DC Rowhouse-to-Condo Conversion Deal Math 2026

A Washington DC rowhouse-to-condo conversion is four products in one deal: bridge acquisition, renovation, regulatory subdivision, and retail sell-out (or DSCR hold on unsold units). This post walks through complete deal math on a worked Capitol Hill file — the companion to condo conversion financing Washington DC.

The asset: 4-unit Capitol Hill rowhouse

Location: Capitol Hill — historic district, HP review required on front facade
Configuration: 4 units (2 per floor), vacant at acquisition
Basis: Estate sale, dated systems, cosmetic-plus-structural scope

Input	Value
Purchase price	$1,048,000
Acquisition friction (recordation ~2.2%)	~$23,000
Close timeline	12 days (hard money)

Vacant acquisition avoids TOPA — saves 60–120 days vs occupied file. If upper tenant existed, add $5K counsel + 90 days minimum.

Rehab and conversion scope

Line item	Cost
Electrical panel + rewiring (4 units)	$68,000
Plumbing (kitchens/baths, 4 units)	$92,000
HVAC (4 mini-split systems)	$44,000
Kitchens and baths (mid-spec)	$96,000
Common area + facade (HP-compliant)	$38,000
Subtotal rehab	$338,000

Conversion costs	Cost
DC conversion fee	$11,200
Survey + plat	$8,500
Condo documents + legal	$22,000
HP submission + review	$9,800
Subtotal conversion	$51,500

Total project cost: $1,437,500 (purchase + friction + rehab + conversion)

Financing structure

Layer	Amount	Terms
Bridge / hard money	$1,412,000 (100% LTC)	10.75% IO · 18-month term
Sponsor equity	$0 on qualified 100% file	Reserves for carry + friction
Interest carry (16 months)	~$165,000	IO on average outstanding balance
Extension contingency	$8,500 fee	Month 17 if sell-out slips

Draw schedule tied to DOB milestones — not arbitrary monthly releases.

Sell-out pro forma

Unit	Size	Target price	Buyer profile
Unit 1 (ground front)	780 sf 1BR	$495,000	Owner-occupant
Unit 2 (ground rear)	720 sf 1BR	$475,000	Investor / DSCR
Unit 3 (upper front)	850 sf 2BR	$525,000	Owner-occupant
Unit 4 (upper rear)	800 sf 2BR	$510,000	Owner-occupant

Gross sell-out: $2,005,000

Profit waterfall

Line item	Amount
Gross sell-out	$2,005,000
Less: loan payoff	($1,412,000)
Less: interest carry	($165,000)
Less: selling costs (5.5%)	($110,275)
Less: recordation on 4 sales (~1.1% avg)	($22,055)
Less: sponsor equity returned	($0)
Net profit	~$557,670
ROI on reserves	Carry funded from liquidity reserve on 100% file

Margin compresses if one unit sells 90 days late — carry adds ~$10K/month on outstanding bridge balance.

Alternative exit: hybrid sell + DSCR hold

Sell Units 1 and 3 (owner-occupant premium): $1,020,000
Pay down bridge to ~$130,000
DSCR hold Units 2 and 4 at $1,950/mo each:

Metric	Value
Gross rent (2 units)	$3,900/mo
Combined value	~$985,000
DSCR refi (85% LTV rate-and-term)	$837,250 @ 6.75%
DSCR ratio	1.03

Hybrid exit trades immediate profit for recurring cash flow — common when sell-out market softens mid-project.

Sensitivity table

Variable	Base case	Downside	Upside
Sell-out price/unit	$500K avg	$460K avg	$530K avg
Hold period	16 months	20 months	14 months
Rehab overrun	$0	+$45K	-$20K (value eng.)
Net profit	$558K	$383K	$698K

Comparison: conversion vs flip vs hold

Strategy	This deal outcome	Product
Condo conversion sell-out	$558K profit on 100% LTC file	Bridge DC
Single-family flip (if legal)	Not applicable — 4-unit	N/A
BRRRR hold all 4 as rentals	$3,900/mo gross	DSCR DC
New construction pop-up	Different asset	Construction loan

Timeline Gantt (simplified)

Month	Milestone
0	Close acquisition
1–2	Permits submitted (HP + DOB)
3–8	Rehab draws
9–10	Conversion docs + fee payment
11	First unit listed
11–16	Unit closings (staggered)
16	Bridge retired

Related resources

• Condo conversion financing DC
• Row home financing DC
• TOPA compliance guide
• Columbia Heights case study
• DC office-to-residential wave

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