I just bought a duplex in land contract with no money down as a buy and hold. Just found out that the conversion was done without any permits. The electrical and hvac were not separated. The previous owner included utilities in the rent to account for this.The conversion was done over 20 years ago. It has been rented and used as a duplex for the whole time. It has great cash flow! Should I keep it this way it is or should I try to make this a legit duplex?
I vote for legit every time. What would it cost to make it right? If it is nominal, I would do it without hesitation. Call the building inspector and ask questions about the scope of work. Do not give out the address until you are sure you actually want to do through with it.
It is always easier to sell a property that has been done to code with permits showing inspections. Good luck!
Some cities will not let a sfh be converted and that may be why it was not permitted.
There is a city near me that even a permitted converted 2 family house gets canceled out if it goes without being licensed as a two family for more than one year. Lots of foreclosures don't pass this test even if it used to be totally legit.
First thing to check is zoning. Cant turn a SFH in R-1 into a 2 fam, can ya?
it really depends on whether you can "grandfather" the duplex into current zoning. Sometimes you can get an exception from city. If city will allow duplex, then you would have to bring conversion to current building code. Would require inspection by the city building dept. If the city will not allow, then just leave it and when you go to sell you will probably have to carry the loan, as an appraiser from a conventional loan source would require rebuild letter from city.
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