All Forum Posts by: Account Closed

 Yeah, that is a good move with that, the 203K loan is a higher interest rate loan due to the lender charging more for it so I would look at refi before you move out. Just a thought, might help that cashflow 

 Awesome! Well best of luck my man!

 So, $200-$300 after you move out? Is that what you are saying? That is not too bad especially if you are buying now at a discount and living for a year. Is there anything on the property that you can fix up to force appreciate to get higher rent when you move out (laundry in unit or something else). Thoughts for sure would be to even get an extra $100 here or $75.00 there 

Depends on your situation and if you can’t find any better deals that work for your living situation. Many investors think it’s a bad deal if it doesn’t cash flow or make sense right away, which isn’t always the case. If you can add value, and you see higher rents and appreciation in the near future, it can be a home run down the line 

I look at it in two ways. 

1) Will house hacking with the duplex reduce your current monthly spend on rent? If yes, then I would go for it. If no, when you factor in principal reduction, are you doing better than monthy rent? If yes, I would consider it still if you are able to meet your other financial obligations.

2) Can you get a better return on your investment today for $200-$300 per month with the same amount of risk? Real estate is just one of many ways to diversify your funds.

Just some simple questions to get you thinking and moving in the right direction.

 Assuming it’s zoned for a duplex, the regulations for a duplex and adu are extremely similar if not the the same, usually an adu is just a legal duplex that is only allowed by owner occupants where a duplex can be used regardless of if it’s a primary residence. But that’s more of a zoning issue than a construction one.

Adding an ADU is substantially easier than a multifamily coversion. In each case zoning must allow it, but zoning on ADUs is available in many more locations than a multifamily conversion. The process for ADU is also substantially quicker. However, your total value is higher with multifamily.

@Account Closed - looking at it from a cash-out refinance standpoint, you will be more limited in the equity you can tap into if you convert it into a 2-unit (75% Loan to value) than if you keep it as a 1 unit (80% Loan to value). Also, the interest rate pricing on 2-units tend to be less favorable than on 1-unit properties. 

It all depends on the cost of one or the other. 

You would need to determine how much would it cost to fully turn it into a duplex and also go through the permitting needed. It takes a long time in DC but if you live in it as you start the process could be doable. 

Make sure to check basement ceilings and the feasibility of adding egress windows in basement. 

Check how much duplexes have sold to calculate what yours could sold for if you were to sell it today and based on that you should be closer to the answer you look for. Another option that can give you good info is to check the comps for sold basement units in case you only sell the basement in the future and keep the top or viceversa.