Transform 3-unit "Residential" to 5-unit "Commercial"
I'm looking at purchasing a triplex with a private lender. Using the BRRR strategy, I plan to refinance within a year to get cash back out. I am planning to build out two more units on the property (already half-built).
Should I leave the two "new" units incomplete until after I refinance so that I can use a conventional loan, or should I go ahead and build them out to make the property commercial (5-units) and increase the property value?
Either way, I will definitely build out the two units eventually, and there is space to add 5 more as well.
I already have an LLC, if that makes any difference.
Thanks a lot for your input!
Most Popular Reply
I'd say it depends on the strength of the cash flows from the property and how much equity you will have at the time of refinancing. I could connect you with a couple of bank lenders that might be able to answer some questions for you, if you are interested. Let me know.