Hey everyone so I am going to just be open and honest with this, I am a first time real estate investor but i am ambitious and am looking an amazing deal in my opinion. I have a 3000 sq ft home in down town on a 9000 sq ft lot that had fire damage and is now in need of a total rehab. The asking price is $58,000 right now but i believe there is a large amount of wiggle room. I would aim to get this property for around 30k. My goal with this property is to buy it and list it as my primary residence at a 30yr term therefore making my payments as low as possible to allow for repairs. It is a large how were some wealthy folks live and it is listed as 2 units due to it having a "Mother-in-Law" apartment. I think there are 2 options, either restore the home to its 2 unit form and go for the approach of live in a great house and have someone help pay their mortgage or try and turn it into a 4 or 5 unit apartment building. There is a mixture of the 2 types in the area primarily the multi unit apartments which are on average 180k to 200k. I believe i could get an easy 160k out of the home as just a single family home with attached apartment. I am in desperate need for advice since i want to get started on this asap in order to try and have it ready for spring market. Please any and all feedback is appreciated.
@Sam Phares this isn't my area of expertise but I suspect buying it as a primary will be challenging because it's fire damaged. Have you spoken to some lenders to determine the type of loan programs out there for this?
@Joe Fairless I have not but i am looking into a 203k loan to start with so i can have most of the major renovations covered.
@Sam Phares I've completed a similar project to what you've done, increasing the number of units. It can be complex, and these are the areas to start with, IMO:
1. Zoning - does your town allow for that number of units in that part of town? Is there enough off street parking?
2. Water / septic - if you're connected to the town system, you may need additional permits for adding additional units. Check with your town and state. I had to hire an "water flow" engineer to draw up plans on how much additional usage would be.
3. Loan - Joe already brought up a good point. Keep in mind too if you have 5 units, it will probably be a commercial loan.
Hope that helps and good luck!