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BiggerPockets Community,
My wife and I currently live in Seattle and are looking for guidance in our real estate investment strategy. Currently, we own a home in West Seattle and have approximately $200K in equity. We bought the house in 2021 and have a 3.5% interest rate. Our current house is 76 years old and will soon require major repairs. We are in the process of identifying lenders to get a better understanding of the lending requirements for these ideas. If you are a local lender interested in working with us, please do not hesitate to reach out.
Below are some thoughts and we'd love y'alls feedback. If any other ideas are out there, please share.
Thank you all for your guidance!
Thoughts:
1. Build DADU in backyard while living in single family. Once DADU is complete, move into DADU and tear down single family and rebuild single family with ADU.
2. Tear down current house and build single family with ADU and DADU and complete construction all at the same time. NOTE: We would most likely find a free place to live aka the in-laws :-)
3. After completion of construction, do we condoize and sell the single family and ADU (separately) and keep the DADU for rental and living while in town?
Considerations:
-Cost to build at $350/sqft
-Estimated value of 1,000sqft DADU (3bd / 2ba) after completion: $600K
-Estimated after completion value of 2,000sqft single family (4bd / 3ba): $900K
-Estimated after completion value of 1,000sqft ADU (3bd / 2ba) after completion: $550K
#3 All Forums Contributor
- Investor
- Virginia
Quote from @Justin Harris:
BiggerPockets Community,
My wife and I currently live in Seattle and are looking for guidance in our real estate investment strategy. Currently, we own a home in West Seattle and have approximately $200K in equity. We bought the house in 2021 and have a 3.5% interest rate. Our current house is 76 years old and will soon require major repairs. We are in the process of identifying lenders to get a better understanding of the lending requirements for these ideas. If you are a local lender interested in working with us, please do not hesitate to reach out.
Below are some thoughts and we'd love y'alls feedback. If any other ideas are out there, please share.
Thank you all for your guidance!
Thoughts:
1. Build DADU in backyard while living in single family. Once DADU is complete, move into DADU and tear down single family and rebuild single family with ADU.
2. Tear down current house and build single family with ADU and DADU and complete construction all at the same time. NOTE: We would most likely find a free place to live aka the in-laws :-)
3. After completion of construction, do we condoize and sell the single family and ADU (separately) and keep the DADU for rental and living while in town?
Considerations:
-Cost to build at $350/sqft
-Estimated value of 1,000sqft DADU (3bd / 2ba) after completion: $600K
-Estimated after completion value of 2,000sqft single family (4bd / 3ba): $900K
-Estimated after completion value of 1,000sqft ADU (3bd / 2ba) after completion: $550K
The real question is, how accurate are the numbers and how much wiggle room do you have. If the DADU or ADU pricing is off and its costs $350k to build it (and is that number correct) thats the real question. Based on above and you find somewhere else, sure knock it down and build if those numbers are correct.
