Chicago conversion 2 DU to 5 DU with zoning change

[Chi Zhang]

Investment Info:

Large multi-family (5+ units) buy & hold investment.

Purchase price: $400,000
Cash invested: $450,000

Orig a mix-used 2 unit in B1-2 zoning, a zoning amendment was obtained to up zone to B2-3 within TOD district, which allowed for total of 5 units with increased total bldg sqft. Zoning amendment took about 1 year. Rehab/addition took another year. Initial purchase $400k, rehab cost $850k, current appraised value $1.5Mil. Monthly gross rent $10k.

How did you finance this deal?

Cash orig purchase. Commercial 70% LTV loan on rehab cost.

How did you add value to the deal?

By obtaining the zoning change, with the combination of the location being in the Chicago TOD district, the unit count was increased from 2 to 5, and total new rentable sqft of 6000 sqft, with zero commercial component.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Blueleaf Lending, Tyler Knudsvig