I’m new to BP and real estate from an investor point, but the research phase is over and I’m looking to jump into the game! We have found a number of homes that seem to have potential for great cash flow after a conversion from single family to multi family, they are in the proper zone to do so and some of them have even been converted illegally already. Is this going to be too expensive when all is said and done - I know the c of o can take a while(we are in Hudson Valley, NY), but if the numbers work is this feasible? We are planning to Brrrr, and we have the cash to float the project while we wait. What am I missing, where am I going to lose my shorts?
Not always, but if your house doesn't have the adequate ceiling heights or isn't currently zoned for multi-families it can become quite expensive.
Typically you'll need to have any architect draw up the plans to prove that you are meeting the required square footage's, dimensions, etc by code. If its not in the right zoning district often you will need to get a lawyer involved and apply for a variance. If this is the case, there are probably a few additional code requirements you'll have to comply with (which means added construction cost) so you better have an extra unit or be able to add value to the property quite a bit.
I've worked on a number of these conversions myself, let me know if you need any help going through the code.
Adding to what @Jillian R. Wiedenmayer mentioned (which is correct), you cannot sell, lease/rent or otherwise occupy the residence until the updated C of O is issued in good standing therefore getting the conversation completed can be a lengthy process (ie: = holding cost $$$). Plus the aforementioned may limit your ability to refi the property.
You mentioned they are properly zoned. Where are these properties? What does the zoning say? Most single family homes in Hudson Valley areas are zoned only for single family.. maybe 2-family but usually not as 3-family or more. @Chris Killoran
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