Condo conversion or Rental income

[Jesse S.]

First let me start by apologizing for not searching before posting.

I have a test tomorrow on Cloud engineering and didn’t have time to search... yet I am here posting.

My question is based on what it cost to buy multi families in dc (est. $1 million before renovations. Is it a better option to purchase renovate and rent of overhaul and offload individually.

From initial calculations condo conversions are about 25% more (please correct me if I am wrong I really have no clue). But does the higher initial investment pay off in the long run?

The long run being selling to make 500k and investing that into a 16 unit building.

I’m curious to your thoughts/rationale and I am also curious as to what you deal acceptable contracting cost in the dc (northeast area).

Before you say “it varies”, let’s break it down like this:

Section 8:

Mid level rental:

High end rental:

Condo conversion:

Any information will be much appreciated.

P.S. I promise I will send my convoluted spreadsheet out to those who asked right after I finish this exam. Please feel free to send it back to me with your comments or corrections.

[Greg Dickerson]

Originally posted by @Jesse S.:

First let me start by apologizing for not searching before posting.

I have a test tomorrow on Cloud engineering and didn’t have time to search... yet I am here posting.

My question is based on what it cost to buy multi families in dc (est. $1 million before renovations. Is it a better option to purchase renovate and rent of overhaul and offload individually.

From initial calculations condo conversions are about 25% more (please correct me if I am wrong I really have no clue). But does the higher initial investment pay off in the long run?

The long run being selling to make 500k and investing that into a 16 unit building.

I’m curious to your thoughts/rationale and I am also curious as to what you deal acceptable contracting cost in the dc (northeast area).

Before you say “it varies”, let’s break it down like this:

Section 8:

Mid level rental:

High end rental:

Condo conversion:

Any information will be much appreciated.

P.S. I promise I will send my convoluted spreadsheet out to those who asked right after I finish this exam. Please feel free to send it back to me with your comments or corrections.

This is going too be an individual decision. Every investor has different goals. You need to decide what your strategy will be for the near and long term then run the numbers to determine the exit. There are tax benefits to long term holds and tax consequences to short term flips as well so you need to take into account your entire financial picture.

For me I am a developer. My strategy for 23 years has been build and sell or renovate and sell and this has served me well. I am a landlord of cash and operate from the standpoint of compounding cash, time value and velocity of cash vs cashflow.