First flip - convert large 3-car garage to 2-car to add sqft?

[Daniel Ferreira]

Hi everyone,

I'm analyzing a potential flip, which would be my first.

The house is 2200sqft, 2 bedroom, 3 bathroom, and has a 900sqft 3-car garage that's part of  the house. The current layout lacks bedrooms, which may make it harder to sell to families. And the garage feels oversized, so I'm thinking about the possibility of converting it into a 2-car garage and adding ~300sqft of living space as another bedroom and hallway that still connects the house to the garage, so that the new layout will be 2500sqft, 3 bedroom, 3 bathroom with a 600sqft 2-car garage. There is also potential to have a 4th bedroom with a simple layout change inside but I haven't decided that yet, as it would be on the smaller side. I'd also be renovating the bathrooms as they are quite outdated.

The layout allows for this conversion, and I'm thinking 2500sqft/3br/3ba/2car has a significantly higher ARV than 2200sqft/2br/3ba/3car. I know the cost of the conversion, and the ARV increase to me seems several times higher than this cost. But given this is my first time, I wanted to ask if anyone's had experience with this and if there are any blind spots to my thinking.

Maybe it won't add as much value for some reason? Some things that might be a concern:

1) Obviously have to make sure things are all permitted first

2) I don't want the room to "feel" like an addition, so flooring has to be same level/standardized with the rest of the house

3) Unlike the rest of the house that has an identically-shaped 2200sqft basement underneath, this added space will not have a basement directly underneath it -- I'm not sure if this poses major cons for some reason that I'm not aware of

4) Especially given the lack of basement underneath, I have to make sure that the HVAC can still somehow be piped into this room

#2 and #3 are probably my biggest concerns (#1 and #4 I can find out relatively easily)

Any tips/thoughts or other experience would be greatly appreciated. Thank you!