New to Real Estate · McAllen, TX · Member since 2017 · 19 posts · 7 votes
What are the opinions of Biggerpockets concerning BRRRR'ing a Mother-in-Law suite type property? Is there potential for a good investment if a good deal is made? Are they harder to rent out or even just flip due to the property being a mother-in-law suite?
Investor & Agent · Tulsa, OK · Member since 2016 · 1k+ posts · 1k+ votes
7y
Hi Paul, it's a valid question for sure. My opinion is that they make a lot of sense; I myself bought something like this in OKC. I daydream of owning and living in one in an area like Houston. I'm sort of new here, as of 3 months ago, so my perspective maybe limited but if just looking for an opinion here is my 2 cents.
I do think the caution in the question is legit. You may already know, a detached unit does not count as square footage for the primary property. So, that can affect things in terms of resale value.
Also, one issue we have faced with our OKC property, sense moving away, is that we are limited to the Air BNB style of renting; and that gets harder to do from far away. I say that because, in the area it is in, there is growth and development but still some C - D class properties not too far away and therefore we could inherit a bad tenant situation if we offered the garage apartment at a cheap price.
In other words, I myself wonder if it makes sense to rent something that can only get maybe $600 max. Houston numbers are probably different. But for the sake of my experience, it is a concern for me.
That said, I still love my rental, with long term goals in mind. I don't regret buying it. I probably am limited in who would want it for resell value, but if the goal is buy and hold that doesn't matter as much.
I am a dad and husband, so if I were to try a house hack approach, it almost has to be garage apartment, and I myself actively look at them for the sake of educating myself to whats out there in the Houston area.
If you find out anything else, let me know, hope my thoughts help you.
Architect · Providence, RI · Member since 2016 · 257 posts · 195 votes
7y
I can't tell you exactly how it'd work out for you. However, a lot of our clients WANT to turn their SFH's into SFH + MIL suite homes - exactly so they can have the MIL at home. I think there's a market for these properties. Honestly, there's also a market for folks who want to live in a SFH and rent out a small apartment too.
If you are in Houston, you know that there's TONS of SFH's with garage apartments, these are super common, and make a lot of sense down there. Good for buy and hold too.
Investor & Agent · Tulsa, OK · Member since 2016 · 1k+ posts · 1k+ votes
7y
Hi Paul, it's a valid question for sure. My opinion is that they make a lot of sense; I myself bought something like this in OKC. I daydream of owning and living in one in an area like Houston. I'm sort of new here, as of 3 months ago, so my perspective maybe limited but if just looking for an opinion here is my 2 cents.
I do think the caution in the question is legit. You may already know, a detached unit does not count as square footage for the primary property. So, that can affect things in terms of resale value.
Also, one issue we have faced with our OKC property, sense moving away, is that we are limited to the Air BNB style of renting; and that gets harder to do from far away. I say that because, in the area it is in, there is growth and development but still some C - D class properties not too far away and therefore we could inherit a bad tenant situation if we offered the garage apartment at a cheap price.
In other words, I myself wonder if it makes sense to rent something that can only get maybe $600 max. Houston numbers are probably different. But for the sake of my experience, it is a concern for me.
That said, I still love my rental, with long term goals in mind. I don't regret buying it. I probably am limited in who would want it for resell value, but if the goal is buy and hold that doesn't matter as much.
I am a dad and husband, so if I were to try a house hack approach, it almost has to be garage apartment, and I myself actively look at them for the sake of educating myself to whats out there in the Houston area.
If you find out anything else, let me know, hope my thoughts help you.
Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
7y
Generally mother-in-law units or ADU's are a good way to increase your cash flow. That being said, especially if it wasn't permitted or is legally nonconforming, it won't add much to the appraised value or sale price.
New to Real Estate · McAllen, TX · Member since 2017 · 19 posts · 7 votes
7y
@Nate Sanow
Hey Nate, thanks for replying! I probably should have clarified a little more in the original post, but the property in its whole is just a MIL Suite. It looks as though the original property owners are selling off just the suite and a portion of their land with it possibly because they couldn’t finish building it?
My biggest concerns with it are the fact it is just a MIL Suite, it is set back about 40-50 yds from the road behind the main property that’s not for sale, and that it’s going to need some good rehabbing. The rehabbing isn’t as huge a concern as the rentability/resale value though.