5 ms·

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 u

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.

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.