Adding a bedroom and bath to a rehab

[Roland Brown]

When looking for deals I am seeing a lot of homes that are quite small on large lots. These homes are 2 bed/1 bath and 3 bed/ 1 bath, built in the late 50s and 60s. As a general rule is it a good idea/ bad idea to build onto the home an additional bedroom and bathroom? I just don't think the 2 bed/1 bath or the 3 bed/ 1 baths sell very quick.

[Manolo D.]

In SoCal, it makes much sense, turning a 2/1 into a 3/2 is quite common. There is a 100-150k difference in price between selling a 2/1 into a 3/2, IF you spend 70-100k on an addition (hard and soft costs), may it be up or extension, there's the 30-50k upside.