All Forum Posts by: Lee Hampton

First, make sure the lot can be developed for multi-family. People misunderstand the statement “Houston has no zoning”. While that is technically true, there are several ordinances enacted in Houston in the last seven years the act as de facto zoning, not to mention deed restrictions. Small multifamily is particularly challenging to navigate. The multifamily you see near Rice U. was built long ago and would not be permissible by COH under current rules. You can’t just recreate what you see around the lot.

With 6000 sq ft lot, the max number of units possible is three (3), and that is just based on the density rule which is a max 27 units/acre, prorated that puts you at a max of three. That’s just for starters, not even considering other ordinances, .e.g., minimum parking requirements. Also, Check deed restrictions to ensure multifamily is allowed

If you have not bought the property, get in under contract with a 15 day option, then bring in someone with knowledge to advise you. Getting it under contract ensures you and only you can close the deal. Then get a sense for the real “possibilities” without the worry of someone undercutting you.

@Marsha Rost

Not sure on cost with limited info, but it is mostly labor.  Material is a few hundred dollars, labor could be as little as $1500 or as much as $4000.  this is just a blind estimate,  the cost is really about getting access to the area, either via trenching or removing subfloor to access area.  

@Marsha Rost

Floor to roof is the latest code for separation.  Normally,  you would be grandfathered and this would be a non-issue.  I would leave it as a single family home officially.   As long as you are just doing a basis update/remodel and not transforming it to something drastically different,  you should be able to fall under the grandfather clause.    

However, it you are forced to add floor to roof separation, you don't want to pour piers given your limited access to the crawlspace.  And sheetrock in a moist crawlspace is a no-go.   You would use cinder blocks as your firewall in the crawlpsace.   Not an easy installation after the fact. 

@Marsha Rost

Not sure i understand ur situation, the pier and beam is throwing me off as that seems an irrelevant piece of information.

1 story or 2 story?    when u say pier and bier, does it have  a crawl space?    

City of Houston(COH) treats a duplex the same as a Single family residence for permitting purposes. You are not subject to multifamily ordinances until you reach 3 units. There could be HOA restrictions in addition to COH. If there is no HOA, then COH is all you have to worry about. Because of the age of the house, you will be grandfathered in against most ordinances, but once you remove/modify an item, you will be required to meet current code, e.g., replacing an electrical outlet requires the new outlet meet new code(tamper resistant). And a fire rated separation is just a thicker or an extra piece of fire rated sheetrock, easily achieved.

@Daniela R.

Congrats on graduation and on the excellent credit score.   Your story of humble beginnings to the track you are on caused me to smile.   Thus i'll give you some quick advice.

Buy now, especially at that price point.  There is a shortage of housing under $300k and i expect that situation to get worse, much worse.   Interest rates are at historic lows,  the time is now.  You don't need $40k down payment, you may only need $10k.  First time homeowners qualify for low down payment loans, as little as 3%.   Start looking now, and look at multiple houses and areas before u buy.  Do your homework.  It make take you several months of looking to find what you want and another 2 months to close the loan.    Lastly; location, location location.   The location is far more important than the house.    Happy house hunting and best of luck in your future endeavors.

@Cody L.  Let me know when you are ready. With City of Houston ordinances, Multi-family has become all about compliance with maximum density ratios and minimum parking ratios. I can let you know what is possible.

1350 sq ft each. At completion of construction, they will rent out at $1550. It's a triplex buy have platted and permitted them as individually SFH's so they can be sold off as individual units in the future.

Thanks,

All are 3 bdr / 2-1/2 bath

Investment Info:

Small multi-family (2-4 units) other investment in Houston.

Purchase price: $45,000
Cash invested: $340,000

Small Multi-family! Three unit greenfield project. Purchased land @$45,000, and building tri-plex from the ground up.

What made you interested in investing in this type of deal?

Positive cash flow is my current business model. New construction offers the benefit or higher rents and the benefit of much lower maintenance and upkeep.

How did you find this deal and how did you negotiate it?

Land acquisition was the key component. Purchasing the appropriate property at the right price is the foundation of any successful new construction project. 2nd important component is finding a wholesale builder and reaching a fair price. In this case i was the solo act, investor, developer, builder and property manager.

How did you finance this deal?

Financed thru a small community bank

What was the outcome?

In progress....