I’m looking to access some of the equity in the home to buy out my ex-partner, and my goal is to either convert the house into a multifamily property or add a dwelling unit (ADU).I’d love to hear any advice from the community on the best way to approach this, particularly in terms of financing options, legal considerations, or any similar projects you've completed.

I would restate that the lease will remain in place until such time that a new tenant is selected and moves into the property.This approach will ensure your cash flow while acknowledging that 'stuff happens.' 

Being 3 units, the valuation will come from comps not from cap rate/ income based approach.

Does this approach seem reasonable, or am I undervaluing the property?

If so, how did you approach it initially?

I remember spending entire weekends crunching numbers, gathering receipts from random shoeboxes and backtracking through countless transactions in my bank account.

Focusing on smaller multifamily properties needing light rehab is a smart approach for learning the ropes.

This approach could keep things straightforward while accommodating their need for housing.

A business partner approached me about it, and I negotiated the deal based on CAP rate.

Let me know if you need help refining your approach!