SFH zoning but set up as Triplex? (Philadelphia)

Member since 2021 · 8 posts · 2 votes

I have a deal 400k, previously was approved for 3 family but city converted the zoning to SFH on whole block.

I'm thinking to submit an offer this weekend. I'm so nervous

The number is very lucrative. 3300sq ft+ in a B+ neighborhood

1 3bd & 2 2bd estimate 3700+ rent

monthly mortgage $2814, owner occupied, minus 10% (repair & maintenance & vacancy) I would still cash flow over $500 & 1k+ when I move out

My main concern is the legality of renting out... renting by room? will the home insurance cover if something goes wrong since this is not a legal multifamily?

there seems to be many advertised as multifamily but do not have the zoning & permit in Philly.

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Kevin MoyerBusiness Member

Property Manager · Philadelphia, PA · Member since 2019 · 269 posts · 301 votes

Quote from @Wz Michael:

I have a deal 400k, previously was approved for 3 family but city converted the zoning to SFH on whole block.

I'm thinking to submit an offer this weekend. I'm so nervous

The number is very lucrative. 3300sq ft+ in a B+ neighborhood

1 3bd & 2 2bd estimate 3700+ rent

monthly mortgage $2814, owner occupied, minus 10% (repair & maintenance & vacancy) I would still cash flow over $500 & 1k+ when I move out

My main concern is the legality of renting out... renting by room? will the home insurance cover if something goes wrong since this is not a legal multifamily?

there seems to be many advertised as multifamily but do not have the zoning & permit in Philly.

There’s a reason the return is so high: risk. You are one phone call to L&I away from getting an order to vacate notice on the door. I’ve personally seen it happen.

There are special rules for triplexes in Philly relating to egress, sprinkler systems, lighting, fire alarms, fire breaks, and more. You could be looking at a huge bill to become compliant and a fight that could take years.

Or you could quietly make a great return for years like 95% of illegal multi-families throughout the city…

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Kevin MoyerBusiness Member
Property Manager · Philadelphia, PA · Member since 2019 · 269 posts · 301 votes
4y
Quote from @Wz Michael:

I have a deal 400k, previously was approved for 3 family but city converted the zoning to SFH on whole block.

I'm thinking to submit an offer this weekend. I'm so nervous

The number is very lucrative. 3300sq ft+ in a B+ neighborhood

1 3bd & 2 2bd estimate 3700+ rent

monthly mortgage $2814, owner occupied, minus 10% (repair & maintenance & vacancy) I would still cash flow over $500 & 1k+ when I move out

My main concern is the legality of renting out... renting by room? will the home insurance cover if something goes wrong since this is not a legal multifamily?

there seems to be many advertised as multifamily but do not have the zoning & permit in Philly.

There’s a reason the return is so high: risk. You are one phone call to L&I away from getting an order to vacate notice on the door. I’ve personally seen it happen.

There are special rules for triplexes in Philly relating to egress, sprinkler systems, lighting, fire alarms, fire breaks, and more. You could be looking at a huge bill to become compliant and a fight that could take years.

Or you could quietly make a great return for years like 95% of illegal multi-families throughout the city…
Otter Property Management4.8628 Reviews
Website View Page
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Eric Greenberg
Investor · Philadelphia, PA · Member since 2019 · 618 posts · 430 votes
4y
Quote from @Wz Michael:

I have a deal 400k, previously was approved for 3 family but city converted the zoning to SFH on whole block.

What does this mean exactly? This was a RM-1 or something similar and was rezoned years ago as RSA-5? Is there a variance? Any rental licenses showing 3 units?
1 Reply
Michael Plante
Deland, FL · Member since 2017 · 2k+ posts · 1k+ votes
4y
Quote from @Wz Michael:

I have a deal 400k, previously was approved for 3 family but city converted the zoning to SFH on whole block.

I'm thinking to submit an offer this weekend. I'm so nervous

The number is very lucrative. 3300sq ft+ in a B+ neighborhood

1 3bd & 2 2bd estimate 3700+ rent

monthly mortgage $2814, owner occupied, minus 10% (repair & maintenance & vacancy) I would still cash flow over $500 & 1k+ when I move out

My main concern is the legality of renting out... renting by room? will the home insurance cover if something goes wrong since this is not a legal multifamily?

there seems to be many advertised as multifamily but do not have the zoning & permit in Philly.

Put the offer in with a 30 day due diligence contingency

during that time talk to the city/county about the 3 units
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Wz Michael
OP
Member since 2021 · 8 posts · 2 votes
4y
Quote from @Eric Greenberg:

Quote from @Wz Michael:

I have a deal 400k, previously was approved for 3 family but city converted the zoning to SFH on whole block.

What does this mean exactly? This was a RM-1 or something similar and was rezoned years ago as RSA-5? Is there a variance? Any rental licenses showing 3 units?

this is a rsa-3 zoning. I did see there was permit back in 2011. (seems like it was granted) my agent called a zoning guy confirmed this is currently a sfh zoning and variance will be chance but hard to get.
I'm passing this deal since I don't want to get sued or not able to evict the tenant in the future but it really seems like most of the triplex in philly are illegal use....
do the other investors just not care about the zoning...?
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Eric Greenberg
Investor · Philadelphia, PA · Member since 2019 · 618 posts · 430 votes
4y
LThere is a lot of work done in Philly without permits and rentals without the correct licenses or zoning. Id also guess your definition of ‘investor’ may not be congruent with some of the folks who own these properties. From my experience people play fast and loose unless you are in an area where neighbors will call L&I on you.
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Dan Powers
Real Estate Agent · Philadelphia, PA · Member since 2020 · 294 posts · 245 votes
4y
For anything in Philly always refer to the Philly Atlas https://atlas.phila.gov. From my experience, it very much depends on the area for investors' tolerance or lack thereof regarding zoning. The nicer the area the more strict the neighborhood will be and a higher chance of L&I gets called, but as @Kevin Moyer says there are a ton of illegal multi-familys throughout the city. If your looking for a multis in the city I would simply look for properties with RM1 zoning and have the lot dimension to support additional unit so you won't run into any problems with zoning.
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