Ha, I was looking at the same link you have. The post I relied on was:
Hi there - my name is Spencer and I’m one of the co-founders of Rent the Backyard.
@simonebrunozzi – great summation of the ADU climate in the US. In California, the government has become even more receptive to ADU in the last few years (https://www.sfchronicle.com/bayarea/article/Are-accessory-dw… )
Our financial model is different than a loan. We use the split from the profits of the unit to make back our money and secure that with a lien on the home . The great thing here is that this lien decreases each year over 30 years until it goes away and you own 100% of the unit and its proceeds.
The great thing about an ADU is that it appreciates the value of your home. We’re focused on building long term partnerships with homeowners but if you decide to move before the lien decreases to 0 you can pass the contract to the next homeowner who can continue it to completion. Or you have the flexibility to buy out the contract. When this happens, the increase in value the ADU brings your home can often cancel out or make you money compared to if you didn’t have the ADU.
You are right about the potential limits on taking further debt on a home with our agreement and that’s a value call each customer will need to make: earn rental income from working with Rent the Backyard, or maximize the access I have to my home’s equity.
I could be missing something else in the thread (I did a page search for “lien” rather than slogging through everything). Since they usually refer to the unit as “the unit”, I’m assuming “home” means your house. If they are using that interchangeably, then that doesn’t speak well to them either. Obfuscation in this arena does not inspire trust.
(also, I really really really wish posting multi-paragraph quotes didn’t break block quoting)
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