Three Unit into Two Unit

Three Unit into Two Unit

Allentown, PA · Member since 2018 · 29 posts · 9 votes

Hey guys,

Looking for some insights on what is involved with combining two units in a property. Currently we are interested in a 3-unit property that requires an external fire escape to be built in order to make it code compliant. After talking with a few engineers and fabricators we have an estimated cost of anywhere from 25K-35K for the construction and installation. While talking to 2 code officers from the area, they brought up the idea of de-converting the property into a duplex by combining the top two units and this would allow us to no longer have to build the fire escape. 

My questions arise in what is required in order to make it a legal duplex. I will call the code office to make sure, but I was just curious if anyone had a similar experience. I know that I need to remove the kitchen, but pretty much after that is there anything else that needs to be done? Also, if anyone has ever removed a kitchen, could you maybe describe what that cost you and what all needed to be done?  

Also, each of the units is currently on separate electrical meters, so I'm uncertain as to what would need to be done when converting to a duplex. Could 2 meters just be billed to the same tenant? 

Any additional nuggets of wisdom would be greatly appreciated.

Thanks.

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  • Rental Property Investor · Greenwich, CT · Member since 2015 · 4k+ posts · 2k+ votes
    7y

    @Allyson Straka, a conversion sounds like a pain. What tenant wants to pay 2 electric bills? How much will you be losing in rent each month? It's unlikely that the rent on one larger unit will equal what you could get for two smaller units. Between the cost of the conversion and lost rent, I can't imagine you're really saving any money. It will also probably lower the value of the property overall.

    Are there any other ways to meet code? Add collapsible fire-escape ladders to each room? Something like this? 

  • Allentown, PA · Member since 2018 · 29 posts · 9 votes
    7y

    The code officers said that they have suggested this to multiple other people who have went through with it and it is a fairly straight forward process (Although I have no idea). Although it does lower the rent by about 300 per month there is a point where if the fire escape costs a certain amount the return from the deconversion is better. Based off of numbers I am looking at at the moment it seems like pretty similar returns. 

    Honestly either approach sounds like a pain as there is no simple solution to the fire escape as a collapsible escape like u suggested is not legal here. 

    Not sure about the overall value of the property going down but it is definitely a good point. I know that a duplex just sold for 30k more than what we could get this property for at the moment. Obviously it will require some money though with either of our options. 

    But you have definitely swayed me a bit back towards being unsure of which way to proceed.

  • Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
    7y
    @Allyson Straka 25 k for a fire escape stairs geez that sounds high get half a dozen other quotes before tearing your house to pieces and reducing rent income
  • Rental Property Investor · Upstate, NY · Member since 2012 · 3k+ posts · 3k+ votes
    7y

    I would definitely pursue the other quotes for the fire escape option as per @Dennis M.

    Taking out kitchens, baths, the old electrical panel, meter & redirecting the wiring could get expensive. I would approach the Bldg Inspectors & see if a complete fire sprinkler system would suffice & negate the need for an external fire escape. Some towns here are more lenient if a sprinkler system is installed. Having designed & installed one for a 3-plex that became a legal 6-plex I know it would be less than the $25k you were quoted for stairs.

  • Rental Property Investor · Upstate, NY · Member since 2012 · 3k+ posts · 3k+ votes
    7y

    here ya go

    https://imgur.com/gallery/jdERmcL

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