Spend 6-figures on a Triplex Conversion or No?

[Christopher B.]

I'd appreciate some opinions on this. I have a sfh rancher that has a detached garage with apartment above it that came with a package of 4 houses. I intended on converting the house to a duplex but am reconsidering. Below are what I consider conservative rent #'s, I feel I may be able to get an extra $100/month income via rent and storage units and I also feel the home will appraise enough for me to pull all my cash out but include a worst case scenario of putting 25% of my total investment down. The rehab and operating expenses should be close.

Basically, the #'s reflect me converting the sfh to a duplex (city has approved my plans), splitting the garage into 2 10x20 storage bays, and remodeling the garage apartment. The house is in rough shape and needs everything, roof, plumbing, electrical, 3 HVAC's, etc.

Purchase: $40,000  1737s.f. sfh ranch with 580 s.f. detached garage apt

Remodel: $103,000

Rent: $2100/month  $700 2/2 apt, $700 2/1.5 apt, $600 2/1 $100/month for 2 storage bays

Op. Exp.: $982  includes: 10% mgmt., 5% maintenance, 5% capex (replacing everything), 8.33% vacancy,$60 insurance, $130 Lawncare, $11 Legal/Admin/Acct., $33 pest control, $133 property taxes, $10 Utilities common area light

NOI: $1118

PI: $757   *$143k loan , 4.875 30yr fixed

Cash Flow: $361/ month

Cap Rate: 9.4%

CoC: N/A, cash-out refi

Assuming 25% down, $35,750

$568 PI  *$107,250 loan, 4.875 30yr fixed

Cash Flow: $508/ month

CoC: 18.5%

It's a big remodel, do these #'s validate the headache for you? I could probably sell the property as-is and make $10k, maybe more on it and do nothing. Thanks for reading.