There are a lot of big old homes in my Baltimore neighborhood with 5+ beds and 2+ baths in the 80k-100k range (rehab quality). Neighborhood is safe and up and coming. I can see potential for 2 units in these homes, with some work. Think it's worth the investment? Any one have experience doing something like this?
Hi @Nicole B.
I would say in most cases it's not worth it. Especially for 2 units. Maybe for 3, but the zoning would have to be correct on the lot where the property sits.
In order to seek out a project like this you have to check the zoning for that particular property (ex. DR5.5 - which in Baltimore County means Density Residential 5.5 units per acre (the county and city may differ)). The setbacks and lot size must meet the minimums before you can increase from a single-family to anything more. Baltimore County has an online tool/map where you can check zoning on a particular property: http://myneighborhood.baltimorecountymd.gov. Not sure about Baltimore City.
I had looked into this for my primary residence. I know that where my primary residence sits (DR5.5) the county zoning department told me I have to have a minimum of 10k sqft of land and meet the setback requirements (which I don't remember exactly what they were offhand at the moment) in order to have a legal 2 unit property. Otherwise you can attempt to get a zoning variance / petition for a special exception where they place a sign on the lawn for, I think it's, 60 days and then you have a hearing where anyone from the community can come and speak against it. I'm not sure if they will allow this in all cases or not and there's obviously no guarantee it will happen. So going this route on a non-conforming lot/property, you would be taking a gamble.
So is it possible? Probably with some research and effort. Whether or not it's worth it is a whole different discussion. Converting a house into 2 units would obviously not be cheap since if you're going to do it right you're talking about all new mechanicals and split utilities. After everything is said and done you now have a less liquid asset as 2 units tend to sit on the market longer and don't appeal to regular retail buyers (since it's no longer a single family). If your numbers are really good then it could work out, but if they're even close to tight it could turn into a bad investment very quickly.
Whether you're in the city or county, I'm assuming city based on the price range and size of houses you're mentioning, check with the zoning department. Call about a particular property address you have in mind and if you can look up the zoning beforehand so you can tell them over the phone. Then ask if it's possible to convert it to a 2 unit or more multi-family property.
I believe the city is more strict on these conversions, however, based on something I remember reading from a post by Ned Carey.
Zoning and numbers will answer the question.
Cost to re zone, cost of renovation and final rent numbers.
It is always a numbers game but it is a guarantee that 2 units will cash flow better than any SFH when the numbers to convert work. You will need a minimum $1000/month rent per $100K invested.
Your market will provide the answers.
Hi @Nicole B.
I would say in most cases it's not worth it. Especially for 2 units. Maybe for 3, but the zoning would have to be correct on the lot where the property sits.
In order to seek out a project like this you have to check the zoning for that particular property (ex. DR5.5 - which in Baltimore County means Density Residential 5.5 units per acre (the county and city may differ)). The setbacks and lot size must meet the minimums before you can increase from a single-family to anything more. Baltimore County has an online tool/map where you can check zoning on a particular property: http://myneighborhood.baltimorecountymd.gov. Not sure about Baltimore City.
I had looked into this for my primary residence. I know that where my primary residence sits (DR5.5) the county zoning department told me I have to have a minimum of 10k sqft of land and meet the setback requirements (which I don't remember exactly what they were offhand at the moment) in order to have a legal 2 unit property. Otherwise you can attempt to get a zoning variance / petition for a special exception where they place a sign on the lawn for, I think it's, 60 days and then you have a hearing where anyone from the community can come and speak against it. I'm not sure if they will allow this in all cases or not and there's obviously no guarantee it will happen. So going this route on a non-conforming lot/property, you would be taking a gamble.
So is it possible? Probably with some research and effort. Whether or not it's worth it is a whole different discussion. Converting a house into 2 units would obviously not be cheap since if you're going to do it right you're talking about all new mechanicals and split utilities. After everything is said and done you now have a less liquid asset as 2 units tend to sit on the market longer and don't appeal to regular retail buyers (since it's no longer a single family). If your numbers are really good then it could work out, but if they're even close to tight it could turn into a bad investment very quickly.
Whether you're in the city or county, I'm assuming city based on the price range and size of houses you're mentioning, check with the zoning department. Call about a particular property address you have in mind and if you can look up the zoning beforehand so you can tell them over the phone. Then ask if it's possible to convert it to a 2 unit or more multi-family property.
I believe the city is more strict on these conversions, however, based on something I remember reading from a post by Ned Carey.
@Nicole B. as said you have to know if the zoning will allow multiple units. I believe you can get exceptions, exemptions etc but in general the city is against it. In particular I hear the city wants to know that you have on site parking for the units.
i have experience in it.
One place you might want to look is the county, not the city. Taxes are cheaper and its more landlord friendly.
In regards to duplexing it seems a lot of homes in the area already have a front door area with a backdoor egresses from the basement and midlevel of a 3 level house out to a yard which could be used for parking. If you plan on duplexing consider that because seperate entrances are key and to have to build a staircase down to the ground from above or cut into an existing foundation is a lot of $ needed to spent that can be avoided. Another thing that will be needed that is good for a lower basement unit is an egress window. Its required for all below grade bedrooms for emergency egress from fire but once complete also double as a light source to give that lower unit a more inviting feeling. A lot of people will be willing to live in a place that doesnt feel like a dungeon. In many cases these places have laundry in the basement. If you do some framing adjustments you can make it so both units can share the laundry and not be in each others space. The last thing i would look for is one where you have a full bath already in both proposed units. Bathrooms are the most expensive rooms to add. Other pitfalls include making sure the basements have good ceiling height or that will kill the budget to the point it wouldnt make sense to duplex. Installing a kitchen, framing drywall and flooring are unavoidable and metering is a good idea though you can get around it. You should be able to cash flow a good amount in a C level neighborhood in the county and in parts of the city. You could do this with good tenants and it doesnt have to be section 8
I would factor a minimum 20 k into the project if you diy and gc it yourself ofcourse that is a huge ballpark but creating a duplex will not be cheap.
i have experience in it.
One place you might want to look is the county, not the city. Taxes are cheaper and its more landlord friendly.
In regards to duplexing it seems a lot of homes in the area already have a front door area with a backdoor egresses from the basement and midlevel of a 3 level house out to a yard which could be used for parking. If you plan on duplexing consider that because seperate entrances are key and to have to build a staircase down to the ground from above or cut into an existing foundation is a lot of $ needed to spent that can be avoided. Another thing that will be needed that is good for a lower basement unit is an egress window. Its required for all below grade bedrooms for emergency egress from fire but once complete also double as a light source to give that lower unit a more inviting feeling. A lot of people will be willing to live in a place that doesnt feel like a dungeon. In many cases these places have laundry in the basement. If you do some framing adjustments you can make it so both units can share the laundry and not be in each others space. The last thing i would look for is one where you have a full bath already in both proposed units. Bathrooms are the most expensive rooms to add. Other pitfalls include making sure the basements have good ceiling height or that will kill the budget to the point it wouldnt make sense to duplex. Installing a kitchen, framing drywall and flooring are unavoidable and metering is a good idea though you can get around it. You should be able to cash flow a good amount in a C level neighborhood in the county and in parts of the city. You could do this with good tenants and it doesnt have to be section 8
I would factor a minimum 20 k into the project if you diy and gc it yourself ofcourse that is a huge ballpark but creating a duplex will not be cheap.
i have experience in it.
One place you might want to look is the county, not the city. Taxes are cheaper and its more landlord friendly.
In regards to duplexing it seems a lot of homes in the area already have a front door area with a backdoor egresses from the basement and midlevel of a 3 level house out to a yard which could be used for parking. If you plan on duplexing consider that because seperate entrances are key and to have to build a staircase down to the ground from above or cut into an existing foundation is a lot of $ needed to spent that can be avoided. Another thing that will be needed that is good for a lower basement unit is an egress window. Its required for all below grade bedrooms for emergency egress from fire but once complete also double as a light source to give that lower unit a more inviting feeling. A lot of people will be willing to live in a place that doesnt feel like a dungeon. In many cases these places have laundry in the basement. If you do some framing adjustments you can make it so both units can share the laundry and not be in each others space. The last thing i would look for is one where you have a full bath already in both proposed units. Bathrooms are the most expensive rooms to add. Other pitfalls include making sure the basements have good ceiling height or that will kill the budget to the point it wouldnt make sense to duplex. Installing a kitchen, framing drywall and flooring are unavoidable and metering is a good idea though you can get around it. You should be able to cash flow a good amount in a C level neighborhood in the county and in parts of the city. You could do this with good tenants and it doesnt have to be section 8
I would factor a minimum 20 k into the project if you diy and gc it yourself ofcourse that is a huge ballpark but creating a duplex will not be cheap.
Pls. Can you recommend someone that is good and can do the job?.