Multifamily Properties

4 Replies

Hello everyone, I'm a novice in real estate and am looking for guidance and support through this process. Seems like this is an exciting new adventure and I am ready to learn and form new connections!  I am in the process of purchasing a duplex and using a rehab loan to make a mother in law suite in the basement. Hoping that this is a good investment strategy, especially being this is my first house.

I am planning on living in half the duplex since it's my first home and renting out the other half. I'm using an FHA 203K Rehab loan for financing and am planning on turning the basement into a mother in law suite since it has a shower already and a toilet setup (no toilet, however). Also has a tiny area where you could set up a very tiny kitchen (already has sink) and a cabinet like area. Wondering if this is a good idea!? Right now the house does not have a garage and I currently reside in MN where our winters are horrible, but I'm debating whether or not to make the basement into a mother in law suite or add a garage? I have roughly 30,000 dollars to spend to do the updates to the house, but don't think I'll have the best of both worlds with building both a two car garage and turning the basement into a mother in law suite. Any suggestions would be greatly appreciated!!!

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It really depends on what you want, income or comfort.  Would converting the basement into a mother in law suite make your house a triplex?  If so, the income could help pay for a garage.

If you are considering renting the basement I would check you city code to see if they have certain height, sqft, or other requirements for a separate unit.  Some cities are a little particular and ceiling height can be an issue especially in an older home.

Both improvements will add value to the property however only one will generate income.  If I were in your shoes, my wife would want the garage and I would want the unit...  We would probably be building a garage.

I had a similar situation in Savannah, GA where I bought a triplex which had a carriage house. I was planning on turning the garage into a unit and living there. Well, the city wasn't happy about that so they shut down the work on it and I'm stuck with a HVAC unit in my garage which doesn't get used. Just be careful. I personally would add the unit, but that's just me.

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