Flipper/Rehabber · Sammamish, WA · Member since 2016 · 57 posts · 14 votes
Does anyone operate a duplex out of what is realistically a single family residence?
I purchased a house in Federal Way, Washington that has an upstairs kitchen and a downstairs kitchen, separate entries... I'd like to lock the door in between upstairs and downstairs and rent out the downstairs unit and main floor unit separately to 2 separate tenants.
The house is not zoned as multifamily, it's zoned one SFR per 7200 of lot space and I'm 9000 something.
Do you think I will run into trouble with City or County? Is there any specific terms I should put into the lease?
Electrical, plumbing, and heating are not split between upstairs and downstairs, though downstairs has in-wall cadet heaters. So there will have to be some friendliness/cooperation between the tenants upstairs and downstairs.
What about refinancing? Will it be more difficult to refinance with my 2 tenants and 2 leases vs if I had the whole house rented out to one tenant?
Flipper/Rehabber · Alpharetta, GA · Member since 2018 · 70 posts · 10 votes
7y
@Jeremy Benezra I wondered the same thing but for GA. Many homes there have finished basement with kitchens and baths. First thing I thought about was mail. Would you just have one tenant get a P.O. Box as part of the lease requirement. And electric could get tricky lots of ins and outs of doing this but maybe someone here has made it happen and has some advice.
Flipper/Rehabber · Sammamish, WA · Member since 2016 · 57 posts · 14 votes
7y
I was thinking I could put a second mailbox up and have there be an 1234 A and a 1234 B. The required PO box is a decent idea, as then there wouldn't be any obvious outside markings that its a duplex.
I think electricity is straightforward. 99% of the time there is nothing to deal with. If a circuit trips though, unit A will have to contact unit B and ask them to flip the breaker back. But what if the tenant in unit B isn't home at that time?
Utility bills will have to be split. Should the split be 50-50, or should it be 3 bedrooms up to 2 bedrooms down so its 60-40, or based on number of occupants in each unit (if upstairs is a 4 person family and downstairs is a single person, should the utility bill split be 80-20)...?
Rockaway, NJ · Member since 2016 · 2k+ posts · 2k+ votes
7y
Running a duplex out of a SFH is also called an illegal duplex. Can you do it? Sure. Many people do it and the odds of getting caught at usually slim. But, fi something happens, all the cards will come down. I used to rent somewhere where the basement was an illegal third unit in a legal duplex. Small fire in the basement and FD was called. They immediately realized it was an illegal unit and threatened over $10k in fines. Only reason the owner got a warning was because he was good friends with some people that were very high up in the fire and police depts. Now imagine if someone died down there...how much do you think your insurance will protect you when they find out someone died because you let them live in an illegal unit?
I was thinking I could put a second mailbox up and have there be an 1234 A and a 1234 B. The required PO box is a decent idea, as then there wouldn't be any obvious outside markings that its a duplex.
I think electricity is straightforward. 99% of the time there is nothing to deal with. If a circuit trips though, unit A will have to contact unit B and ask them to flip the breaker back. But what if the tenant in unit B isn't home at that time?
Utility bills will have to be split. Should the split be 50-50, or should it be 3 bedrooms up to 2 bedrooms down so its 60-40, or based on number of occupants in each unit (if upstairs is a 4 person family and downstairs is a single person, should the utility bill split be 80-20)...?
I bought a duplex way back at auction, with an illegal basement rental built, by whom I don't know as I got it at auction. It's an area zoned for 2 families. Then I decided to put mailboxes in, put 2 out front. But because I got so much junk mail, put a larger one in, instead of two, and now we got three.
Then some nosy neighbor decided to complain about an illegal unit down the street. City inspector went there, no one was home, so he was walking down the street, saw my 3 mailboxes, decided I must be renting an illegal unit. Rang our doorbell, wife showed him the basement unit. It wasn't rented out, I use it as an office, with the rest of the basement unit storing junk we couldn't find a place to put away.
Long story short, there's no CO for the unit, prior owners had no permit for the work. So I got an expeditor, filed the necessary plans and permits, cost me $6,000 and got the mess straightened out. Initially they want us to rip the whole unit out down to the bare walls, then file plans for an office costing me over $25K.
It all started with the extra mailbox. I noticed there's plenty of illegal units around, and owners DO NOT install mailboxes, but have mail slots on the door, and have tenants sort out the mail themselves. From my experience, having 3 mailboxes in a 2 family zone is yelling, "hey look, there's 3 rental units here".
BTW, in NYC, they don't bother to go around looking for violations. But in neighboring Nassau county, inspectors go around looking for trouble, issue citations because the town needs the money. A friend had cut a hole in the wall to install an AC because his wife wanted to be able to open and close the windows. Then one year, he got a citation in the mail for not getting a permit for opening up the wall, and back taxes due for having a thru the wall AC unit. Hard to believe they send inspectors around looking for things like that.
Rental Property Investor · Vancouver, WA · Member since 2016 · 22 posts · 3 votes
7y
@Jeremy Benezra
Hey Jeremy I’m doing the same exact thing. I purchased a sfr in October 2018 and am remodeling both upstairs and downstairs. Funny thing is I’m in federal way too. Let me know if you want my contact info. I can send you pics and maybe we could exchange ideas haha
Investor · Columbus, OH · Member since 2015 · 625 posts · 601 votes
7y
@Jeremy Benezra Why dont you call the city and go over logistics? You don't even need to give them an address. You can even be calling for a "friend". Might be less hassle than you think just doing it legally through the city.
Does anyone operate a duplex out of what is realistically a single family residence?
I purchased a house in Federal Way, Washington that has an upstairs kitchen and a downstairs kitchen, separate entries... I'd like to lock the door in between upstairs and downstairs and rent out the downstairs unit and main floor unit separately to 2 separate tenants.
The house is not zoned as multifamily, it's zoned one SFR per 7200 of lot space and I'm 9000 something.
Do you think I will run into trouble with City or County? Is there any specific terms I should put into the lease?
Electrical, plumbing, and heating are not split between upstairs and downstairs, though downstairs has in-wall cadet heaters. So there will have to be some friendliness/cooperation between the tenants upstairs and downstairs.
What about refinancing? Will it be more difficult to refinance with my 2 tenants and 2 leases vs if I had the whole house rented out to one tenant?
Thanks for your insight!
As others pointed out, there is legal and liability risk if you rent them illegally.
One way to deal with this would be to rent by the room, so it is one unit and everyone is renting a room. Avoid separate mailboxes, which would indicate separate properties.
Because, if your house-hacking, and say you live on site and rent out the basement, or upper part of the house, etc. How would you do it? You still have the same issues, with the mail, utilities, etc. Or just house hack with known individuals that are okay with it and won't call attention to themselves? I mean, not everyone who house hacked, was thinking on going down to city hall and getting permits to have a 'legal' duplex, or split. I would assume, treat it like roommates living in the house?
Flipper/Rehabber · Sammamish, WA · Member since 2016 · 57 posts · 14 votes
7y
Trying to figure it out with City.
@Joe Splitrock I spoke with my insurance agent and they said they have a product that will cover it as long as there are separate outside entrances.
@Matt M. The split would be written into the lease. People do RUBS on large buildings. Why can't I do the same on a duplex?
@Elizabeth Najera I think if it was a househack, many of the rules don't apply as it's owner-occupied. I don't plan on doing this as a househack though. I would rent it out to 2 separate parties I don't know and I would not live there.
Specialist · Easton, PA · Member since 2018 · 1k+ posts · 2k+ votes
7y
@Jeremy Benezra
Not sure what a RUB is, but...
If you have 2 units, say 2 adults each. One couple takes long showers, the other not, one couple uses the oven and dryer frequently, the others not, etc etc. A 50/50 split would never be fair. I personally would never enter into something like that or put that on my tenants.
Flipper/Rehabber · Sammamish, WA · Member since 2016 · 57 posts · 14 votes
7y
@Matt M. RUBS is Ratio Utility Billing System. Lots of articles on BP about it. Pretty common in multifamily situations where every unit is not individually metered.