My wife and I just closed on a duplex in Oakland, but the basement/garage was already converted into a separate living space with a bedroom and bathroom.

After sitting vacant for a while I'm entertaining the option of converting to residential units.

If it doesn't happen often you could roll the dice and always convert back to a LTR if you had to.

Purchase price: $350,000 Cash invested: $10,000 Sale price: $435,000 Primary residence converted to a rental after 2 years.

Converted it into a 3bed 2 bath.

Converting an unfinished basement into a third unit can definitely add value, especially here in Chicago.

During the "fix up" process, you would use a different kind of loan that will end up converting to a DSCR loan once you have tenants living in the unit(s).So, I would need to use maybe a construction loan for the renovations and then convert it to a DSCR loan?

Converting OP units to shares of the REIT creates a taxable event.Ok thanks.

@Niklas Zhu If you tear down your STR in 2025 and convert it to personal use, depreciation recapture does not occur at the time of conversion.