You are going to struggle with the rent-by-room strategy without an adequate number of bathrooms. 

If the garage is not built to support the weight of additional floors or is not adequately reinforced, it may not be suitable for conversion.3.

Just looking for some feedback on the deal given the current nature of the market.

Ensure that bids are received from multiple contractors and that adequate reserves are made for cost overruns.

And even if it’s a private loan from a colleague or your Aunt Edna, whether they know to ask or not, you should insist that they are protected with a clean title insured through a title company and that the property has adequate hazard and liability insurance. 

Short answer:  it is baked into the business model.Long answer:It seems you may be overly concerned on the transitory nature of apartment renters versus single family renters. 

As far as cost, check the natural gas vs electric charges in your area. 

This means always holding adequate reserves to protect yourself against project delays, extra time on the market, or cost overruns, and if you're flipping, buying with enough equity cushion up front to safely handle potential market shifts.

The building currently uses natural gas for heating and hot water.

OPTION 1: OPTION 2: When Seller Uses RE Agent & You're Using Property For a Rental When Buying Subject To & Selling to Tenant Buyer Pro: Doesn't require specialized knowledge Pro: Little competition "Adequate" cash flow - Nothing Exciting Can be little $ down You get appreciation if property goes up Can do Unlimited number Can Get Started Much Sooner Get down payment (Cash $$) back immediately Great Cash Flow No Bank Approval Needed No Maintenance or Repairs Con: Have To Have $45,000 Cash for Down Payment Con: Have To Have $15,000 Cash For Reserves (just in Case) Have To Have $15,000 Cash for Closing & Carrying Costs Due on Sale Clause Have to Get Bank Approval Must learn the technique Can only do 4 -10 properties depending on bank Competing with everyone else Requires 20% Down & other requirements If AC breaks - you fix it If roof needs replacing - you pay for it If toilet clogs - it's on you If house gets trashed - you un-trash it You take loss if property goes down in Value Tenant Can Trash The House When Seller Uses RE Agent & Using Property For a Rental When Buying Subject To & Selling to Tenant Buyer Asking Price MLS $225,000 $225,000 Balanced Owed $223,969 $223,969 RE Agent 6% $13,500 $0 No Agent Involved Seller Brings to Closing ($12,469) $0 So No fees Asking Above ARV $0 $0 Seller Walking Money $0 $0 Sometimes Walking Money If I Use ConventionalFinancing If I UseSubject To Asking Price MLS $225,000 $225,000 Amount Down - 20% $45,000 $100 (I Give $100 Down) New Loan Amount $180,000 $223,969 I Take Over Loan Title Report $600 $600 Closing Costs $1,250 $1,250 Monthly Payment $1,151 $1,225 I Take Over Existing Payment When you are new, looking for lenders & considering Fix & Flip, BRRRR, or rental, as a buyer, I’d ask the owner/seller to be one of my private lenders with creative financing.