What steps to covert an Austin SFR to MFR?

Question

Hey BP friends,

I have an off market 1600-1700' SF in the Crestview 78757 area in north Austin, Tx that I would have first dibs on in Fall of 2019. SFR's in that area rents go for $1600-1900 a month in this area which is nice but anyone who knows that area can tell you its a highly desirable area and the $$$$ show it so rents in that area just wont cut it. However converting it into a duplex may depending on purchase price. Aside from construction and permits what steps would one need to do to convert a SFR into a Duplex? How would I go about seeing if it's zoned for multi and if it's not how would I change it to a multi lot? There are a few other houses on that street that are duplexes so I'm sure it's possible. If there's a will there's a way, and there is always a way if you want it bad enough. This is a house I would theoretically be splitting down the middle so to speak.

Little back story on the house: This is a late 50's to early 60's house that was built by my grandparents and sold to my Stepdad in the 90's. The house is a 3/2 with an laundry room, garage conversion, and a din style living room added on. So it could be turned into a 3/2 , 1/1 or a 2/2 , 1/1. It already has an additional front door where the garage was converted into a fireplace/music studio. My mom and stepdad are selling next fall. I would like to be involved somehow in the transition of this house in one way or another. What methods come to mind in this situation? Converting to a duplex and BRRRR'ing it seem to be the best route to me. There are not a lot of deals in austin and I'm trying to Make a deal with what I have available yet not fudging numbers due to emotion. I feel like I have the puzzle in front of me but am having a hard time seeing what the image will be. Thankfully I have nearly a year to figure this out.

What say you, BP'ers? Let's be creative :)

David Ivy · Answer

@Nick Sheveland

In this area of Austin, it is very likely to be zoned SF-3, which allows for Duplex Residential (i.e., two dwelling units within a single building). You can check the specific address using Austin's Zoning Profile Report.  Once you know the zoning, you can find out details using Austin's Guide to Zoning document.

Account Closed · Answer

I am not a lawyer, but my understanding is that anything classified as SFR in Texas includes Duplexes, Triplexes and Quadplexes. I've seen many duplex conversions and doubt they had to go in front of the zoning board to request the conversion. However, the permitting process should still be followed and, as always, consult a lawyer.

Mike Wood · Answer

@Nick Sheveland I am about to do that same thing, just in a different town.  Your likely going to have to update alot of the house to current code requirements, if you split the house legally.  Its going to cost you alot.  Especially if you split the utilities.

Also, you don't have alot of space for two units.  1600ft2 is going to be tight, but doable.  My suggestion would be to see about two units, each a 2/1.  I dont see how you can setup that small of a house as a 3/2 and a 1/1, unless the 1/1 is more like an efficiency.  Anything less than 500ft2 will likely be way to small.

Additionally, most area have lower value/ft2 for duplexes.  So if you pay market price for a SFH, you will potentially be destroying value by converting it (in the area where I am doing this, the $/ft2 for SFH is ~$125 and ~$100 for duplexes).  Something to consider, given that you will be putting good money into such a conversion.  In my case, I got the original house for a really good price (it's a total gut project), so I can make the numbers work. If the property is in good shape, I doubt it every make sense (excluding some type of basement conversions that are popular in the north).

Jerel Ehlert · Answer

There are building codes for different "SFR" types.  When considering whether to convert the dwelling type, it is always a good idea to read the plans for that part of ATX to see if it is permitted or encouraged.  You will need to replat the property into separate units.  That involves getting permission from the permitting authority.  There may be certain modification required (commonly, a firewall in a shared roof).

Like others said, you will probably need an attorney to navigate the process.

Aaron Gordy · Answer

@Nick Sheveland I have done condo conversions which is just a legal maneuver filed with the state. You will need a good real estate or land use attorney for it.  You can check here for the city level property profile to see the zoning. You may not even have to change the zoning. http://www.austintexas.gov/GIS/PropertyProfile/ The permits and the actual  construction work is a bit different. If you need help with it hmu. I know construction.

Nick Sheveland · Answer

Account Closed thank you! Would you happen to know anyone I could talk to that has done this type of conversion? I agree with still following the permitting process. Can't be too careful.

Nick Sheveland · Answer

Thanks @Aaron Gordy, @Jerel Ehlert, and @David Ivy for the guidance! I did look at the zoning profile and its labeled as SF-3-NP so that's good! I'm going to take a look at the Guide to Zoning document today.

That's for the help everyone.

What steps to covert an Austin SFR to MFR?

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