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.
Jason G. Valenzuela
"Will work for freedom."
I think you should check for zoning regulations to start with and see if you have any limitations within your property boundaries to keep you from making changes. Set back codes, square footage. parking regulations,
If you can add on to the building and increase sq footage and units, a new calculator and good contractor is next in line.
It's same format if you wanted to add an addition to your home. Design, plan, and check out zoning and permit regulations.
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