I'm super excited to be on this forum. I'm new to Deeper Pockets and I'm loving the Podcast. Saturday I was listening to epsoide 233 with Arianne Lemire and I found my "WHY". I dropped where ever I was doing in my office and started to drive for bucks. I found a couple foreclosures and a young hungry new real estate agent that was willing to share his time with me.
On Monday I put an offer in on a duplex and yesterday I put an offer in on a quadplex. Both properties are bank owned.
My questions is for the quadplex. It's listed on the MLS as the property is no longer zoned for mulit family use and it would be illegal non conforming use if multi family is ever allowed.
With multiple visits to the planning department,utilities, calling old property mgt co, and talking with neighbors. I've found a caveat to make the unit into a duplex. I have the verbal ok from the planning department and my purchase agreement is congingent to the use of a multi family property. Time is of essence due to the caveat I found in my research.
I have until Nov 12.2017 when the mulit family status will be expired. Basically on Nov 12th that active unit will have been vacant for 6 months and the property goes back to single family use. The property had been a quadplex for more that 50 years but can be easily transfered to a duplex or I can go through with a special use permit along with being granted a variance for parking because it's on a small corner lot.
My question is that the planning department is requesting a lease to be signed by me. They said it could be 1.00 but they need an active lease. It's a bank owned property and my agent doesn't think the bank would do a lease but could the real estate co write up a quick lease for me until we close?
@Allison Jones - Provide the owner with a $1/mo month to month lease for the unit with 1 days notice of termination or something. Get a signature. Present to local officials if needed. Do what your planning department recommends to maintain the grandfathered use. They’ve already indicated that they won’t be flexible if the non conforming use officially ends. A quad turning into a duplex is a significant downgrade. Do your numbers still work? Ie there’s a base cost for a 1 br and extra br are usually marginally more money. A 1 br might rent for $700 while a 3 br rents for $1100. That could turn 2800/mo into $2200/mo to go from 4 x 1 to say 3 x 2 (you get extra kitchen space back). There’s also less risk you’re cash flow negative at any time. If I have 4 units, a min of 3 are usually rented vs if I have 2 units and only one is rented.
Thank you Kelly! Do you think the bank would write the lease or could the agent write the lease?
Two units out of the four are already out of the grandfather timeline. According to the planning dept we would only have two units to use. Gratefully there is one unit upstairs and one unit down stairs that current. Which would be easy to convert if needed. I will file a special use permit with the planning dept.
I believe the lot size is considerably smaller than allowed for four unit housing Re zoning.
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