Build a garage or save my cash?

[Derrick Lubomski]

Hey BP members, I'm in sort of a predicament that could use some outside input. 

I'm closing on my first duplex for me to house hack in two weeks and can't decide if it'l be worth it for me to build a detached garage or not. I have a ton of tools in storage that I need to move in; welder, air compressor, wood working tools etc. It has a large basement I can put everything in, however rebuilding and flipping motorcycles and cars on the side is a hobby of mine, which I can't really do in a basement.

Now I only plan on living in this duplex for 2 years at most before I refi out of the fha loan. In the meantime I'm going to pursue more rentals using the brrr technique and hard money lending. 

For the predicament...

I see the garage as potential for extra income, I'd put a divider in it so I can keep one side for myself and rent the other out for around $125 a month. When running roi though I'm treating it as if I were renting both units out for 11 out of 12 months at $125 a side. The investment is paid off in year 3 then after that its nothing but straight cash money on top of raising my property value. Typically this would be a great investment, but I'm only 25 and trying to work towards financial freedom, so would my limited cash be spent better towards my next rental? As I stated I intend on using hard money to acquire more rentals, which the lender I have been talking with will lend 85% of purchase cost and 100% of rehab cost up to 70% of ARV. So I'll still need 15% of purchase cost and interested up front.

Typing this out it's starting to come more clear what I think I should do, but what are all of your opinions?

Thanks!

Derrick

[Jim K.]

@Derrick Lubomski

Come on, Derrick, "just outside City of Pittsburgh limits" means that it's in one of approximately 30 independent municipalities. Are you seriously expecting that coy descriptor is going to get you a useful answer? If you're thinking about doing this in Homestead, McKees Rocks, Wilkinsburg, heck no. Fill a garage up with tools in the evening and wake up to it stripped bare in the morning.  Somebody's gonna pay $125 to rent a garage slot anywhere in West Mifflin? I doubt it. Now if this is Fox Chapel, Millvale, parts of Mt. Lebanon, Castle Shannon, you've got a chance.

You're going to need to talk to code enforcement in one of those 30 municipalities to pull your permits, and that means you're going to need plans. You get your buddies together with some beer and start pouring concrete for the kind of big shop/garage you're talking about, maybe digging a trench through your backyard to bury a 16-gauge extension cord spliced into your duplex's panel, oh Mama, you're going to be in for a very ugly surprise.