Considering using a Heloc to split my current SFU into a duplex
I have 150k in my Heloc.
I am considering three investment options before me as I look at:
A. Putting 20k in upgrades to get my current home "rental ready". No permits required.
I would then rent out my current 3/2 home to a long term renter. My current mortgage is $2,500 and I can rent the home for $3,000.
Cash flowing at $500 ( minus maintenance fees.... So maybe not much cash flow )
Then...
Putting a down payment of $120k on a multi family property about 90 min away... and living in one of the units. Total Mortgage would be $3,300 but I could rent out the other unit for $1800. ( My portion would be $1,500 plus utilities).
This option feels like something that could be done relatively quickly. But not cash flow as much. Still I would be saving on what I currently pay with my mortgage.
Or.... Option B...
B. Using a portion of the HELOC to convert my SFU into a duplex and rent both units out and get instant cash flow. I figure I could split it practicaly in half... and clear about $4,300 in totally rent. I just need to block/add two doors... add a small kitchen, separate the HVAC and update the electrical. I'm hoping to keep this under 30k. Is that unrealistic? Lol. Permits are required but my city is ADU friendly and mandates a less than 60 day approval process.
My current mortgage for my 3/2 (1,900 SQ ft) is $2,500. Rents for a 2 bedroom 1 bath home in my area go for about $2,500 a month. The one bed/one bath could get at least $1,500. Maybe 1,800. It's 900 sq ft.
This gives me about $1,800 in cash flow - minus maintenance fees.
I would use the remaining $120k of my HELOC to put a down payment on the multi family property near me and live in one of the units. paying $1500 plus utilities after rent collected.
Or... Option C.
Use the HELOC money to buy a multi family unit outright...out of state.
No mortgage just the HELOC payment until it gets paid back.
Ok wise investors... What say you?
Thank you so much for your opinions and advice :)