Help analyzing a potential flip (Chicagoland Area)

[Gerardo Dominguez]

Hello fellow BP'ers :) I need some help analyzing a potential flip. It is currently a 2/1 but if I go through with it, I would make it a 3/2 by finishing the basement.  It's in Villa Park, IL (Dupage County).

I'm not clear on how to value the basement BR's and BA's.  Can anyone answer the questions I have below? Thanks!

1. How do I get basement BR/BA to count towards the appraisal value?
2. When I sell, can I legally advertise the basement BR/BA on my listing?

[Mark Vejnar]

Basement living areas will not count towards gross living area (GLA) regardless of what you do; however, if this type of construction is typical for your area then you should not have trouble finding comps with basement bedrooms and baths. Subterranean living areas can often receive the same square foot calculation as GLA, just on a separate line item. The appraisal will then write an explanation in the addendum. 

It's usually important that the bedrooms have full height ceilings, and they may be required to have windows. HUD and FHA will require windows above grade, but I don't have the guidelines in front of me and I forget specifics regarding basement living areas. Ask an appraiser in your network for specifics relevant to your market.