Keep as Single Family or convert to Duplex

[Sam Morgan]

Hi All!

I'm under contract on a single family with an upstairs 2bed/1bath living space. A separate entrance downstairs has another 2bed/1bath living space with no internal connection between the living spaces. It appears no permits were ever pulled for the downstairs. Both will need significant updates and I'll have to pull permits to get downstairs legal. Is it better to leave as an SFR to diversify my portfolio and realize better appreciation, or convert to a duplex for better cash flow? Can I have both if I leave as single family, but rent out both units somehow? This is in NC.

Thanks for any and all replies!