2 flat in Avondale neighborhood Chicago
I bought my first property a few years ago with a FHA mortgage. Since then I've noticed a new construction boom in the neighborhood. A block south of my 2 flat are row homes/town homes which were sold out before construction completed, several new multi-family and SFH have also been built/being built now in the neighborhood.
I'm thinking maybe my 2 flat is a good candidate for a new SFH. Would I be able to take out a construction loan to build a new SFH with an existing loan? I'm thinking Wells Fargo wouldn't be too happy with that. I figured I would put it out here and see the response from more experienced investors.
Most Popular Reply
Since this is a numbers game, the only way you can answer the question is to do the following:
- Establish a relationship w/ a realtor winning to run some comparables for you showing the potential value if you convert from a 2 flat to a single
- If the values are not significantly hire than your mortgage then hold on to it as a 2 flat
- If the values are significantly hire than your mortgage then get some estimates for converting from a 2 flat to a single. If there's still room for some profit after the estimates then pull the trigger on a construction loan to convert the property.