Converting a Commerical property to Residential

[Jason Angrist]

I’m looking to purchase a multi family property in Miami that is currently zoned and tenant occupied with 5 units. From a lending perspective a commercial loan requires a higher down payment, thus I would like to combine two of the units into one unit to make it a 4 unit residential property. Does anyone have experience in re-zoning from commercial to residential? 

[Jared W Smith]

Quote from @Nicholas Mann:

Hey Jason,

I would start by talking with either the zoning board for that area or an architect.  Sometimes you can pull up the cities zoning map and see how its currently zoned.  As far as I know if its Commercial/Residential zoned or mixed use you can interchange the units, but either way it would have to be approved by the city so that might be a good place to start your research.

Best of Luck

I have to disagree. You do not want to re-zone the lot. Just because a site is zoned for commercial apartment houses, does not mean you MUST utilize the zone for that. It means that's the highest use allowed. There are plenty of apartment zoned areas with single family house in them. May not be much or on outskirts of larger buildings but there's no requirement to use lot for highest use. 

You can just complete the renovation, get permits and go about legally via local building dept., convert to 4 units. Then obtain a new Certificate of Occupancy as formal evidence of the unit count for your lending purpose. Re-zoning one lot is a tall order and would then restrict future development to the higher use and reduce the value of the lot if/when you go to sell. The City will probably not even allow a spot re-zone for this purpose. It's usually up-zoning not down-zoning.   

Think about your strategy like @Benjamin Aaker said. The renovation would need to occur before you take ownership to implement this strategy. So you have some logistics to work out. Most sellers aren't going to do this for your sake just to be able to buy it. 

-Jared W. Smith, RA - Principal Architect at Architect Owl PLLC (Licensed in NY & CT)