If the project only cashflows with interest only payments, that isn't a deal to me. there are going to be other costs involved such a cap ex and maintenance, so you will need to bake in a certain amount of expenses beyond jsut the mortgage payment too.

You may have 112K in equity, but you should also account for closing costs when you sell the property.

(looks expensive though)I also have a solid connection with a contractor who does fast work at his labor costs if I buy and source the materials.

As far as pricing out a build I would put a call out to a home builder in your area and chat with them about average cost per sq ft to build in your area to give yourself an idea.

The cost of entry is low, and cash flow is high.

When you work in partnership with the city you can see if they have economic grants, TIFs, etc. to help offset the remodel costs to both the commercial space and the residential.

But Generally, most lenders will want to see that the lease or market rent can support the mortgage payment, the borrower does not intent to live in the property, the borrower has 20% down + closing costs, 6 months reserves, and credit is above 620. 

It doesn't cost anything extra, laws may be different where you are.

- we have a separate business bank account that we could receive payments from - we have tracked all renovation costs and expenses, though they were done personally and not through the business

- we have a separate business bank account that we could receive payments from - we have tracked all renovation costs and expenses, though they were done personally and not through the business