Finishing basement to increase ARV

[Lior Golan]

Hello,

I just purchased a property in 76K that has an unfinished basement. I checked with the comps and got into conclusion that my ARV would be 115-120K.

The property is 3 beds 1 bath, if I will finish the basement, and even maybe add another bedrooms and bathroom, do you think the value of the property will be higher (for the refinance)?

I know that finished basement has like 70% ROI, but as BRRRR is for long-term holding, maybe the extra bed will eventually add me for the rent I will charge.

But because we are using BRRRR, it's also important to increase the ARV as much as we can in order to regain the most capital as we can from the property.

What would you do instead of me? Finish the basement? Add even extra bed and bath? or just live it like that?

Thanks

[Brendan Lawrence]

Hey Lior,

cool project you're working on. as you've stated the roi on a finished basement is low or even negative. but an extra bathroom and if possible a legal bedroom might change that. depending on the setup, i would put them in this order, an extra bath will have the highest return, then the bedroom and finally finishing off the rest of the space. 

if possible consider just the bathroom, and then "finish off" the rest of the space as either storage or a laundry room. nothing fancy. if the value is there and you can make a legal bedroom, also include that in your math. however past those two rooms i don't see the value in finishing the rest of the space. basic lighting, or a laundry setup is as much as i would personally invest in this extra space. 

i wish you luck