Duplex with land approved to build upto 12 units

[Christopher Aguilera]

Good morning BP,

I came across a duplex that is in a zone approve to build upto 12 units. The duplex is pretty beat up and fair price for the market. What advice would you give to do my due diligence and make sure this is a true statement from the listing agent.

Any feedback or comments is much appreciated.

Thank you

[Eric Teran]

@Christopher Aguilera contacting zoning as @Greg Dickerson mentioned is your first step. However, they will not tell you what can be built. They will tell you the restrictions. Once you understand the restrictions then it becomes a puzzle until you find the right design to maximize the square footage of the building. If you are in a big city or county most likely most of the zoning information may be found online.

First find out the zone. Then ask the following restrictions, setbacks (front, side, rear), height (does the penthouse count?), FAR (floor area ratio which is the max SF for the lot), lot occupancy (how much area can the building take up on the lot), green area ratio or pervious surfaces (a lot of places now require soft scale or where water can collect and not drain to the storm drain), parking requirement per unit (can the parking be offset if near public transportation), affordable housing, any view corridors to preserve, is it a historical neighborhood, minimum size per unit, and any public enhancements required? This may be overkill but if you don’t ask all these questions (I have experienced all of these at least once in various projects) it may ruin your profit.

Once you are done with zoning you need to go to the building department. The two big question for me is if you go over three floors do they require something other than wood frame construction. The second is in theory you can add 10 more units. That will require a much bigger water meter, water lateral and sewer. How much do those cost to upsize? For example in DC one of my clients had an existing 3/4” meter and had to go to a 1.5” meter. He had to pay $10k. These items can kill all your profit.

Good Luck.