Information Needed - Adding Studios in Non-Conforming Chicago Basement

[Jodi Taylor]

Hi all. I need some advice from someone with experience working with/building out non-conforming units in Chicago.

I have a 4-unit 12BR4BA multi-family building (all four units are 3BR1BA) that also has a fully open 2,000sqft basement with 2 bathrooms. The building is located in the northern half of the Austin neighborhood in Chicago. The building cashflows decently as is but I'd like to build out the basement to add two studio apartments for increased cashflow. There is also a common laundry room in the basement already that would remain intact. Some of the work included would be adding kitchens (pulling plumbing from bathrooms), insulating the ceiling for sound dampening reasons, various small repairs/cosmetics. Both units would have two entrances/exits but would have non-openable windows. 

Related to this, I have the following questions:

1. Should I pull permits for the work considering the units are non-conforming? Will the city reject the permits since I'm trying to put kitchens in a non-conforming space?

2. What are the risks in building out non-conforming units (I already know a bit about buying buildings that already have them build out)?

3. Anything specific I should know before starting this process? Or be on the lookout for during?

4. Any other insights would be welcome. 

Thanks!

[John Warren]

@Jodi Taylor you wouldn't be able to pull a permit to make a non-conforming unit, so any work you do would be riskier than if this was a conforming project. I would be careful over renovating when you are doing this type of project since you are putting money into what is probably not going to be a legal unit. It won't add to the value of the building. You can pretty much just do a cash-on-cash return analysis to see if it makes sense. I would make sure you can get your money back out through the rents pretty quickly (2 years?).