Owner Build House Hack?

[Reagan Huefner]

Hello everyone,

I'm exploring an opportunity to convert a duplex into a quadplex and would greatly appreciate your insights or experiences in similar ventures.

Background:

• Purchased a duplex in Roosevelt, UT for $210k, invested $20k+ in renovations.
• Currently valued at ~$275k with a mortgage of $197k.
• Planning to leverage the equity for a new project in Bear Lake, facing a housing crunch.

Proposed Project:

• Partnering with my grandparents, who have $300k cash and a half-acre lot.
• Aim to build a quadplex, estimated cost: $1,000,000; ARV: $1,200,000.
• My contribution: $50k cash, project management, and labor (potential savings of $150-200k).

Financial Breakdown:

• Total initial investment: $450k ($300k from grandparents, $50k from me).
• Required loan: $450-500k for construction.
• Post-construction plan: Either buy out grandparents or rent units for 2-3 years, offering them 5-8% annual return. Here is the RENTAL REPORT based on renting 3 units out and living in one of them.

Challenges:

• Qualifying for the necessary loan.
• Ensuring a profitable return for my grandparents.

Request for Advice:

• Feasibility of the project from an investment perspective.
• Suggestions on managing the financial aspects, especially regarding the loan.
• Any similar experiences or insights would be incredibly helpful.

I'm already in discussions with lenders, accountants, and realtors who see potential in this project. Your opinions and advice would be invaluable in helping me make a well-informed decision.

Thank you!