Denver, CO · Member since 2017 · 102 posts · 48 votes
Opinions wanted! We just closed on a single family home and the property is zoned for multi-family. The house is about 800 sq feet upstairs and 800 downstairs (basement). We could easily turn the basement into a separate apartment with a separate entrance. Our intention is to flip this home after renovation because it would not cashflow heavily if we kept it. It would probably pay the mortgage but would would want it to earn income if we kept it. Anyway, my question is this: What is generally more appealing to buyers? I feel that if we turn it into a duplex the buyer pool is a lot lower.
Stick with your gut - you bought it with the intention of flipping it for a profit. Pockets of Denver are great to have a duplex set-up, but a lot these become two paired/attached homes, and that's not the current set-up for this home which leads me to believe the part of Denver this home is in may not be the best for that big of a rehab project. So if the majority of the homes on this street and surrounding streets are the same or similar, you will most likely appeal to buyers seeking out a SFH with a finished basement. Without more detail on the neighborhood, it's probably best to stick with your original plan. But just to make sure you cover all bases, seek out a highly reputable property manager that focuses on this part of town and see if the rents for the duplex idea could in fact be better than just covering the PITI. If the ROI is worth it to you, then you can re-assess. Good luck with the project!
With no numbers how can you do the analysis or expect us to? What is the ARV of a SFH and what is the ARV of a rented income property? What are the reno costs for each?
@Julie Hill I am late to the party here but another vote for leave as a SFR and flip. If you pull permits, converting to a duplex will be a night mare if you are in Denver proper. All kinds of fire code issues. You will likely have to do a complete gut remodel on both units as the City will want fire separation between the units. If you go that far, you might as well put in separate furnaces , water heaters, and new electrical so you can have a hardwired fire alarm system.
if you were going to hold it, you might turn it into a duplex for cash flow. Otherwise, the market for SFH in Denver is great, so it's probably easier to keep it simple and just rehab the property.