All Forum Posts by: Jonathan Satizabal

@Jamie Bergstrom

Nice! April and May are big months for people moving. Now you can have a lease that expires at the beginning of the peak rental season. Good Luck.

@Benjamin Rodriguez

It doesn't look like the ordinance will affect you. Your property already has legal non-conforming units on it. I've been reading through the The Municipal Code and I have not seen anything regarding existing coach houses or non-conforming dwelling units. 

It looks like the ADU Ordinance is meant for people that want to build new ADU's and Individuals with existing, illegal conversions.

Here's a link to the ADU Ordinance, Amendment to the Chicago Municipal Code.

26066.pdf (amlegal.com)

Materials 65 -90 - Labor 110 - 155. Just a Rough estimate.

@Robert Andersen 

There are exceptions in the code that allow for these units to be built legally and cost effectively. You are allowed to only have one exit if certain conditions are met. Table 1006.2 of the Chicago Building Code should cover most basement units with only one exit.

The Municipal Code of Chicago gives and exception that allows ceiling heights for Dwelling Units to be 6' 8".Look at the exceptions below.

14X-4-402 ARRANGEMENT AND MINIMUM DIMENSIONS.

14X-4-402.1 Minimum ceiling height. Habitable spaces, hallways, corridors, bathrooms, and toilet rooms must have a minimum clear ceiling height of 7 feet (2134 mm).

Exceptions:

1. Within dwelling units and sleeping units, a minimum clear ceiling height of 6 feet 8 inches (2033 mm) from the floor is allowed.

2. In any room beams, girders, pipes, ducts, furred spaces, or similar obstructions covering not more than 25 percent of the ceiling area may have a clear height of not less than 6 feet (1829 mm).

@Robert Andersen

@Jonathan Klemm It is good advice I do not disagree.

If I was starting out and I had a single family home with an illegal unit in the basement or a two unit building with one illegal unit, I would rent it out with out hesitation.

If it is truly an illegal unit then I 100% agree with @John Warren it is a cash flow play.

In my current situation I would not take that risk. 

What I struggle with is the label that is attached to these dwelling units. As @Brie Schmidt stated and I tend to the agree with, is that the majority of the units that are labeled Illegal are not in fact illegal but "non-conforming", which are actually legal dwelling units.

The problem is buyers, sellers or even agents don't know what the status is. People won't even apply for the zoning certificate because they're afraid it won't pass. The more I read the Chicago Municipal Code, the more avenues I see that will give you a non-conforming status.

@Jay Garrison If they have code violations or not is a completely different issue. I could build an illegal unit with absolutely no building code violations and probably pass it off as a legal unit. 

There are, I am just guessing, thousands of legal units in Chicago with code violations. There are legal units, in Chicago, that are completely uninhabitable. You will expose your self to more scrutiny by the city by having a non-conforming or illegal unit, I can can agree with that. However, I would much rather have a legal or non-conforming unit with building violations than an illegal unit with no building violations ( a verified illegal unit). 

If insurance is an issue I would contact my insurance agent to make sure that I am covered for any possible issues that may come up. 

I don't mean to sound crass but the verbiage in law is very intentional and I find it very fascinating. It is specified to reflect the intention of the authoritative body, their words can be specific or implied. The words that we use in casual conversation take another meaning entirely when spoken in the matters of law. That is why they are debating constantly. That is why they are defined specifically in the municipal code. The first section in any code is to define the words that they are using. They even go so far as to define simple conjunctions such as; and, or, and will. Because they are needed to provide a specific intention for the laws that they they are trying to convey.

None of us have the authority to label a unit/conversion as legal or illegal without going through the proper verification process. 

Personally, I will not take someone else word on the legality of a property without going through the process of defining it as so. 

@John Warren

The term "illegal" gets used a lot even by City Officials in their literature. There are true illegal units, dwelling units that were built with out permits and not built to any adopted building codes. And there are non-conforming units, units that were built with permits and conformed to zoning and building codes at the time of construction, but due to changes in zoning and building codes would no longer be considered legal if they were built today. The trick would be, having the ability to identify the two. 

Obviously there is still a risk, I believe you can mitigate that by keeping a safe and well maintained unit. 

Title 17 of the Chicago Municipal Code mentions non-conforming units. Title 17 defines the legality of units and is stated so directly on the application for a Certificate of Zoning Compliance.

I agree more with @Brie Schmidt, here is a portion of title 17 that would pertain more to dwelling units 

17-15-0100 General. 

17-15-0101 Scope. The regulations of this chapter govern nonconformities, which are lots, uses, developments or signs that were lawfully established but – because of the adoption of new or amended regulations – no longer comply with one or more requirements of this Zoning Ordinance. 

17-15-0102 Intent. In older cities, such as Chicago, many buildings and uses that were established in compliance with all regulations in effect at the time of their establishment have been made nonconforming by zoning map changes (rezonings) or amendments to the Zoning Ordinance text. The regulations of this chapter are intended to clarify the effect of such nonconforming status and avoid confusion with illegal buildings and uses (those established in violation of zoning rules). The regulations are also intended to: 

17-15-0102-A recognize the interests of landowners in continuing to use their property for uses and activities that were lawfully established; 

17-15-0102-B promote maintenance, reuse and rehabilitation of existing buildings; and 

17-15-0102-C place reasonable limits on nonconformities that have the potential to adversely affect surrounding properties or the community as a whole. 

17-15-0103 Authority to Continue. Any nonconformity that existed on the effective dates specified in Sec. 17-1-0200 or any situation that becomes a nonconformity upon adoption of any amendment to this Zoning Ordinance, may be continued in accordance with the regulations of this chapter. 

17-15-0104 Determination of Nonconformity Status. The burden of proving that a nonconformity exists (as opposed to a violation of this Zoning Ordinance) rests with the subject landowner. 

17-15-0105 Repairs and Maintenance. 

17-15-0105-A Nonconformities must be maintained to be safe and in good repair. 

17-15-0105-B Incidental repairs and normal maintenance necessary to keep a nonconformity in sound condition are permitted unless otherwise expressly prohibited by this Zoning Ordinance. 

17-15-0105-C Nothing in this chapter will be construed to prevent nonconformities from being structurally strengthened or restored to a safe condition in accordance with an order from the Commissioner of Buildings. 

17-15-0106 Change of Tenancy or Ownership. Nonconforming status runs with the land and is not affected by changes of tenancy, ownership, or management.

@Svend W. 

I thought about applying for a coach house over the garage for my place but the numbers didn't make sense. 

However, if I considered it as extra space for my family then it starts to look more interesting. You could consider moving my parents in if they needed a place at some point, if you have kids going to college locally it might be a good option for them to have their own space or even a guest house for family and friends when they visit. When you retire you could rent it out to supplement your income and add value in the long term. I think that makes sense. 

For people that are looking to add some income in the short term, unless the structure is already there, I don't think it's the best option.

Buy now, buy later, buy everything!

I'm mostly joking. I've been using this time to look at different areas and trying to find off-market deals.

I'm also looking into different financing options and networking with other investors to partner with.

There are still deals out there. I have not purchased anything since last February, mostly due to time constraints and a growing family, but there is still work you can be doing to grow your business.

Network with contractors, locate neighborhoods and drive through them, get your leases in order, work on your tenant screening process and find a good handyman that you call when issues come up.

Pin point some neighborhoods analyze some deals so when something comes up you know you have a good deal and you can ready to pull the trigger. 

My advice look for properties that are 1960's and above that just need cosmetic repairs. Single story or raised ranch homes are great for new investors. They're super simple homes and you can add value by refinishing the basements.

@Jamie Bergstrom, Have you had any luck finding a tenant?

Hopefully with a break in this weather you will see more people getting out to look at places.

I read that this is only available to owner occupants if the property is 3 units or less and they are only going to approve 3 ADU's per block. so if you're interested make sure your application gets in in early. The program starts May 1st 2021.

If it's four or more units then you don't need to be owner occupied. I also saw another company that has already adding units before this ordinance passed. They were turning six unit buildings into 8 units by adding the basement apartments.

Still good stuff though, there should be some potential there to add some value.