Has anyone developed their own residential property?

Question

Has anyone re-developed their primary home? I go back and forth with taking the lot we have and developing it from a single family dwelling into a duplex or triplex. Would I have a better chance of financial approval since I already have the property? Any helpful information is greatly appreciated =)

Mike Wood · Answer

Account Closed Start first with zoning.  Zoning changes over time, so just because it used to be allowed does not mean it would be allowed now. If you zoning allows it, then figure out if it makes sense.

Mike Wood · Answer

Account Closed I assume your talking about a renovation that would covert your single family into a multifamily.  If your talking about tear down and rebuild, that's likely impossible with mortgages.

First you need to verify that the local zoning will allow multifamily on your lot.  Many neighborhoods that are primarily single family homes will not allow multifamily.  If its allowed, you would have to figure out how to do this conversation, which may require an architect or design professional.

In almost every case, a single family house is worth more than a multifamily house on a ft2 basis, so keep in mind that you are likely going to destroy value with such a conversion.  I cant image that such a conversion makes sense (except for converting an unused basement to a separate apartment like on the east coast), and it would likely make much more sense to sell the existing SFH and buy a multifamily house.

Account Closed · Answer

@Mike Wood Thank you for the information. That is very helpful. My neighborhood is a mix of SFH and multifamily. I do have a shed in the back that is nowhere near livable however now that you mention converting an unused basement apartment, perhaps converting my large shed into a separate apartment is more realistic. Thank you again!

Account Closed · Answer

Thank you @Michael P. We have a 1st and 2nd on the house.

Bob B. · Answer

Why not send them a letter stating that you have a new PM and let the new PM take it from there.

I would also do a visit.

Sean Walton · Answer

I agree with @Mike Wood you need to make sure your zoning allows it. Just because there is multifamily next door doesn't mean you are zoned for it. I'm not sure about Daly City but a lot of bay area cities are making it easier to do Accessory Dwelling Units (ADUs) aka Granny Flats aka In-law units. These usually let you get a permit easier and don't have additional parking requirements.

A new law took effect in January to try and lower costs of these

http://www.mercurynews.com/2016/09/27/california-e...

Michael P. · Answer

Then no, I think your current lender would be very unhappy if you tore that structure down.  The structure is what is currently securing your first and second mortgages.  I guess you could build an addition and accomplish your goals however it sounds as though you are already heavily leveraged as it is.

Michael P. · Answer

Do you own the land outright?  If so, then yes, the bank would view that as a good amount of collateral, assuming your land is very valuable. They might loan you the full 100% build costs to construct the new building if you put the land up as collateral.

Go chat with some local small banks and see what they have to say.