Estimating ARV in a Value Added Deal

[Ted Klein]

I am considering some duplex properties where I could add value by converting 2 car garages into a 1bd. 1ba. apt. I am in the process of figuring expenses to determine the conversion costs but am having a hard time determining the ARV.

Provided that the property was purchased at or below a FMV as the comps, would the ARV be figured by just taking the comps, per sq. ft. values and then calculating the added sq. footage to the purchased property value?

Would the added sq. footage increase the overall value on a 1:1 ratio?

I am really unsure how this would be figured and want to be sure that I get it right as the pre-conversion cash flow has a thin margin where as after conversion it would cash flow quite nicely.

If anyone has used this strategy I'd appreciate learning about how this worked out for you and what challenges you may have encountered in the process.

Any help the community could provide me in working through this would be greatly appreciated