Help me decide whether to add a bedroom/Bathroom, 1200 sq ft!

[Janelle Hicks]

This is my second brrrr, assuming it works out. I bought this house for 84k "cash"- personal loan.The problem is ARV, I've gotten different realtor opinions, but prices in my area have shot up in the last 2 years due to oil/gas, and prices are all over the place. It doesn't help that this house is a rare 2/1. There just aren't many comps. But i think the ARV will be between 120 and 150k, and I've already spent about 10k on roof replacement, soon will be spending another 5k to tile floors, refinish hardwoods, and paint. There is also the option of turning the dining room into a bedroom/office, and still leave a little nook for a dinette area. Then could add a half bath to the laundry room...Making the house a 3/1.5. It's a slightly weird layout to have the bathroom in the laundry room but there really wasn't any other good options. The additional cost will be about $8k, plus the additional cost of an extra month of lost income (rent will be about 2k, maybe 3k if I do an airbnb with it) and expenses (the personal loan payment is $900/month). So additional expenses to make it a 3/2 add up to about 11-12k. ARV as a 3/2 I think is more like 160k, and there more comps for those. That said, the market here is HOT and I will have no problem getting it rented as just a 2/1, and it likely won't change the rent price or cashflow that significantly- maybe an extra 200 a month. Basically, is adding a bedroom and bathroom as mostly a play for the BRRRR refinance aspect worth it? It feels more risky to me, and right now when I feel like I'm just hemorrhaging money into this house, I'm really leaning towards just getting it painted and floors done and start making money, as opposed to starting what feels like a major project with less of an obvious payoff (and I won't know if it pays off until 6 months from now when I can refi). Please help me decide what to do.