Transform 3-unit "Residential" to 5-unit "Commercial"

[Adam Bradley]

I'm looking at purchasing a triplex with a private lender. Using the BRRR strategy, I plan to refinance within a year to get cash back out. I am planning to build out two more units on the property (already half-built).

Should I leave the two "new" units incomplete until after I refinance so that I can use a conventional loan, or should I go ahead and build them out to make the property commercial (5-units) and increase the property value?

Either way, I will definitely build out the two units eventually, and there is space to add 5 more as well.

I already have an LLC, if that makes any difference.

Thanks a lot for your input!

[Bryan Mills]

I'd say it depends on the strength of the cash flows from the property and how much equity you will have at the time of refinancing. I could connect you with a couple of bank lenders that might be able to answer some questions for you, if you are interested. Let me know.