Potential first time BRRRR Advice

[Mick Saavedra]

Hey guys, I have a bit of a story here so bear with me: so last summer me and my brother were surprised by my grandmother who decided to buy us a house- all cash- as a gift. Now for years now I'd been looking to find a way into real estate investing and I instantly saw this as a unique opportunity to utilize the BRRRR method.

However, there's a bit of a snag to this- while technically the house is under our name, my grandmother has expressed the desire that, for now, she wishes to collect all the rental income. While there's nothing in the contract that stipulates this, we agreed to do so based on our good faith. However, I began to look into other ways I could potentially make money with this property. Due to the unique layout of the home, and the fact that it has two principal doors on either side, I decided to convert the garage and wall off part of the family room in order to create an "in-law" suite with full/partial amenities (kitchenette, bathroom, etc) that could be rented out.

My grandmother has given her blessing for the project and I'm hoping to pocket some rental income from this, but the obvious question remains: once I do the ReFi and mortgage the home, I would be taking monthly losses as my rental income wouldn't be enough to cover the mortgage. Yes, hopefully I'd get the bank loan and potentially buy a new home cash, but unless I manage to convince my grandmother to perhaps give us a bit more of her rental income, I'd be taking the monthly loss. Would such an idea be worth it, or what are some things you all would advise? Thank you!