Building a 5 unit building in my back yard
Hey Everyone!
Let me just start by admitting that my whole day revolves around BP, whether it's reading the forums, or listening to the amazing podcasts driving from place to place. Very excited about this first post and looking forward to hearing your feedback.
I just bough my first investment: A duplex, completely remodeled in 2007, with existing tenants on an 11 month lease. I'm house hacking at the moment and will pull some great cash flow out of the deal once I move out. The house is right across from the train station in a town called Cary, IL, and the 6 houses on either side of me are all multi-family with long term tenants and very low vacancy. The house is also a 5 minute drive from my job so a huge win there.
Now, I'm not sure how common this is but, being that the lot is a narrow half acre all of my neighbors have separate 4-5 unit apartment buildings in their back yard. After speaking with some of their tenants (most of whom have lived in those units for 8-10 years) they are all 2 BR units at $850-$900 a month. The idea of doing the same has me really excited for the possibilities, but I really have no idea what such a venture might cost. I have a line on the capital I would need for the project through a private investor so that's reassuring.
When I came to look at the property the seller informed me that he had drawings made, presented them to the village, and after a couple attempts they told him they wouldn't let him go through with the project since they plan for that strip of buildings to "go commercial" in the near future. The land is currently zoned multi-family. I will be investigating this further on my own of course.
Here are some pictures, one of an overhead view of the open part of my lot highlighted in green & the neighbors "backyard buildings" circled in red, two others of my neighbors houses where you can see their 4-5 unit buildings in the back yard (also circled in red):
- Can anyone give me a brief overview of what this type of project would look like in terms of time and capital?
-If you were facing this type of resistance from the village/county what avenues would you consider?
-Would it make more sense to put a couple 500-700 sqft "small" or "manufactured" houses back there instead?
-Would you just take your cash flow from the deal, be happy, and buy more multi-family housing elsewhere?
Thanks in advance!!
-Michael