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Updated almost 8 years ago on . Most recent reply

Converting a 4-plex into an 8 unit, does this make $$ sense?
This is the breakdown of the deal:
1. I own a 4-plex (2-1 story duplexes side by side) with a-lot of equity.
2. Get a Heloc on my property for a deposit to get construction financing
3. Apply for a construction loan to build a second story (can be built for 100k-150k....I am a GC)
4. Once done, apply for a new loan and pull out equity (or do a 1031 exchange after I sell the property) from my project for my next investment. (8 units in my area sell for 475k -575k)
Your input is appreciated, thanks.
Most Popular Reply

@Dan Voykin, what are they worth as-is? My first instinct would be to arrange them to be 2x 4-plexes (rather than 1x 8-plex), or is that already a given? ie. Are Titles already separated?
Reason: So as NOT to eliminate FHA-Loan Applicants/Buyers, who want/need to "house-hack".
Otherwise, the only thing Buyers will take into account is the local cap rate (to try to beat it). My 2c.