I am in the process of buying a new construction two family home with an unfinished basement that can be turned into a third unit. I am wondering how others have gone about this. The building is zoned for multifamily properties up to four units.
- Ball park cost estimate for ~1,000 square foot space? Insulation, windows, and framing are up, just needs drywall, doors, kitchen & bath fixtures.
- Is it possible to take out a loan after the mortgage for construction?
- Is it possible to roll that construction into the mortgage?
- Is it better to do this right away or to wait?
- Is this harder than I am imagining it? Anything to look out for?
Any guidance would be much appreciated!
Purchasing Multifamily Home – looking to add another unit.
byu/beta_vulgaris inRealEstate
Posted by beta_vulgaris
1 Comment
You didn’t say what jurisdiction you’re in. Depending on state, and sometimes city, living space below ground level can’t be considered “finished” and you can’t rent it as an apartment. In other places, it’s fine as long as there are at least 2 ways to egress (stairs/door, or those small windows barely above ground level if they open might count)
Anyway, it depends
Yes, you are allowed to borrow money for construction. If you want to know if you can get a SECOND mortgage for construction, that’s unlikely, most banks these days don’t want to be in second position for any reason (some exceptions). You can get a HELOC though, and use the money for whatever you want. You can take out a personal loan, or put up some other collateral. Or you could refinance your entire house (cash-out refinance).