Multifamily zoning help in Phoenix

[Yader Gomez]

Hi all,

I'm under contract for my first property ever and extremely excited about it. It's a 3 unit property in Phoenix with a 3/1 main house and a second building with a 2/1 unit and a studio. In my excitement of finding something nice that made sense financially, I overlooked zoning. When I looked up the zoning, it's zoned R1-6: single-family residential 5.3 dwellings per acre.

How does this impact my desire to eventually rent out all 3 units like a 3plex and claim this as income? It appears the previous owner remodeled it and was trying to fill all 3 units to have it fully rented for the sale but I managed to contact just in time (they have 2 rented out until 12/18) since I plan to house hack. Currently they also have the landlord paying utilities which makes me think they may not be separately metered.

Does this make it illegal to have this second building and/or rent out these units? Should I back out of this deal or keep going with it and get a variance or try to re-zone? For reference, the immediate area is all R1-6 but 2 blocks west, 1 North is a pocket of MFH zoning, 2 blocks south is another MFH zoning pocket, and then one block east of the property, the entire area is MFH zoning. A look on Google maps also makes it seem like at least a few other properties on this block have a second building that (like mine) violates the zoning distance from the back of the property lot and at least one of them looked to me like a rental unit.

Any and all help is greatly appreciated as I try to get my first deal done.

[Ryan Swan]

@Yader Gomez did you ever check if all of additions and buildings were permitted? I doubt the owners pulled permits for all of the work, so getting zoning variances would be only part of your problem. 

It's rare to find individual meters on a residential property that wasn't purpose built to to be multi-family. The utility providers (SRP or APS) won't run new meters without all of the proper permits. I'd imagine the owner will be paying all water/sewer/trash/recycling, as well as the electricity and gas to the property (if applicable). Are you buying this property site unseen? It's pretty easy to determine what meters are on-site by simply walking the property. 

This is just my opinion and not legal advice. Proceeding with this transaction comes down to your own risk tolerance for purchasing a property with zoning violations and potentially non-permitted out buildings. However, most properties like this probably fly under the radar and you'd have no problem renting them as is.