Converting a 4 unit to a 6 unit - Pros vs Cons
Hey All!
We recently acquired a small multi currently recognized as a "Legal 4 unit" by the city. This unit is separately metered and has 6 units with 6 entrances and 6 paying tenants.
We are wanting to get it recognized as a "legal 6" to increase its value in the eyes of the lender. What are the Pros vs. Cons of doing this? I'm sure taxes will increase, but I don't want to open a can of worms on other issues.
Ultimately, we want to rehab the building and use the additional units to pump the value for a long-term loan.
Thoughts???
#4 Multi-Family and Apartment Investing Contributor
- Cincinnati, OH
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#4 Multi-Family and Apartment Investing Contributor
- Cincinnati, OH
My initial thought is, while I do generally assume having 6 units is more valuable than 4, you are pushing the property out of owner-occupied lending and into commercial.
I don't know that this would effect any current mortgage you have on the property, but a buyer, specifically, someone looking to house-hack or utilize as primary, would have a few more hoops to jump through.
