Hello All,I currently own a 1 Family Home in Queens NY and I'm interested in converting it to a two family home.

currently HELOC rate is at 3.00%, down from 3.99% a month ago when the 6 month initial lock ended (i have over 9 years left on my draw period). now the rate is variable. the bank is hinting that the rate on the mortgage will be around 3.5% fixed. i don't qualify for traditional mortgage on my dti (but i do double my income with overtime and bonuses, and my wife will have a new income as well once we relocate) so our family friend is cosigning on the mortgage with me. the bank is writing it internally at 15yr with a choice between amortized or balloon. the building will need a new roof in about 5 years, and leaving $35k in the HELOC for that would keep me happy, so i'm willing to go up to $100k down payment if it makes sense. that would change my loan to $179k from $223,200, but also would tap any funds i might have for improving the property other than the roof, like fencing in the backyard and converting the third floor to its own unit. the new rubber roof would be more like $20-$25k but i like to be conservative. i have heard of people using their heloc to pay down their mortgage principal, which i could also do, but it seems to be a gimmick, and even if not may it be easier to just get a smaller loan amount to start?

It would be converting income that doesn't pay any payroll taxes, into income that does pay payroll taxes. 

Meaning the title company would eliminate the lien from title, and instead your client would pay for a surety bond or post the equivalent cash which could eventually pay off the lien if it is found to be valid.

I eventually rented it out 100% since.

Even if you can eventually raise the rents $100 a month that’s like $19,000 more a year.

I already converted out one gas heat property to electric so the only gas bill we have across over 40 properties is for cooking stoves and domestic hot water for one seven unit building.

I don't think that the extra room could be converted to a bedroom.My goals are long term cash flow to replace W2.  

Do they support the value you need to spend the money to convert it to a duplex?  

At that point, I want to refinance and take advantage of the low rates (hopefully still low), as well as start the clock on my last year at that house so I can move and get another primary residence loan in 2023 and keep the low rate as I convert it into a rental(estimated rent $1200, mortgage payment $700).