Illegal 4plex. Should I pursue?

[Chris Payne]

Hi BP Fam,

I came across an interesting REO this week. It's a legally zoned duplex that has been (illegally) divided into 4 units. The property is huge, consisting of a 4/2 house in front + a 6/3 house in back. It's listed for $157,000 and needs a good amount of work. It also has at least 1 lien. I have several questions...

Should I evaluate this deal as a duplex or 4plex when putting together an offer?

Should I rent all 4 units or convert back and rent as a duplex?

How do I find comps for a property like this? It's unique in size and structure for the area.

How much time and money would it take to get this changed to a legal 4plex, if at all possible?

[Max T.]

If it is anything like in Philly, you will not be able to get rental licenses for the illegal units, and will never be able to use the courts for an eviction.

It will also be impossible for a buyer to finance this property without FIRST converting it back to a duplex. This can be done by getting rid of a few appliances and doors.

Changing it to a legal 4 plex (if in Philly) would require a zoning variance. This process includes several steps, the first being a neighborhood community meeting and vote. Not a sure thing.