TLDR: Seeking advice on whether/how feasible purchasing a three-unit RT-4 to convert into owner duplex and one income unit is and still qualify for historic tax credit adaptive reuse incentives at federal and state levels, and welcoming any service provider recs to make it happen.

The property under consideration: an 1880s 3-flat with a full unfinished basement. Zoned RT-4. Is listed as a contributing building in a Chicago Landmarks neighborhood district.

The hypothetical plan: Turn floors 1&2 into a duplex for our family. Keep the 3rd floor as a rental for a few years. As our financial means grow, either a) recapture 3rd floor for our family use, and renovate the basement to be a garden apt (likely requires a dig out) or b) renovate the basement for our family use and keep 3rd floor as a rental.

The questions so far:

Re: zoning - Do we run into floor space ratio issues if/when the basement is converted to finished space, even though there will still only be two or three units total in the building? Already has roughly 3,600 ft floor space not including the basement. The lot is the standard Chicago size. If the ADU ordinance passes, does the issue of adding so much livable floor space rectify itself?

Anyone successfully sought and received the 20% federal historic tax credits for adaptive reuse on renovation costs applicable to the income-producing units? (For example, upgrading water service or wiring or a new roof for the entire building, a proportionate percentage of that should be a QRE toward the rental unit.) Where to begin exploring a qualifying reno that will meet NPS Secretary of Interior standards?

Has anyone done a historic rehab reno of their owner-occupied unit that qualified for the Illinois 8 year property tax freeze incentive?

I know a real estate attorney, historical consultant, architect and GC are all needed at some point. Who do I call first, especially since we don't yet own the property but it's still under consideration? The potential seller has unexpectedly responded to an "if you ever wanna sell" cold call from me. There is a lot of $ on the line and the property owner is an established landlord and real estate agent. Is there any benefit to involving a real estate agent on our side?

Pandemic has hurt the building and has had some vacancy issues as of late since the units usually rent to young 20-somethings with roommates who aren't renewing right now. COVID-19 has killed nightlife and social opportunities for that age group in the city, and it seems they are moving home with Mom and Dad. Could be the motivating interest in selling now.

We are seeking to meet our family's space needs and stay in our increasingly popular neighborhood with good schools and have a rental or two to help defray costs. At first glance, the landmark status seems to offer powerful financial incentives for a project like this. What don't we know that we need to know? (Besides everything!) Where to begin?

Chicago, Illinois

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