Exciting Multifamily/ADU Changes Coming to Charlotte This Year!!

[Evans Wright]

Hey Everyone,

Charlotte has been a desirable market to invest but also presents it's challenges. With the rise in real estate sale prices and interest rates, it has made it harder to find cash flowing properties. This is most applicable in cases where an investor wants to come in, buy a turnkey/low value add and turn it into a Long Term Rental. Listed for sale multifamily property, forget about it... In most cases for a property to make money, you either have to get creative on your rental strategy e.g. MTR, STR if allowed or get creative on the acquisition side e.g. seller finance, sub to, etc. These are great options for sure but I wanted to share with you all a few big changes that are being implemented this year. This info could help give you an advantage if you are interested or already investing in the Charlotte market.

Below is a link to the new City of Charlotte Unified Development Ordinance going into effect on 1 Jun 2023.

https://charlotteudo.org/wp-co...

Why should you care about this...

1) You can build up to a triplex in any residential zoning area or quadplex if the property faces an arterial road

2) You can build an Additional Dwelling Unit up to 50% of the square footage of the primary residence if it is separate or 40% if attached

3) You can build additional units to the next highest zoning density provided you designate them as affordable living

This is a massive document, over 640 pages but have no fear I have provided links to the parts that most investors would care about below.

Shoutout to @Christopher Aranguren for making the links to the direct pages. If you ever need a patent attorney, he is your guy.

I love to provide value and help others build wealth. Feel free to provide your comments and share with others who are interested in investing the market. If you need any help investing in the area or would like to have a chat, connect with me and we will set up a time. Cheers to a great 2023!

[Christopher Aranguren]

I feel a lot of people, newbies especially, really undervalue the effects of change and the opportunities it brings. This is particularly true in answering the age old questions of "how do I break into this real estate thing" or even "how do I scale from where I'm currently at." Changes are always very cool because it provides opportunities to find what has become undervalued because of the change.

In my opinion: The UDO changes include some of the best opportunities for both new and experienced investors to leverage that I have seen in the few years I've been here. I hope that other players (particularly the small ball and individual players in the space, which includes me too!) get to yield something positive off of leveraging these changes, and ideally simultaneously better the affordability and other housing crisis related issues that have definitely become straining in the city as of late. For example, whereas an even moderate multi-family to large multi-family player has their own benefits with respect to building out larger planned projects, smaller players now have the time to create reduced competition based on the questions of: do the changes make certain lots or existing properties that you looked at/are looking at have a greater value proposition that you can perform on? Is a duplex (or bigger) build out on a piece of existing land or house you own now an option for a reasonable return? Does a change in existing renovation plans now make sense that didn't make sense before? Is there an underappreciated new HBU in certain areas over others that can be captured and may not be as competitive as "just investing in [some criteria]" generally and fighting with everyone else just operating without considering through such a lens? I guess put simply, change means you could find a new niche to try and operate in that may be undervalued without due consideration. Probably these effects would fade out over time, but that's still a worthwhile consideration if/while the gettin's good.

Also, quick comment on the actual effects the UDO itself may have broader CLT market: I really hope people take advantage of it and that the city can encourage positive density changes to address housing affordability while managing to actually keep up with suitable infrastructure that supports the changes in density. Charlotte has struggled to maintain on the infrastructure front in my estimation. I also hope it's embraced without significant successful NIMBY pushback. Guess time will tell