Splitting utilities in a single-family home in Chicago

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Splitting utilities in a single-family home in Chicago

Alex Buscaglia
Chicago, IL · Member since 2016 · 10 posts · 2 votes

Hey Everyone,

I've been looking to get involved in duplexes in Chicago for the past few months.  After putting my first offer down last week and being passed up because of too low of a down payment, I've started to look in other directions (at least until the beginning of the new year when hopefully the pickings won't be so slim).

Single-family homes have started to look enticing, but the problem is, with the price of them and the price you could rent at, the numbers don't make sense.  They would, however, make sense if it were a duplex.  That being said, does anyone have any experience splitting utilities (electric and gas) in Chicago? Is it a pain or relatively simple? I know that zoning and the ability to make it a two-unit comes into play, but if that wasn't an issue, what kind of numbers am I looking at? And if not in Chicago, does anyone have any experience with doing this in general? Things to watch out for?

Thanks in advance!

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  • Brie SchmidtBusiness Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
    9y

    @Alex Buscaglia - It is near impossible to upzone in Chicago.  Most alderman will downzone you no problem but I have never heard of an investor getting them to upzone a property.  

    Considering the price of SFH vs already established 2-4 units this is not a play I would ever make. To properly split up electrical and gas you are probably going to need to do a gut rehab, as most of our walls are plaster without conduit. So my guess would be $40k at a minimum

    Understand that our winter market sucks, so don't get discouraged.  I work with 2-4 unit buyers on the north side and I have been going on 1 showing a month because inventory is so low.  It usually picks back up in spring.  

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  • Alex Buscaglia
    OP
    Chicago, IL · Member since 2016 · 10 posts · 2 votes
    9y

    Thanks @Brie Schmidt for the insight! That will definitely change some of the properties I have down to see. And thanks for the reassurance about the market. I knew it was going to be slow, but I also thought there would be some good deals due to timing and people not wanting to pay for properties through the winter if they could help it.

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  • Brie SchmidtBusiness Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
    9y

    @Alex Buscaglia - it depends on the year, usually the winters are like this, where I get 5-10 listings a week and maybe see a property or two a month.  Last winter I had 5 clients go under contract in late December / early January but this year is not looking to be one of those years

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  • Jeff Burdick
    Investor · Chicago, IL · Member since 2016 · 515 posts · 247 votes
    9y
    Originally posted by @Brie Schmidt:

    @Alex Buscaglia - It is near impossible to upzone in Chicago.  Most alderman will downzone you no problem but I have never heard of an investor getting them to upzone a property.  

    Considering the price of SFH vs already established 2-4 units this is not a play I would ever make. To properly split up electrical and gas you are probably going to need to do a gut rehab, as most of our walls are plaster without conduit. So my guess would be $40k at a minimum

    Understand that our winter market sucks, so don't get discouraged.  I work with 2-4 unit buyers on the north side and I have been going on 1 showing a month because inventory is so low.  It usually picks back up in spring.  

    I agree with everything Brie said. Splitting a SFH into a multi-family does not seem like it would it would be beneficial. From the zoning change to the logistics of splitting utilities and floor plans, it just seems like a nightmare. Very often SFH is already highest and best use, too...so you'd actually be decreasing the value of your property.

    To the OP, be patient with finding a property and be willing to think outside the box and look for areas where you can add value.  

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