1st offer in on a 2/1 brick in great location with intent to flip. Offer is at 30k, will most likely land at 35k. The current rehab costs are minimal as the home is in great shape, so ~3000-4000 range. ARV should fall 65k to 70k.
I have the ability to convert another room to a 3rd Bedrm, and there will be room to add a small full bath in the new 3rd bedroom. The house has about 970sf. Would these additions bring a great enough return to spend additional funds adding them.
And the house is in Northeast Tennessee
@Andy Bailey get an estimate to do the work, then find comps both ways and you'll have your answer.
In my market, it's usually worth the cost to go from a 2/1 to a 3/2.
Thanks @Jason D. for the input. I failed to mention that I will be handling the labor myself. My only additional cost would be materials and a little more of my own time. I feel that just based on the additional bed and bath, opening the home up to more potential buyers, that the minimal cost of materials would probably be a win on the investment.
Yes I always add extra baths if I have space. Even a half bath adds about $150 extra per month in rent.
Do you own the property in your name or an LLC?
I ask because many towns/cities will not allow you to pull permits yourself if the property is not in your name.
If you can pull permits and do the work yourself, it's probably a good move
Will this house be a total of 970sqft or will additions increase the total sq footage. A 3/2 in less than 1000 sqft would have tiny rooms.
@Andy Bailey @Don Gouge I was going to ask the same thing Don was. If you are just squeezing in rooms and bathrooms but everything is tiny I would not do so. If you are adding livable square footage via a dormer or finished basement absolutely. In my market a half bath adds at least 5k of value and a full bath at least 10k especially when currently only 1. If you can do all the labor and are proficient it definitely worth it.
I was concerned also! A 3/2 @ 970 seems tiny to me.