All Forum Posts by: David Triplo

@Elliot Rudmann I've given them over a month to get paperwork and everything in order and they were still unable to make it happen.  They provided copy of the zoning cert, tax documents and pictures of the unit showing ingress and egress.  I don't know why they didn't provide the water docs.  It seems that's a likely way to get it changed.  Possibly the change was done after 1957?

The offer was almost for 200K less than original so I pretty much priced in the difference, but I still would prefer a legal 3 to remove any possible headaches in the future.  

Each unit has its own meter/box and tenants pay for central heat and air for each unit.  I also confirmed there is no violations on the building today. 

I appreciate all the advice. Since my time is running short, I put in an offer of it being a 2 flat today. Let’s see if he accepts it. It’s a fair deal, but not sure if he sees it that way. I’m sure he’s pretty salty about the circumstances he’s put in. 

If they never pulled permits for the 3rd unit, would I ever be able to get legal building work done on my place? While it is a gut rehab, I wouldn’t want to be in a situation where I can’t fix my home. 

The property is zoned RS-3 according to the City of Chicago zoning map.  The email chain between the seller's attorney and the zoning board stated it has 2 legal dwellings and did not recognize the garden unit.  The zoning board claimed it was illegally converted to 3 units without permits.  This was determined right before closing.  After that, they hired an expediter to attempt to fix the problem and we delayed the closing.  

One thing I don't understand is how they can tax the building, charge water and garbage all as a 3 flat, but not legally zone it as a 3 flat.  There is an identical looking building one block over that is zoned as RT-4.  The seller really got screwed on that deal for the past 15 years.  

David, thanks for the long reply. The work sounds exhausting but the premium is substantial. The discount would be between 150-200k range. I know I could kill the deal. I would assume the seller did due diligence in his month to make the conversion happen and realized the likelihood of converting is low. But  based on what I know he’s a bit of a hothead and may not be rational. I talked with a zoning attorney but he only laid out the facts and didn’t give suggestions as he didn’t have the historical docs or officially representing me. I just don’t want to blow money on a zoning attorney since I don’t even own the property. I would like an analysis of likelihood of being able to convert to a 3 flat. 

I'm in the process of buying my first rental property in Lincoln Park and in a sticky situation.  The owner claimed it was zoned as a 3 flat, but the zoning certificate came in as a 2 flat a few days before closing.  The owner said he bought it as a 3 flat, it's taxed as a 3 flat and have paid water as a 3 flat for the 15 years he owned the property.  I did see a document from the city stating he didn't pull permits when he did some rehab work for the building.  The illegal garden unit is over 7.5 ft ceiling, has 2 exits (1 into the common laundry area for 2 units and outside exit), and have windows in all rooms.  The building has 2 parking spots, but possibly could pull off 3 if it's tight.  The surrounding blocks are designated for 3-4 flats and just this particular block isn't for some reason.  We were suppose to close at the end of the year.  I've given him a month to get the property rezoned but his expediter was unable to make the change.  

The seller decided to drop the price substantially as my rate lock deadline is approaching and I'm debating what to do.  I could probably get him to agree to a price where my cash flow would barely be positive as a 2 flat, but would have substantial upside if I was able to re-zone it.  Also, the garden unit is currently rented and they are great tenants and want to renew.  To reduce risks, I would be willing to move into that unit as all 3 are turnkey nice units.   

Does anyone have words of wisdom on the rezoning process?  Or if it's worth it to purchase a property knowing the main upside is in the rezoning?  I know an admin adjustment, a zoning change or a potential overhaul on zoning rules is possible in the next year or 2.  I'm also viewing it as an ability to live for free in a nice area where I would want to live anyways.  I am slightly concerned on resale value as well.  I'd appreciate any advice.    

This was my response from my lender regarding the kick out clause and my intentions so I'm assuming I have some flexibility and can request after closing.  

"Your intent needs to be to occupy the property. Ideally you would move into the property within 60 days but we cannot control your personal timing. Most lenders would mandate and verify your occupancy."

I'm strongly considering buying my first 3 flat in Chicago and have an issue and not sure how to best approach it.  Currently all 3 units are rented out through July of 2019.  The one unit I would live in has a 75 day kick out clause.  In the ideal world, I would move into the unit April 1st to have an easier time renting my current unit and give myself and my current tenants time to move.  But owner occupancy laws state I need to move in within 60 days.  First, is it possible and responsible for the current owner to give notice before closing?   Second, if I were to ask the tenants after closing and would make it closer to 90 days, is this really a big issue?  I know it violates the timing of the owner occupancy clause but I'm intending to move into the unit within a reasonable time.  Does anyone have any other solutions?  I appreciate the help!