HI I purchased a home in a multi unit (R4), high density zone.I am currently renting the house cash flow is just $50 after mortgage payment.This house has a big workshop in the back with a high rise ceiling, brand new roof, electricity and water.It sets in a half an acre lot so I am able to rent the workshop and land for $700 a month Total cash flow on this property is $750 a monthI'd like to enclosed this workshop (it has 3 brick walls already built) and make it into a livable place.I can still rent the land and keep the cash flow at about the same amount ($700).However there's no sewer  at this house just 2 septic tanks attached to the main house.Workshop will need:windowsanother walldoorscooling and heating systemBathroom etc...I can build build more units attached to the current workshop since there's so much land to play with but i have no idea of the cost.I purchased this home for $150k in 2016I owe 143Klast month I paid for an appraisal and the current value is at $185(flooring was the only improvement at the house).Question is should I refinance and bring in sewer line, build more units or live it the way it is?

An example I see is with the kitchen faucet - seems to make sense to spend an extra $50 to get a larger high end faucet?

There are areas where you can be 0.10 of a mile from a "comp" but because of the street names and areas your home value drops by 50%.  

And that's great because a lot of the local governments of the littler cities are really responsive.In Bedford (25 minutes from downton CLE), the city charges a minimum of $50 a month per unit.

Anyways I told him I am not interested in the offer he came back with and would like to test the waters with him for a 50/50 jv deal where he doesn't have any fees. 

I hope this is not interpreted as a solisitation I know that is against the rules but I do have a question on my primary residence.I have had problems in the past securing loans because of my lack of W-2 income.  

Every state has rules regarding payment of properties sold at auction.  

For instance if you are looking at homes in memphis TN or in Birmingham AL or Cleveland OH and you are paying 50-70k for a home then investors are going to be looking for 20-25% C/C returns, due to higher risks which i wont get into here.

If you are able to get a loan, I would bet your leverage would only be 50-60%, so you are looking at 150k -250k. net of fees.

We will share the down payment 50/50, and split any profits or costs in the same manner.