BRRR - Abandoned 5 Plex to Cashflow

6 Replies

Hello I have an accepted contract on a 5plex / 6K Sq ft 25 Room 15 Bed  MF that has been abandoned and reclassified as illegal non conforming.  In order to bring this back into conformance the property will require 10 off street parking spaces which do not exist on the property and be brought fully up to code with sprinklers and fire alarm systems.   I am looking into other nearby lots to see what is available but wondered if anyone has experience with this sort of dilemma and whether its worth the effort.  The property is relatively cheap 75k + 30 - 40k for parking, needs almost total interior rehab, good bones, roof, siding, windows in good shape.     I'm budgeting $50.00 a sq  (300k) to renovate the interior: plumbing, electric, 5 kitchens, 5 baths 5 new hvac systems.  When fixed will rent at roughly 5500 - 6K a month.  Is that budget realistic in Massachusetts?  Any advice when going to zoning board, when does it make sense to hire a lawyer?  Any and all thoughts appreciated. 

@David Casey not sure how things are where you are, but if properties aren't already zoned for something here or grandfathered in, I typically recommend that clients stay away from them. To me, it's always easier to make the city happy because you've created what they wanted. These cities here are pretty strict though. 

Thanks Kristina, good advice, this property was built in the 1800’s was always used as a 5 Family but during the crash in 2008 went into disrepair and the town now legally considers it vacant land. The town desperately needs housing but they have a parking issue and therefore require 2 spots per unit within 800 ft of house. I figured if my math is right with renovation costs and I can find a nearby vacant lot it may be worth the effort but your general advice is there are easier ways of doing this and the juice may not be worth the squeeze?

Read through the local zoning by-law and see if there are any provisions to waive required parking spots through the Board of Appeals process. I would consult with a local attorney sooner rather than later. Find someone who has been through the board of appeals process in your town and can help guide you through the process. If you can't get a good understanding of what you are reading in the by-law then go to the Building Department and ask them for help in regards to the parking situation, that's what they are there for.

Why hasn't someone already done this and left it abandoned? Assuming it's on the market or public I'd assume there's a reason...

Or would it be easier to down size it to save on the parking spots? If you're doing a remodel already maybe that's the perfect time...

Hi Matt, the current owner bought it w/o doing the right due diligence and was shutdown. They run the risk of losing the property to demolition. They spent money partially gutting the house w/o permits. House is too big to easily downsize as it’s almost 6000 sq ft so as a 2 or 3 family rental it would be massive. Is 50 a sq a reasonable rehab est for kitchens, baths all systems, electrical, plumbing, plaster, paint? Lifting house and putting parking underneath is an option but assume that would be very costly.