Atlanta Pittsburgh neighborhood

20 Replies | Atlanta, Georgia

Since Pittsburgh (neighborhood in Atlanta) is super hot right now and investors are jumping on anything they can find, here are a few things, that are not well-known. 

Until 2005 the zoning in Pittsburgh was R5 (duplex), but in 2005 that was changed to R4B (SFH) due to an effort of then council woman Cleta Winslow. BUT, the Fulton tax commissioner never updated the Pittsburgh records and thus everything still says R5, which is wrong.

So, there are a lot of duplexes in the area, which had been grandfathered in, because they became non-conforming with the zoning change.  A lot of them are boarded up now and after 12 months not used in the 'grandfathered' way, they lost the grandfathering. 

I've seen a number of boarded up duplexes advertised as duplexes in the mls, mentioning zoning of R5. The buyer of one of those then finds out that they can't get a permit to renovate a duplex, because it's lost its grandfathering. And since it's been recorded by code enforcement that the duplex has been boarded up for more than 12 months, there's no way to say that a tenant had been living in it until 6 months ago. 

In addition, there are several tracts in Pittsburgh, that were never fully subdivided. The owner (at the height of mortgage fraud) in the mid 2000's owned several larger tracts, with several properties on them. He created a subdivision map, but all of the property lines state very small: 'proposed'. The subdivision proposal never went through the city of Atlanta, so, they still see that whole property as only 1 big lot. While the lot may have 6 or 8 different properties on it, which all were individually sold to straw-buyers for 250-300K each, on 80/20 mortgages. When they all got foreclosed, they all ended up with different owners. It makes it almost impossible to get a permit, if the property has been boarded up, because it doesn't really exist, according to the city. 

It's not something I or other investors would have ever thought about checking. We're all used to finding our zoning at the tax commissioner's website. 

Similar with some of the vacant commercial spaces. They may or may not be zoned commercial. And if they had been used as commercial and then got boarded up, they may now be zoned R4b and may not be able to get renovated as commercial space. 

So, if you're planning to do any work in the Pittsburgh neighborhood, keep this in mind. 

I learned it when I bought several of those 'not subdivided' pieces. Fortunately, together with a partner, we owned 6 of the 8 on that lot and were able to figure things out for our 6, after working for 3 months with city officials. 

But then there are 2 other duplexes in that tract and one of them has been boarded up for several years. I told that owner several times some years ago, that he needed to get the duplex occupied or he'd lose his grandfathering. He didn't listen. Now he's trying to sell it for an outrageous sum, hoping to find a sucker, who doesn't know about the lost grandfathering and would never find out with normal due diligence. 

So, I put up a sign, since I now own the other 6 and his selling to someone unknown could destroy the creative community that I've built up, letting potential buyers know that they need to check with the zoning dept at City of Atlanta, to check on the possibility of ever renovating that duplex. 

The other owner is not happy, but I'm just pointing out the truth to potential buyers. 

@Michaela G. Thank you so much for the information as I am looking to get a duplex-quadplex close to the SW beltline in the next 2-3 months. So you would recommend ensuring the zoning status and grandfathering of duplexes with the zoning department at the City of Atlanta instead of using the tax commissioner website?

@paul....yes..do not rely on tax website. I don't know if it's the same in other neighborhoods, but better be safe than sorry

Thank you @Michaela G. for this information. I had this exact scenario play out on a boarded up 10 unit multi family in Bankhead. It was really cheap and i was under contract to purchase it and thought it best to walk into the city office to do some homework on planning and permitting. After finding out that it had been rezoned to R4b and realized it was going to be a long and dreadful process to fight it (with no guarantee), i backed out. Imagine a 10 unit multi-family rezoned to single family. Someone else bought it and somehow get a permit and started rehabbing but later got stuck in the process.  It is unfortunate because many buyers get burned thinking they are buying a multi-family not realizing that after 12 months the building cannot be grandfathered. The sellers know this and knowingly try to sell it cheap without disclosing the new zoning. In my case it was bank owned.

On another note, i've read many of your posts and comments on Pittsburgh in the past months and years. I really admire your initiative to go all in on Pittsburgh for so many years when many investors didn't have the guts. I'm glad you are reaping the benefits now. I bought 2 properties there last year and i'm so happy i did. Thanks for all your insight and congratulations on your success.

@Randy Lee , interesting to find out that the same zoning stuff is happening in other parts of the county. When I spoke to city and to tax office, they seemed to be almost at odds, saying that they don't care what the other shows. But, ultimately, it's the city that controls it, because they decide on who does and doesn't get permits. 

Good that you were smart to go to city and find out ahead of time. 

Wow! Now that the city knows, are they doing anything about the other two properties at all? 

Originally posted by @Kyle Jones :

Wow! Now that the city knows, are they doing anything about the other two properties at all? 

 The city can't do anything, since all owners of those full tracts would have to make an application to separate. Can't just be 1 or 2.

And even if you could get all owners onto the same page, the buildings are too close together to conform, so there'd have to be all kinds of exceptions approved by neighborhoods and other groups. 

My property, I own 6 of 8 of those duplexes and I wouldn't approve the subdivision. For one thing....in a few years I expect a developer to want to buy the whole block, as we're across the street from the Pittsburgh Yards developement and the Beltline. This way, if a great offer comes along, I'll be able to force the other 2 owners to sell via 'partition by sale'. Also, if it were subdivided  via the subdivision map, I would own the driveway, which is fine for me, but not so good for the other duplex that can only be reached via the driveway. The whole block is only accessible via that driveway, as everything it sitting very high above the surrounding streets, without possibility to create another access point. 

And since it's mostly duplexes, even subdividing would make the separate pieces still conform to R4B zoning, which would only allow SFH. So, they'd also have to be able to rezone to R5, which the neighborhood would never approve.

Originally posted by @Michaela G. :
Originally posted by @Kyle Jones:

Wow! Now that the city knows, are they doing anything about the other two properties at all? 

 The city can't do anything, since all owners of those full tracts would have to make an application to separate. Can't just be 1 or 2.

And even if you could get all owners onto the same page, the buildings are too close together to conform, so there'd have to be all kinds of exceptions approved by neighborhoods and other groups. 

My property, I own 6 of 8 of those duplexes and I wouldn't approve the subdivision. For one thing....in a few years I expect a developer to want to buy the whole block, as we're across the street from the Pittsburgh Yards developement and the Beltline. This way, if a great offer comes along, I'll be able to force the other 2 owners to sell via 'partition by sale'. Also, if it were subdivided  via the subdivision map, I would own the driveway, which is fine for me, but not so good for the other duplex that can only be reached via the driveway. The whole block is only accessible via that driveway, as everything it sitting very high above the surrounding streets, without possibility to create another access point. 

And since it's mostly duplexes, even subdividing would make the separate pieces still conform to R4B zoning, which would only allow SFH. So, they'd also have to be able to rezone to R5, which the neighborhood would never approve.

Looks like your in the captain's seat. How long do you think you'll have to hold it before selling to a developer? What do you plan to do with it until then?

Originally posted by @Kyle Jones :
Originally posted by @Michaela G.:
Originally posted by @Kyle Jones:

Wow! Now that the city knows, are they doing anything about the other two properties at all? 

 The city can't do anything, since all owners of those full tracts would have to make an application to separate. Can't just be 1 or 2.

And even if you could get all owners onto the same page, the buildings are too close together to conform, so there'd have to be all kinds of exceptions approved by neighborhoods and other groups. 

My property, I own 6 of 8 of those duplexes and I wouldn't approve the subdivision. For one thing....in a few years I expect a developer to want to buy the whole block, as we're across the street from the Pittsburgh Yards developement and the Beltline. This way, if a great offer comes along, I'll be able to force the other 2 owners to sell via 'partition by sale'. Also, if it were subdivided  via the subdivision map, I would own the driveway, which is fine for me, but not so good for the other duplex that can only be reached via the driveway. The whole block is only accessible via that driveway, as everything it sitting very high above the surrounding streets, without possibility to create another access point. 

And since it's mostly duplexes, even subdividing would make the separate pieces still conform to R4B zoning, which would only allow SFH. So, they'd also have to be able to rezone to R5, which the neighborhood would never approve.

Looks like your in the captain's seat. How long do you think you'll have to hold it before selling to a developer? What do you plan to do with it until then?

 I have a creative community on the grounds. Every tenant has to be involved in some creative field (doesn't have to be fulltime job) that they're pursuing. I get more rent than the neighborhood would normally allow, yet, it's still cheaper than other intown properties and I have tenants, who might normally not have looked in Pittsburgh, but who are in love with the concept of having other creatives all around them. It's working well

Originally posted by @Michaela G. :
Originally posted by @Kyle Jones:
Originally posted by @Michaela G.:
Originally posted by @Kyle Jones:

Wow! Now that the city knows, are they doing anything about the other two properties at all? 

 The city can't do anything, since all owners of those full tracts would have to make an application to separate. Can't just be 1 or 2.

And even if you could get all owners onto the same page, the buildings are too close together to conform, so there'd have to be all kinds of exceptions approved by neighborhoods and other groups. 

My property, I own 6 of 8 of those duplexes and I wouldn't approve the subdivision. For one thing....in a few years I expect a developer to want to buy the whole block, as we're across the street from the Pittsburgh Yards developement and the Beltline. This way, if a great offer comes along, I'll be able to force the other 2 owners to sell via 'partition by sale'. Also, if it were subdivided  via the subdivision map, I would own the driveway, which is fine for me, but not so good for the other duplex that can only be reached via the driveway. The whole block is only accessible via that driveway, as everything it sitting very high above the surrounding streets, without possibility to create another access point. 

And since it's mostly duplexes, even subdividing would make the separate pieces still conform to R4B zoning, which would only allow SFH. So, they'd also have to be able to rezone to R5, which the neighborhood would never approve.

Looks like your in the captain's seat. How long do you think you'll have to hold it before selling to a developer? What do you plan to do with it until then?

 I have a creative community on the grounds. Every tenant has to be involved in some creative field (doesn't have to be fulltime job) that they're pursuing. I get more rent than the neighborhood would normally allow, yet, it's still cheaper than other intown properties and I have tenants, who might normally not have looked in Pittsburgh, but who are in love with the concept of having other creatives all around them. It's working well

 I have never heard of such a thing. How did you organize that? Are there legal stipulations to that type of "structure"? 

@Kyle Jones , I don't know what legal stipulations there'd be. Everyone has the same criteria and I don't discriminate against any protected classes. We have a great mix of people. 

Everything was vacant when we started and so, we just set it up with that criteria. 

Originally posted by @Michaela G. :

@Kyle Jones , I don't know what legal stipulations there'd be. Everyone has the same criteria and I don't discriminate against any protected classes. We have a great mix of people. 

Everything was vacant when we started and so, we just set it up with that criteria. 

I gotcha. That's a pretty cool concept. I love ideas like that. New ways to do things in real estate are always of interest. Thanks for sharing!