Arlen and Edward - thank you both for helping me identify the right questions to ask. Some additional context:
-It's R2/50 zoning, North Fair Oaks, I've confirmed 2 units plus ADU are allowed. There are several small multifamilies on my street (many through the PUD process). It's also unincorporated and thus handled by the San Mateo county (not Menlo Park City) department.
-I agree that splitting the lots would be difficult, not because of neighbors (I think Palo Alto operates a little differently from unincorporated Menlo Park in that regard) but because splitting would result in substandard lots (<5000 sq ft each) which the county is unlikely to approve.
That's why I'm trying to understand condo conversion, which by my understanding doesn't necessitate the splitting of the lot/land. In other words, with a condo conversion each owner would own their own unit and either a percentage of ownership of the common lands, or an HOA would own the common lands (I'm not completely clear on those latter details).
-Arlen, thank you for prompting me to clarify my goals. Renovating the existing unit is not feasible (too tiny and too old).
Ideally I'd like for my retired parents to live in one unit and have the option to sell the second unit (as you mention, an attempt to making the living area as close to free as possible). Other scenarios are 1) Parents live in one unit and collect rental income (this will help but not make the living area free), or 2) Build and sell off. I would rather NOT sell off immediately given the continued projected market slowdown, but if that's by far the best option then we're open to it.
The most optimal goal will depend on market factors and the answers I am seeking here - that's why I'm not stuck on any single rigid goal that might end up being suboptimal. E.g. if condo conversion or some similar alternative is not possible, I will revisit my plan to identify the next best option which might be building and selling a SFH.
Note: I am operating under the assumption that two separate units will amount to more than a single SFR. Example, two 1800 sq ft units would sell for $1.8M each whereas one 3600 sq ft SFR would sell for $3.3M+. Please stop me if this is a dangerous assumption to make.
Edward, you bring up a good point - that an SFH w/ rental unit in W Menlo Park might command a higher price point than a duplex. But what about two separately sold detached homes of "condo" status? This property is in "Menlo Park" and the 94025 zip code, but this street has many duplexes and triplexes and some scattered SFHs and multiplexes. So I'm having trouble envisioning someone dropping $4M+ for a largish SFH + ADU on this street.
Arlen, thank you for the information on setting up an HOA. What kinds of professionals can I consult to ensure I'm going about it the right way?
Many thanks for reading!!
