Convert a duplex into 4plex in R5 zone

[Mike Meerschaert]

Hi,

I own a Duplex in North portland, and each side has a finished upstairs with 1026 sq feet, a 726 sq foot unfinished basement, and a 300 sq foot garage. I'm considering finishing the basements on both sides, and turning them into 1br units, so building out a bathroom / bedroom / kitchen downstairs on each side.

Does anyone know if it's legal to convert a duplex into a 4-plex in an R5 zone? House Bill 2001 makes me think it might be possible, but I don't know for sure. I reached out to Portland BDS but haven't heard anything back yet (been about a week) so i was hoping someone on these forums might know.

As for the numbers, I've spoken with a local property manager and they think it'd add between $31k - $38k in annual rent, and I've spoken to a contractor they estimate it'd cost around $180k, so that'd be between 17% - 21% ROI, so it's kind of a no brainer if it's legal and I can secure funding.

As for financing the construction, I have excellent credit, and some equity built up, so I'm considering using a HELOC with a 95% LTV, Does that sound like a good idea? Anything I should be aware of? Or should I consider something else? It's my first investment property so I'm kind of figuring this all out for the first time.

[Brad Hammond]

Sounds like a slam dunk @Mike Meerschaert.  I converted a 4-unit into a 5-unit in N. Portland a couple of years ago.  Hit me up if you want to get into the nitty-gritty of it.  If I recall, it is not just the zoning they look at but how many people will be living on the entire lot.  I had to go into the permitting office to find that out.  Applying for the permit of occupancy triggers A TON of other things that need to be done and the permit cost me about $13,500 for a studio.