2 unit rehab
Looking for advice on how best to proceed with a two unit renovation. In Feb I purchased two stand alone duplexes - one in good shape and occupied, the other in need of extensive rehab ($150k or so). I do not have the rehab money, and finally feel in decent financial shape, and so am reluctant to go into high interest debt to rehab.
Do I just sit on it and save up the money? Get a construction loan? I could get about $2500/month income for the two rehabbed units.
Most Popular Reply
You've got three levers: timeline, cash flow during rehab, and total carry cost. If the occupied duplex pays the bills, I'd avoid pausing everything; either phase the heavy rehab by systems with a tight scope and contractor draws, or use a rehab/bridge product that funds purchase plus most of the reno with interest‑only during construction, then refi on stabilized rents. If you hate high‑rate debt, price a bank rehab line where you front small tranches on a card, get reimbursed by draws, and rinse monthly so you never raise the full budget at once. Only green‑light if projected post‑reno rent comfortably covers taxes, insurance, PM, vacancy, CapEx, and debt. Next step: get two contractor bids by line item and a PM's rent letter; if the pro forma still works, price a rehab loan vs phased cash plan and pick the lower total carry.