Updated about 3 years ago on . Most recent reply
Unique SFH to Duplex Conversion - Worth it?
I am currently looking at purchasing a SFH with the intention of turning it into a top/bottom duplex and here's why:
1. I have already talked to the city and they are fully on board and are excited to see more housing going up. (Although I would want everything in writing in terms of zoning, etc. before I sign the deal)
2. The house is somewhat set up already for a duplex in terms of multiple entrances, etc. but will require an additional kitchen, fire protection, etc.
3. There is a potential to turn one of the outbuildings into a studio apartment, thus turning the duplex into a triplex property.
4. Current SFH rental rates in the area are 1200 - 1400 and typical unit rates are 800 - 900. So if I got all 3 units built and completed it would be roughly 2500 per month versus the 1200 to 1400
5. I have a lot of connections in the construction industry right now looking for work, (whom I trust) so we could flip this fairly quickly.
My question is, when doing the rental analysis report I did 50k in rehab costs and granted it is an older home, but does that seem sufficient for "running the numbers"? Or should I be more at the 100k mark?
If anyone has any other advice or comments please let me know.
Thanks!