It'd be great to see what li dog ROI the extra 3rd story yields.

And 1 extra to hold security deposits.

The buyer would have to pay the extra 10k.

I'm an educator from NYC with a family in tow looking to produce a little extra income (alright, ...maybe a lot extra) during my off time, and I've been browsing around the forums and blogs.

And the city may allow you to split it "in house" without having to take it through the full subdivision planning rigamarole since it will only be 1 extra lot.  

Banks generally will take 70% of gross rents and compare that to his loan payment.. so if 70% of gross rents was $1050, and his payment was only $500, it counts as extra income on the debt ratio...

Plus, you get a little extra cash out of it after the REFI that you can use to expand the portfolio in a slower fashion or enjoy with your family for now.

Even if deferred payments are an option, make sure to have extra funds to cover any unexpected costs or delays in the project that result in more/longer holding costs (deferred payment may not covered, as mentioned earlier).

I pay the same rate as and owner occupant, just have to pay the extra $250 fee.As for you other comment, that was not my experience.

I have owned a few duplexes and have recently sold two, now I have cash burning a hole in my pocket!