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A Seattle start-up that helps you buy a house

Loftium ponies up the down payment if you agree to Airbnb a room for up to three years.

Seattle — There may not be enough room to swing a cat, but this cozy little mother-in-law, with its cozy little kitchen and bathroom is the reason Laura Coe got $9000 from a Seattle startup to help with the down payment on this Capitol Hill craftsman.

“What it did is it allowed me to get in now,” said Coe.

Loftium is the name of the start-up, co-founded by Yifan Zhang and Adam Stelle, entrepreneurs who see opportunity in the billion dollar Airbnb game.

“Loftium provides you your down payment,” explained Zhang. “In exchange, you Airbnb an extra bedroom for one to three years. That's it. It's not a loan. You don't have to pay us back. We just share in that Airbnb revenue with you.”

In return for the $9000, Coe will give Loftium a 70 percent cut from the mother in law for one year.

“So after a year, she is done with the contract,” said Zhang. “She has her house and she can continue to do the Airbnb and keep 100% of that income if she wants to.”

Zhang and Stelle have run the numbers, and hired more number crunchers, to come up with an algorithm that can predict how much income any given room can generate.

“You can go to loftium.com, sign up, and we can give you instant down payment estimates or offers on any home in the Seattle area,” said Stelle.

Thousands of prospective home buyers have already signed on including Mike Washington.

“My house is pretty cool!” said Washington.

He just bought a six bedroom house for his family with the help of $40,000 from Loftium.

In return, Washington will Airbnb the three bedrooms on the bottom floor of his house for the next three years.

“We've been able to take what we thought we could do in maybe three years and actually do it now so it's pretty cool,” said Washington.

Seattle is the first test market for Loftium and it's a very good test for this concept. You've got double-digit appreciation in some neighborhoods, multiple offers, and lots of talk about changing regulations for short-term rentals.

Evening is your guide to Seattle and the Pacific Northwest. Watch it weeknights at 7:30 on KING-TV Ch. 5 or streaming live on KING5.com. Connect with Evening via Facebook, Twitter, Instagram or Email.

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