Hello BP !
I have been searching for a deal for more then two years in my town , located in Westchester county , NY. Real State can be very expensive around this areas, that being said , I found a deal that works for me as I will be House hacking. THE PROPERTY: I purchase a 4 family house , that has a detached two car garage. I obtain the property with a FHA loan. The house was 395K with 15k seller concession for the closing cost, 4% interest Rate. With my wife and I living in one of the apartment's we break around even, which is great because if we were to rent in our town we probably pay about $1200 for a one bedroom apartment.
MY PLAN/QUESTION? What I want to do is convert my 2 car garage that is around 600sq into a tiny home/apartment for my wife and I. I ran the numbers it will cost me around 20K with materials and help from plumber and electrician, I will be doing most of the work my self and family , since we have construction background. This way I rent out the 4th unit , which will bring me extra cash flow.
ANY ADVICE IS WELCOME! PLEASE AND THAK YOU!
ALSO! Will converting the Garage , affect or change my FHA loan , since the property will become a 5th unit property, making it commercial , since FHA loan is cap at 4units. OR SHOULD I build it without permits / I know that not notifying the town is not to smart, but since my plan is to hold the property for its cash flow? WOULD THAT BE A SMART IDEA?
Congrats on the purchase.... Why not just rent the garages out to a contractor or electrician in town that needs some storage space? Would save you time, money, and the hassle of getting a CO etc... and increase your income
Congratds @Eder Aldana ! I agree with @John B.
I think you also may find a greater ROI with renting the garages than the time, materials and government approval you will need to make it another unit.
Hi Eder. Congrats on the purchase and it sounds like a great deal! I would really caution against adding a unit because usually the city is very strict with unapproved living dwellings. Also if anything were to happen, insurance will definitely not cover anything if this was done without letting them know. Cashflow is nice but so is sleeping at night!
THANK you all for the feed back , The address the question of why i haven't consider renting the garage over , because i have to live in the property and i would like to live in the potential garage studio unit my self, which will increase the cash flow .
If you do build out the garage, do it right and get permits. It won't be fun if you finish and the city demands to inspect your work that is behind freshly painted walls and poured concrete.
Congrats @Eder Aldana !
I would tread super carefully here. If I were to choose between the two, I'd probably go the route of pulling the permits, just because they can make you gut the entire project if they catch you working without them.
I am an architect whom lives and practices out of Westchester County. I do not think you could legally create a "tiny house" from the garage. Currently the garage is classified as an accessory structure and not habitable. You would be converting this to a 2nd building/home on the same lot (unless home spans more than one lot). Zoning, setback requirements and a list of other things would have to be reviewed. Let me know if you need help @Eder Aldana