4-Unit Propane Heat - Adding Meters

[Noah Love]

Hi All,

I've been a longtime reader of these forums and they've helped my fiancé and I tremendously since we started searching for a 2-4 unit last year. This week we finally pulled the trigger on a 4-unit property in Newburgh, NY. Each unit is 1br, 1ba. Our plan is to renovate using an FHA 203k, live in one unit and rent out the other three. I have two distinct questions for the group - I've searched the threads but haven't found much on these particular circumstances:

1. The property is currently operating as a 6-unit with two identical illegal 1bed, 1 bath basement units. The current owner had these installed six years ago - they would be conforming/legal except for current zoning regulations. In order to purchase the property and qualify for FHA financing we need to discontinue these units and remove the stoves, fridges, etc. The basement space has been well finished and we wouldn't want to leave it underutilized. We're wondering which would be a better option: convert the two first floor 1 bed units into 3 bed, 2 bath units, installing spiral staircases into the basement spaces (+2 beds and 1 bath downstairs) OR use the basement as storage (for a fee)/a potential laundry room. Has anyone ever expanded apartments into the basement space for additional beds, baths?

2. The current owner installed a new propane furnace with a large tank in the backyard three years ago. She's paying heat/hot water for the entire building at the cost of $6,000+ per year, although each unit has its own thermostat. Taking a closer look at other similar apartments on the market, in 99% of the units the tenant pays for the heat. I don't think I could recoup this cost by simply raising the rents, I'd rather have each unit on a separate meter. Is it possible to install four separate meters running off the same communal propane tank and have the propane company bill each unit separately? Has anyone ever done a similar conversion, and how much did it cost?

Thanks in advance!

Noah