Convert SFR to Duplex?

Question

I just made my first real estate investment purchase....just dipping the big toe. At any rate, it is in a suburb but more of an urban-type suburb. It is a 2-3bed and 2 full bath single family. But! It is zoned for a multiple family and at one time was a duplex. I know I can get about $1500/mo for a single family and I can get about $1700+ for a duplex. I just am not sure in the area what is more desirable. There are a lot more 1b/1b units for rent than 3 beds but I don't know what make of that information. Also, since this is my first property maybe I should "keep it simple stupid." I am working with a partner who has experience with flips and could be a great asset in the process of a conversion to a duplex. BP community, what do you all think? Thanks in advance for any insights!

-Susie

Marcus Auerbach · Answer

I call those one and a half plexes. A full conversion is expensive, not only you need an aditional kitchen, you also need asecond HVAC, water heater, plumbing and electrical system. This is prohibitivley expensive.

Small units tend to rent more transitional, meaning more turn over and vacancies. Turnover is your single biggest expense! A conversion makes no sense, rent it as a SF, no question!

Susie Ivanov · Answer

@Andrew Postell Thank you so much for the questions to expand my mind! This is really what I should be asking myself, thank you!

Andrew Postell · Answer

@Susie Ivanov thanks for posting.  Now the answer here is going to be very market specific.  Meaning, what do your "comps" show?  How many duplexes are there?  Do they support the value you need to spend the money to convert it to a duplex?  If there aren't any duplexes around....or if the ones that are around are so far away and in a less desirable neighborhood...then it may not make sense.  Run those comps.  The numbers will show you the answer.  Hope all of that makes sense.