I would imagine the main market is people who would take out a HELOC with their equity. But, yes, you shouldn't have problems taking out a construction loan to buy the ADU, and then after completion, refinancing as an investment property.
- jrockway 4y ago
  I think mortgage rates are like 7% now. If someone wants to loan me money at 4.5% over 30 years, I'm all ears.
- alistairSH 4y ago
  ... the intended market is explicitly people who are already homeowners, in CA or WA, and have space for an ADU in the backyard, which they could use as supplemental income for renting. Are there really many people with the finances to buy a $400k ADU for their backyard who want to rent it? That seems unlikely. More likely these are targeted for home studios/gyms or in-law (or adult child) suites. I have nothing against ADUs, and wish more areas allowed them, but $400k is an absurd price.
- bombcar 4y ago
  Just realized, what if the market is illegal ADUs - you can quietly build a foundation perhaps, and then get this dropped in in a day and that's much less likely to be noticed by nosy passers-by and city officials than a whole construction site for months on end.
theluketaylor 4y ago
It does seem to be a mostly turnkey price, including a (I'm guessing) slab foundation and running sewer, water, and electrical, and placing the structure, so that price is a lot less crazy. The other thing they have working against them is cost per sq ft goes up with smaller builds since you still need expensive spaces kitchen and bathroom and they can only shrink so far. In most high cost of living places where building ADUs makes the most financial sense I'd be surprised if you could do something like this start to finish for much less than 400k between permits, variances, drawings, groundwork, utilities, construction and finishes. The foundation and utils alone could be 100k+.
- bombcar 4y ago
  This whole house https://www.newhomesource.com/plan/plan-1-tri-pointe-homes-fallbrook-ca/1903702 https://www.newhomesource.com/plan/plan-1-tri-pointe-homes-f... is only $50k more, and that includes the land I suppose. This price seems out of whack unless they're abusing some loophole (technically it's a trailer so it's DMV) but most of those are pretty tightly closed.

notinfuriated 4y ago

Yeah, looks like the intended market is explicitly people who are already homeowners, in CA or WA, and have space for an ADU in the backyard, which they could use as supplemental income for renting. This is probably also why they point out the mortgage cost should be lower than rental costs in CA and WA (so you can attract renters). Although I assume 4.5% is actually more generous than you can get now. (Side note, does anyone know if installing an ADU, where you live, qualifies for a primary residence mortgage or not? You won't live in the ADU, but you live on the same land as it.) Otherwise, this is certainly too expensive, so the average person is not the market for this product. If an average person bought this, they're a bit foolish, probably better off buying existing property or trying to DIY a container home somewhere it's legal. Of course, the unit here itself looks quite nice, and I'd love to see them figure out how to lower prices and expand their market to customers who are aspiring homeowners, not people who already own and want some rental income.

r00fus 4y ago
I'd be willing to spend $100k - $200k but $400k is ludicrous. Rather just convert my garage. I don't believe the ADU qualifies for primary residence mortgage unless you have a HELOC.
onlyrealcuzzo 4y ago
I would imagine the main market is people who would take out a HELOC with their equity. But, yes, you shouldn't have problems taking out a construction loan to buy the ADU, and then after completion, refinancing as an investment property.
jrockway 4y ago
I think mortgage rates are like 7% now. If someone wants to loan me money at 4.5% over 30 years, I'm all ears.
alistairSH 4y ago
... the intended market is explicitly people who are already homeowners, in CA or WA, and have space for an ADU in the backyard, which they could use as supplemental income for renting. Are there really many people with the finances to buy a $400k ADU for their backyard who want to rent it? That seems unlikely. More likely these are targeted for home studios/gyms or in-law (or adult child) suites. I have nothing against ADUs, and wish more areas allowed them, but $400k is an absurd price.
bombcar 4y ago
Just realized, what if the market is illegal ADUs - you can quietly build a foundation perhaps, and then get this dropped in in a day and that's much less likely to be noticed by nosy passers-by and city officials than a whole construction site for months on end.

theluketaylor 4y ago

It does seem to be a mostly turnkey price, including a (I'm guessing) slab foundation and running sewer, water, and electrical, and placing the structure, so that price is a lot less crazy. The other thing they have working against them is cost per sq ft goes up with smaller builds since you still need expensive spaces kitchen and bathroom and they can only shrink so far. In most high cost of living places where building ADUs makes the most financial sense I'd be surprised if you could do something like this start to finish for much less than 400k between permits, variances, drawings, groundwork, utilities, construction and finishes. The foundation and utils alone could be 100k+.

bombcar 4y ago
This whole house https://www.newhomesource.com/plan/plan-1-tri-pointe-homes-fallbrook-ca/1903702 https://www.newhomesource.com/plan/plan-1-tri-pointe-homes-f... is only $50k more, and that includes the land I suppose. This price seems out of whack unless they're abusing some loophole (technically it's a trailer so it's DMV) but most of those are pretty tightly closed.