Possible BRRRR opportunity?

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I'm looking at a property with two buildings.

The first house is very well kept and reflects its fair market value - no substantial room for improvement there. The second, however, is a very spacious two-floor standalone building. It's basically a garage/storage area, but could be converted into a legal home/livable space.

If we were to purchase the property through a conventional loan and convert the 2nd building, is it fair to assume we could then refi at a higher property value?

@Scott Krause a couple of things to point out here - you would like need a NON-conventional loan here. Some loan type that would allow you to purchase an investment property with 2 building and then allow improvement of those buildings. Most "conventional" loans would not allow this (I'm defining "conventional" loans as loans from Fannie Mae and Freddie Mac). The loan type would likely be a short term loan that would require you to refinance out of it after the rehab is completed...essentially the BRRRRR method.

Secondly, in theory, the property should be improved and worth more....but how much more? And is "More" enough to justify the expenses? Meaning, if it improved $50k in value but took $100k to get there, is that worth it? It would be if you purchased it low enough. Whenever we use this strategy we need to know what the ARV will be....AND how to calculate rehab costs. I need to know those before I make my offer. Knowing those figures tells me what my offer should be. Oh, and the terms of my loans too.

So try posting in the state forum you are looking in to see if anyone can point you in the right direction for some of these things.  Bigger Pockets has some good state specific forums and many of these questions are best answered on a local level.  Hope all of this makes sense.  Thanks!