SFH zoning but set up as Triplex? (Philadelphia)

[Wz Michael]

I have a deal 400k, previously was approved for 3 family but city converted the zoning to SFH on whole block.

I'm thinking to submit an offer this weekend. I'm so nervous

The number is very lucrative. 3300sq ft+ in a B+ neighborhood

1 3bd & 2 2bd estimate 3700+ rent

monthly mortgage $2814, owner occupied, minus 10% (repair & maintenance & vacancy) I would still cash flow over $500 & 1k+ when I move out

My main concern is the legality of renting out... renting by room? will the home insurance cover if something goes wrong since this is not a legal multifamily?

there seems to be many advertised as multifamily but do not have the zoning & permit in Philly.

[Kevin M.]

Quote from @Wz Michael:

I have a deal 400k, previously was approved for 3 family but city converted the zoning to SFH on whole block.

I'm thinking to submit an offer this weekend. I'm so nervous

The number is very lucrative. 3300sq ft+ in a B+ neighborhood

1 3bd & 2 2bd estimate 3700+ rent

monthly mortgage $2814, owner occupied, minus 10% (repair & maintenance & vacancy) I would still cash flow over $500 & 1k+ when I move out

My main concern is the legality of renting out... renting by room? will the home insurance cover if something goes wrong since this is not a legal multifamily?

there seems to be many advertised as multifamily but do not have the zoning & permit in Philly.

There’s a reason the return is so high: risk. You are one phone call to L&I away from getting an order to vacate notice on the door. I’ve personally seen it happen.  

There are special rules for triplexes in Philly relating to egress, sprinkler systems, lighting, fire alarms, fire breaks, and more. You could be looking at a huge bill to become compliant and a fight that could take years. 

Or you could quietly make a great return for years like 95% of illegal multi-families throughout the city…