2, 4 Plex Conversion to 1, 8 unit
What's up BP Nation.
I'll jump right into it...
I recently closed on 2, 4 plexes that are on adjacent lots. I purchased them for right around $265k in two separate transactions (i.e. $132.5k each). They are currently generating an NOI of $3,250 per month, collectively, which puts the year at around $39,000. If I assume a 10 cap, this property is collectively worth $390,000.
Assuming my math is good, I bought into $125k of equity. However, the two properties are currently two separate and distinct properties making them each a 1-4 unit subject to comparable sales valuation.
I would like to know if anyone has had any experience/success with repurposing (if that's the right word to use) a property to take it from 1-4 unit to 5+ units? The goal here would be to get NOI valuation from a lender and do a cash out refinance of 75% or roughly $292,000.
If I could do this, I could recoup my $80,000 cash position in the property and rinse and repeat with the next.
Any thoughts, experiences or help would be much appreciated.
Thanks,
Jason G. Valenzuela
"Will work for freedom."