Duplex to Triplex Conversion

5 Replies

I'm considering undertaking a duplex to triplex conversion project in Minneapolis, and looking for the best way to go about it.  Zoning isn't a problem, the street is already zoned for 4+ units.  I've heard that converting from 2 units to 3 units requires the building code to meet commercial standards.  Being that its an old building and probably doesn't even meet current residential standards, this seems like a non-starter.  

I'm looking at owner occupying, so one option I'm looking into is an Accessory Dwelling, and I'm waiting to hear back from zoning on if this would solve my problem.  But its hard to justify the renovation funds if I'm going to have to convert it back to duplex when I move out.  I don't think I'd live there for more than a couple years.

Another option would be to find a work around with the rental licensing.  Are there any options for leasing two units with one lease?  Or does the rental inspector call you on it when they see two exterior doors with a dead bolt?

Has anyone here been able to successfully (and legally) convert to a triplex?

Thanks!

I've been looking for conversion opportunities as well. I don't understand the "commercial standards" vs "residential standards" comment. As far as I'm aware, each new dwelling unit must meet present day code.

Originally posted by @Dustin S. :

I've been looking for conversion opportunities as well. I don't understand the "commercial standards" vs "residential standards" comment. As far as I'm aware, each new dwelling unit must meet present day code.

 A 2 unit building is subject to the residential building code, but a 3 unit building is subject to the commercial building code.  In many old buildings, many of the features don't meet present day code.  That's where I think I'll run into most of my problems. For example, the commercial code requires fire and sound rated walls between units.  This will be an expensive process, especially if its required between the existing two units.

@Tony Otis

@Dustin S.

PM/touch base with me and I'll give you a run down

https://www.biggerpockets.com/forums/701/topics/496380-tips-on-rezoning-duplex-to-triplex-in-minneapolis?highlight_post=3049111&page=1#p3049111

If I understand the limitations correctly, you can sell to an owner occupant in the future without having to convert it back to a duplex...of course that limits your buyer pool.

@Tony Otis   I feel like you were going down the correct path to start, and that is you really need to analyze the opportunity costs on your money.  For example, if you will need to use up $40,000 cash to do this conversion how much will that get you in cash flow?  Conversely, if you use that $40K as a partial down payment how much cash flow would that generate?  This analysis is less important if you can finance most or all of the conversion costs, if you can't you must determine if this is the best use of your money.  

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