Recommendations for Finishing a Basement?

Question

I am considering making an offer on a 3 flat in Chicago and plan to finish the basement.Before I just jump in head first, I wanted to get some opinions from people with more experience than me.

What is the usual process for finishing a basement, what materials should I buy for the contractor(s)?I've had some people tell me I don't NEED to pull permits, but I would like to get everything done right to avoid fees and issues if selling.If I did pull permits to finish the basement (making it a legal 3-unit w/garden apartment), would there be any changes in the properties zoning?

The basement is a full-walkthrough with 8-9 foot ceilings - I'll link a couple of photos for reference.

Photo 1 - Potentially bathroom & bedroom

Photo 2 - Potentially living room & kitchen

Thanks!

Tom Shallcross · Answer

@Michael Mahung - as @John Warren mentioned you need an architect. Step one is to see if your property is in one of Chicago's ADU PIlot Areas - Chicago ADU Site. The ADU program allows you to add a unit by right instead of going through the entire zoning variation process. @Samuel Pavlovcik has reviewed and worked on these for me and can talk you through the administrative differences.

Regardless of ADU or not, if you're doing it by the book, you'll draw up plans and submit for permits. You'll likely have to update water service as you're adding a bath, and need to account for adding an additional electric and gas meters.  Besides the height requirement you referenced, you'll need to also hit the light and ventilation requirements. I'd strongly recommend drain tiling around the perimeter along with the sump pump and ejector pit. Also, make sure the general mechanical room is separated and can be accessed as a common area (so don't have to access garden unit to get to meters and mechanicals).

As for buying materials, if you don't know what is needed than you will need to work with an experienced GC and rely on him. Overtime as you have a better pulse for this project, you can look to order materials, but right now it sounds like you would just be adding another layer of variance to the equation.

John Warren · Answer

@Michael Mahung you would want to consult with an architect ASAP. To make this a legal unit will not be as simple as you think. You will need the architect to make sure you can pass all the code issues, and you will likely end up doing some extra work you are not anticipating. Things like electrical upgrades, water service upgrades, and other costly CapEx upgrades go into making a unit legal.

On the flip side, the architect will define all of the material for you. You wouldn't have any questions about if you are getting the right type of materials as the plans define everything for you.

Scott Mac · Answer

Also I see what looks like a macerator on the sewage line with an electrical connection (to the right of the window).

That might be in indication of sewage issues in the line to the street.

You might want to have a sewer cam done (by a reputable company).

Maybe try to find out the age of the macerator, and any history if issues, and if it truly is a home use macerator vs one for an RV.

A home inspection might also be a good move.

Also the old cast iron sewer pipe looks to be wrapped with some kind of insulation, you might want to see if you can get any info on pipes freezing in the winter for that building (or if the pipe is cracked and someone tried to bind it back together).

Good Luck!

Scott Mac · Answer

Hi Michael,

If it were mine, I might think about trying to attract other than typical basement dwellers at a higher price point.

Possibly offer furnished.

It would depend on the neighborhood and the renter types in the units above, as well as the risk of longer time on market compared to a Greige LVP cookie cutter apartment.

A DIY would have a lot less money in it to risk.

In a B area, maybe something like this (maybe--maybe not though--risk).

Just some food for thought.

Like a sports bar, with a black drop ceiling, water resistant LVP, and hide the sewer pipes in a closet.

Homemade bar and shelves, toss some oriental carpets around, and dig that window down.

(right click open in a new tab to see the pics bigger)

Good Luck!

https://www.youtube.com/watch?v=IdgKkjM4DTs

Bruce Woodruff · Answer

Great advice!

Jonathan Klemm · Answer

Hey @Michael Mahung - My advice, definitely make the offer and lock the property up.

@Tom Shallcross gave away my two go-to architect referrals.  I'd be happy to talk through any contractor questions with you.  Feel free to reach out and we can set up a consultation.

I know how tricky the city of Chicago can be to work in as an investor so happy to help any way I can.

John Warren · Answer

@Michael Mahung the problem with adding a unit, is that it can easily cost over 100k like @Brie Schmidt mentioned. Often times, the juice just isn't worth the squeeze. Even if you decide to pony up and spend that money, it will likely still take you 6-12 months to finish the process. Once you bring in full plans and permits, the process gets very complicated and time consuming.

I think most investors find it is better to simply find a different deal and keep buying buildings. The only places it will make sense to spend northward of 100k on a unit renovation is in A+ locations and most of us own in B or C areas where the numbers just won't make sense.

Brie Schmidt · Answer

If you are in an ADU zone it is much easier and faster.  If you have the ceiling height you are looking at about $125-$150k to add a unit.

Bruce Woodruff · Answer

You could have a plumbing issue (Sewer) if it is below grade of main line. Have a plumber check this out, it can get expensive...

Recommendations for Finishing a Basement?

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