So just recognize this could be lengthy process if they default.If it was me, I would take it as a non-refundable deposit with a letter of intent and a purchase and sale agreement that the money is a down payment, is not refundable and they must execute the closing by a specific date otherwise they forfeit the money.

Which is why you end up with lengthy non-competes, 3-year (or longer) earn-outs, staggered payouts based on sustained revenues, etc.  

Various classes have different property values, tenant pools, turnover ratios, etc  I’ll posit a link below as this can get to be a lengthy note  https://www.realtymogul.com/knowledge-center/article/what-is...Are you looking into short term, mid term, or long term rentals?

A local RE professional should be able to provide this information to you as well.In New York, we deal with this scenario frequently and oftentimes it does not make sense to legalize ADUs because the permit process is extremely lengthy, the cost is high (sometimes $150-300K for 1 ADU unit), and the potential increase in property valuable is not worth the risk.If you already have an approved permit/plan and can get your renovation down to $80K, you may want to consider this project if the ARV is say north of $800K.** You should also look into any potential property tax increases associated with this change.

I'm not 100% but Easy Street is all over bigger pockets so I'm sure one of them will comment with a lengthy reason why. 

Like Justin said the process is a little bit more lengthy than expected but I'm happy with the way things are going so far.

@Steve @Steve K.I appreciate the incite, very lengthy but informative.

Both are lengthy processes and while the fact pattern is favorable on your end are you prepared to possibly wait years for your capital to be returned or take title to the property? 

Not sure about Seattle specifically (it may be more generous), but changing SF zoning to MF and having a new meter put in, etc. can be a time consuming and lengthy process.

Her income will not count towards the new mortgage as she just finished up lengthy stay at home mom duties.