Anyone else have experience with a non-permitted duplex? Specifically, found a SFH rowhouse that has been (without permit) converted to a duplex; between the two units, the numbers are quite good (2% per month) but I'm wondering how much of a legal headache this could be. The area is zoned R-6 so from what I have read/heard, it is nearly impossible to have the rowhouse rezoned as a legal duplex.
I have friends in other geographic areas that have non-permitted units (looking at you, Chicago!) and it's never been a problem. If it makes a difference, I wouldn't be putting any debt on the building and just purchasing in cash.
@Timothy M. Look at the zoning code for Baltimore city. It is online. See what conditions are needed for R-6 to be a 2 unit. It may be possible.
I actually posted something like this previously in Bigger Pockets. I bought an identical houses, in Baltimore city, not rented, set up for 2 units. I pulled permits, started the rehab, and at the first inspection got a stop order due to the 2 units. It was not permitted and vacant for a period of time. It was at one time...two units. I had to go through Zoning and had an experienced person that deals with Zoning handle it all and was not able to get the zoning to do 2 units. It was a while ago, and had something to do with the size of the property and the total size of the lot. Definitely call Baltimore City zoning office and tell them the address and they can share with you the current situation or viability of getting 2 units.
If I am not mistaken, per R-6 (or maybe it is R-7) zoning regulations, one can have one unit per every 750 sq ft lot. If your lot is more than 1500 sq ft, you can have 2 units. If it is more than 2250 sq ft, you can have 3 units.
Personally I wouldn't touch it. It could be a huge headache for you if the city decides they won't issue construction permits (now or in the future), rental permits, etc. Not to mention it will be harder to sell when the time comes (you may not be using debt to purchase, but your buyer likely will).
I've been through the conversion process (albeit in the County, not the City) and it was a headache but worth it in the end. I suggest hiring a lawyer who is experienced with this process if you do go forward.
All the above posts bring up great points. Its extremely important to perform due diligence on every property you intend to buy BEFORE you close. I have walked away on deals where things that were discovered a couple days before closing did not sit well with me. Sometimes the best deals are the ones you don't do!