Church Rehab Yes or No?

[Kyle Davis]

Hey BP members!  I'm looking at a deal and need to know if anybody has done something similar to it, and if so, if it was a bust or a financial windfall.

I'm currently looking at purchasing a church building with a nice addition to it.  The church isn't terribly old (1950's) and the addition was built in the 1980's.  There is enough room to build 9 Two-Bed/1 Bath apartments out of it.  It would need to be totally gutted and a new roof put on half the building.  I would also need to figure out if it would be best to try and separate the heating and cooling of the place so that the tenants pay for it (higher cost to build that out) or just do one central heating and cooling system (less cost to build).

My other concern is management of these types of buildings.  I live in the next town over from this property, so I'm not terribly far away so I can self-manage (I already own and manage 22 other rental units).  But how much crap am I getting myself into with this?  There would be two main entrances into the building, and the tenant would have to walk to their apartment from there (so no exterior door to each individual unit).  But I don't know what all to expect.  I'm assuming the cost to demo and rehab the building to where it needs to be is around 350k.  I can probably rent out each room for $500 a month once completed.

Let me know your thoughts!