Should I convert a SFH to duplex?

11 Replies

I’m getting ready to work on a SFH that’s 1195 sft. It’s practically a total gut job, so my question is, does anyone have opinions on flipping the SFH for resale or splitting it for a rental hold? Conservative numbers: Purchase: 50k SF flip: 80k ARV: 165k Duplex flip: 100k ARV: not sure Rental: $600/unit

Well did you mean 100k pp and arv 165k for duplex,think you have it backwards. Without knowing your repair costs I can't say for sure. Gv my opinion off of hypothetical numbers. Your first numbers 50k arv of 80k. That is tight numbers for a flip..lets say your repairs are small 10k that is 60 plus your costs, taxes dnt know how you are financing plus that costs too if using lender. Leaves little take home cash. That case a rental would be better. As far as the duplex same thing plus costs to convert Into duplex which isn't that much anyway. Your arv numbers is that the low end or the high end and what are the days on the market. I have so many friends mess that up they say 100k but dom is 6 months etc , where as the lower end is 70k but 60 Dom. Seems like common sense lol. They bank on the higher comps and lost most of time until I showed them.

In my area, I have seen successful flips from 2FAMs converted to a huge SFH. Since the typical single family house in the area doesn't have the square footage, they made a killing. It was a foreclosed up & down with about 1200sq ft per unit and when converted about 2500 sq ft.

They bought for 40k and sold it after complete rehab for like $355k.

In my area, I have seen successful flips from 2FAMs converted to a huge SFH. Since the typical single family house in the area doesn't have the square footage, they made a killing. It was a foreclosed up & down with about 1200sq ft per unit and when converted about 2500 sq ft.

They bought for 40k and sold it after complete rehab for like $355k.

In my area, I have seen successful flips from 2FAMs converted to a huge SFH. Since the typical single family house in the area doesn't have the square footage, they made a killing. It was a foreclosed up & down with about 1200sq ft per unit and when converted about 2500 sq ft.

They bought for 40k and sold it after complete rehab for like $355k.

@John Webster thank you for the replies. unfortunately I wrote this from my phone and the text didn't translate well. It should've looked like

Conservative numbers: 

Purchase: 50k 

SF flip: 80k 

ARV: 165k

Duplex flip: 100k 

ARV: not sure

Rental: $600/unit

@Patrick Jung that's an amazing project! Unfortunately this one is nothing like that one. 

Typically, I like to use a five year return as my barometer for whether I flip or keep a property, which might help you decide what to do here. Will you make up your rehab costs in less than five years through cash flow as a rental? If yes, you keep it as a rental, if no, you flip. You could apply this to both scenarios that you've presented above to help you decide which is the best route to take on this property. 

I use that same formula for every improvement- rehab a kitchen or bathroom? Will I be able to raise the rent immediately enough to recoup the cost in less than five years? If yes, then I do it.

@Brian Orr I have done two sfh to duplex conversions. The question becomes "highest and best use". Does a duplex make more sense in that area on that lot? Is this a neighborhood of SFH and it would be the only multi-family? Or is it a mixed use or multi-family area anyway? In my case it significantly added to the ARV of each property.

@Vaughn Smith as it turns out, the city won’t rezone to a duplex it’s strictly SFH. But thank you all for the advice as this is something I’d look to do in the future