Investor · Shawnee Mission, KS · Member since 2014 · 44 posts · 9 votes
We're under contract to buy a duplex on N 54th St. in Kansas City, KS. I'd call it a B- area: dead end street about 3 blocks long, mostly brick SFRs, nicely kept.
During due diligence, we found out that when the city annexed the duplex it was never zoned R2, and it looks like they're unwilling to do that now. We're waiting for the final word, but it looks like the planning department will not support spot zoning, but will recommend it be converted to a single family.
We think we had a pretty nice deal on it as a duplex. We would have put $35k - $40k in before renting it. However, we don't think it's such a good deal if we need to convert it to single family. Seems like the savings we gain by not putting in two furnaces, two sets of kitchen appliances, etc., would be offset by needing to redo ductwork, plumbing and opening up walls. The rent as SFR wouldn't be as high as for two units, and there's probably not enough room in the price to flip it. At least not for us, since it would be our first flip.
Also, we're concerned the resulting SFR will be odd - two driveways, two front doors, etc., - unless we make changes there as well.
Developer · New Orleans, LA · Member since 2015 · 1k+ posts · 898 votes
10y
@Sandi Hague Does your city have a process for zoning variances? If so, it might be worth talking to them, especially if it is actively being used as a duplex and has for an extended time. I know my city has strict zoning regulations, but if property has been used continuously, they will consider letting the property continue to operating as it is. You could revise your office to be contingent on getting the ruling on the zoning department.
In my city, SFH sell for more $/ft2 that duplexes. There are lots of conversions, as it makes a small duplex into a nice medium/large single family house.
Investor · Olathe, KS · Member since 2014 · 88 posts · 58 votes
10y
It definitely comes down to your goals and the numbers.
If your goal is to house hack (live in one unit and rent the other), it won't work, obviously. If your goal is a flip, an SFR may be a quicker sale than a duplex since your buyer's pool is bigger and the fact that the neighborhood is aready SFRs.
In either event, you need to run the numbers. Does it still produce the right sale price? The right rent? What are your returns? Use the deal analyzers here on BP to give you a good sense.
One other thing: If you take a duplex architecture and layout and make it an SFR, it needs to look like an SFR when you're done. Otherwise, you lose buyer's appeal. That's purely your judgement.
The current numbers don't work for us as a SFR. However, the current owner is anxious to sell - probably more so now with the zoning issue. Just need to decide at what price it would be worth our while.
Developer · New Orleans, LA · Member since 2015 · 1k+ posts · 898 votes
10y
@Sandi Hague Does your city have a process for zoning variances? If so, it might be worth talking to them, especially if it is actively being used as a duplex and has for an extended time. I know my city has strict zoning regulations, but if property has been used continuously, they will consider letting the property continue to operating as it is. You could revise your office to be contingent on getting the ruling on the zoning department.
In my city, SFH sell for more $/ft2 that duplexes. There are lots of conversions, as it makes a small duplex into a nice medium/large single family house.
The current numbers don't work for us as a SFR. However, the current owner is anxious to sell - probably more so now with the zoning issue. Just need to decide at what price it would be worth our while.
Thanks!
My guess is that the current Owner ALREADY knew about the zoning issue.
But I agree with Mike Wood; the city may be prepared to "grandfather" the duplex configuration, especially if it's been that way through multiple Owners, with no prior Code violations(?)
If it can be argued that it doesn't look out of place, and it conforms with other Duplexes (try to find nearby similar ones?), then you may well have a shot. But if any previous Owner/s (perhaps even the current one) have already tried, and failed, well, how do you think that the City will feel about its previously well-thought-out-and-fairly-considered verdicts being challenged by you?
If you have listened to @Brandon Turner's webinars, you will likely be aware that his very first flipping venture was a Duplex, which he DELIBERATELY converted into an SFR! He relates that story as a cautionary tale: how to spend two years of your life working really hard, achieve your goal of having a fabulous family home for sale - and lose $10k!
ie. If you can't keep it as a Duplex, hopefully your contract contingency can get you out of it altogether. Would you agree that your plan was never about it becoming a single home?
ie. Don't let the Owner "get away with it"! All the best...
Investor · Shawnee Mission, KS · Member since 2014 · 44 posts · 9 votes
10y
Thanks @Mike Wood. We've already been back and forth a couple of times w/ the zoning dept. and it looks like a variance is not an option here. That's interesting about New Orleans having lots of conversions from multi to single. Seems like we run into more singles converted to multi here. Thanks!
Investor · Shawnee Mission, KS · Member since 2014 · 44 posts · 9 votes
10y
Thanks @Brent Coombs. It was sold to us as a duplex, so we're not concerned about getting out of the contract if it cannot legally remain a duplex. Thanks for your comments!