Converting SFR to MfR

4 Replies

What's good BP?! I'm here today with an idea for my market. I've heard similar things before but never in my market. I'm located in Southwest Michigan. I'm thinking of buying larger 3 be, and converting them into duplexs, and/or buying larger 2 bds and converting them into 3bds or 3 units. Any advice? This is my first investment in real estate. I've been studying for over 2 years now, while working on fixing credit. I recently at the beginning of this month was approved for 130k. in my market it works but I plan on finding great deals.

Carl.

This sounds like a great plan but it might be a little much for your first deal. 

Have you thought about starting off with flips and then moving up to projects like this where you are going to have to tear down walls, etc? 

The flips will be much simpler and you will not have to deal with the city and getting a variance, etc. 

@Antoine Martel yea I have and would definitely consider it. My realtor also things I should "crawl, walk, and then run" I guess he's right haha. So what about this? he sent me a property, seller asking 70k. it needs cosmetics, approx.. 5 -10k. he says use the fha, get into that fix it up and move after 6months or so if I want. that way I would build relations with the bank and be in better positions for another loan. I just thought I'd always want to do something a little more than cosmetics for a bigger return, I'm just not sure how much wiggle room I have for that price in my market.

I don't think that you could move out of an FHA financed property that quickly. Also when converting SFR to MFR be very aware of zoning, if the property is not zoned for multifamily properties it may very well be illegal to convert SFRs.

If you intend to do conversions you need to first confirm with your local building inspector that it is permitted. If so you can purchase a property, file a building permit application and then hope it will actually receive approval.

Complicated process that must be done in small steps. 

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