I'm currently working through a BRRRR deal, and as part of my process have been reading articles, books etc. In @David Greene BRRRR book he discusses the impact adding square footage to increase ARV.
While this would almost certainly increase ARV, it would also be a somewhat expensive and time consuming move. I gather the key to it is probably creativity and finding properties which lend themselves to simple means of creating more space.
I am wondering if anyone can share some stories where they have added SQF and had it help them with their BRRRR deal (or flip etc)? Does anyone have any stories involving this going wrong?
Things that are prime candidates for this are generally in more expensive neighborhoods and often start as 2 bedrooms. Other good candidates are properties with current crappy Arizona rooms that are permitted but look terrible, and making them nicer, they aren't always added to public records correctly. Another great tactic if you've been around the block enough is there are sometimes certain floorplans that get recorded incorrectly and thus a home is bigger than it looks on paper.
Thanks @Aaron K. I can see creating additional bedrooms as a win for sure.
Additional bedrooms seems like a good way to go. Depending on the number of bathrooms you may consider adding a 2nd. If there are 4 or 5 bedrooms and 1 bathroom that could be a problem for some families. It will cost a pretty penny to add on unless you have a contractor just do the framing while you finish the rest.
Also you will have to draw up plans and submit them for the city approval. Depending on the city it can be a huge pain and don't expect you to be approved then breaking ground in a month. It takes time. When my dad had his garage built we had to keep revising things because the city kept changing things. It took almost 6 months before we could break ground. The other part was all the permits being pulled and approved. Was it worth it for him? Yes it absolutely was.
Good points @Brent Paul the time and complication with permits etc is certainly an issue. It seems like it has to be just the right property where there’s an easy way to do it ie the Arizona room suggestion.