Turning a Duplex into a Triplex in Boston?

Question

Hello BP!

I own a number of duplex in and around the Boston area, and I have project in mind for one property that I could use some help with.

The house is a duplex located in the Oak Square part of Brighton. It's 2 bed/1 bath each, and it's on a 10,000+ square foot lot with parking for 4 cars (two garage, two additional off-street). In addition to the current apartments, the basement has some great expansion potential. It has high ceilings, a half bath, and maybe 1,200 square feet of usable space. The basement has two private egress as well. It also has a spot for a third meter, though there is not one currently present. The home is currently zoned for a 2 family.

I'm looking to refinish the basement and create a third (legal) studio apartment. I have plenty of money to throw at the deal, but am without the know-how. I understand that it would be a serious undertaking with rezoning, permitting, etc, so I'm in need of some assistance from an investor/contractor familiar with the process in Boston.

I would love to hook up with a contractor that's willing to take on the job and work through the process with me. I got a great deal on the home as it is, and with an additional unit the cash-flow would be great and the equity would skyrocket. I would then cash-out refi, and look for the next deal. I also understand that it might be a case of the city simply saying "no," and 'Id have to consider a plan B.

If anyone has a contractor to recommend, or is a contractor themselves, I'm all ears. Any and all suggestions are welcome.

Thanks!

- Matt Nolan

Dan K. · Answer

Let me second what @Wayne Brooks said -- you are far from needing to talk to contractors.

I would follow the following steps (sounds like you have started):

1. Doing some digging on your own. What are the requirements for 3 dwelling units in terms of lot square footage and FAR? If you engage with the zoning department on your own you might want to be a bit vague so that you don't pin yourself into a corner. It's less about "being on the radar" and more about saying something incorrectly. For example, even in this post you mention that there are two meters -- do you mean electric or gas? If it's electric, you need a public meter as well if the building has any common electric outlets, lights, etc.

Also, you might only have 3 parking spots or less in the eyes of a zoning board -- vehicles need maneuvering room and can't be tandem.

2. If it looks like you have a viable argument, find on of the "go to" lawyers that is in front of the zoning board at every single meeting. You want somebody that knows what they're doing and how to put together a compelling case.

3. If the lawyer thinks you have a potentially decent case, engage with an architect in order to put together plans. You'll need plans to present to the zoning board.

4. Talk to the neighbors about what you're planning. They shouldn't first hear about the request via a letter from the zoning board.

If you get approval, you'll then need the architect to put together actual building plans. Only then you should start looking at contractors.

Contractors aren't going to want to partner with you at this stage and help you walk through the process. Good contractors are very, very busy in this area with the market the way it is. They want to engage with people that are ready to start (and pay) for a project.

Dieggo Goncalves · Answer

Sound good. Hope it works out. Thanks for the response.

Matt Nolan · Answer

Like everything else in real estate, the process is taking a little longer than I had hoped. With that said, we’re making some headway.

My friend walked the property and is optimistic that a variance is possible. He’s writing up plans for another job, and he should be done with that within the week or so. From there, he’s going to write up and submit plans for my property.

I’ll update the thread once the variance is approved or denied, and reasons as to why it was approved/denied. If the variance is denied, I’ll make the space an additional bedroom and turn the half bath into a full bathroom.

I’ll be adding some serious equity (and cashflow) either way, but the third unit would certainly be the preferred next step.

Dieggo Goncalves · Answer

Hey Matt, very interesting thread! Increasing the # of units is something i've been curious to know, also.

Any news from you friend's attempt?

Thanks.

Matt Nolan · Answer

Update:

A friend of mine is consulting on a nearly identical project currently. The property is a duplex, located on the adjacent street from my property, and he’s looking to add an in-law/third unit to the basement. He’s an architect/flipper with a lot of experience in the area. If he gets his unit OK’d, he said he’d act as a consultant on my unit. He’d draw up the plans, go through the appropriate avenues for approval, and then I’ll pass it along to my builder. I’ll update the thread once he hears back regarding his current project.

Dan K. · Answer

Besides the kitchen, adding the third unit isn't going to be much more expensive than the potential expansion. In addition, in my opinion you'll get much more rent for the third unit than the rent increase.

Spend some time figuring out what your property is zoned at (probably in tax database). Then figure out how many lot square feet per a dwelling unit, then the floor area ratio (FAR). If you meet the dwelling unit per lot square feet and the FAR, you've got a good start.

Dan K. · Answer

Matt,

I'd absolutely pursue the additional unit before thinking about expanding the 2bed / 1 bath. To do the expansion of the first floor unit into the basement will be a significant and expensive project. In addition, you're still going to need to meet the building code standards and might need a variance if you exceed the allowable FAR.

Sadly, at least in our area "just framing in and dry wall isn't going to cut it. You're going to need to do some significant electrical work most likely. In addition, the building code might also require an egress window even if you have the other doors.

The easiest thing to do right away, is make sure your parking is rented a top dollar. I would definitely not include it with the apartments -- it's likely that in Oak Square tenants will want to park for free on the street with a sticker rather than paying $175 plus or minus for parking. Of course you could get more for the garages than outdoor spots. Also, I don't know the formation of your driveway and garages, but I have maximized my parking by actually blocking to garages with three cars parked perpendicularly and then renting the garages for storage.

Marina Draper · Answer

I absolutely agree with @Dan K. - a good zoning attorney will be much more helpful than a contractor's advice.

I still recommend you to look for a contractor beforehand - good contractors are booked way in advance! Start getting bids as soon as you're under agreement!

Matt Nolan · Answer

Thanks for the thorough reply Dan!

Let me switch gears a bit then and present a different scenario: If adding an additional unit is out of the question/or becomes a prohibitively long and expensive process, how would you move forward and try and build equity/cashflow?

One alternative I’ve considered was converting the basement into 1 or 2 additional bed rooms and turning the half bath into a nice full bath. This would give me a big equity bump, allow for larger cash flow opportunity (renting a 4 bed/2 bath in place of a 2 bed/1 bath), and I could avoid most of the headache involved with a rezone.

The basement is accessible from the bottom unit as it is, I would just need to frame and sheetrock the garage access from the basement so it doesn’t abut a bedroom in order to cover my bases (I believe).

Turning a Duplex into a Triplex in Boston?

Turning a Duplex into a Triplex in Boston?

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