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Just curious if anyone has done this type of conversion? And how much did it cost you and how long of a process? Particularly interested in 3-4 story single family to 3-4 family conversion.
* Major Milestones/Hurdles that needed to be achieved
In what neighborhood do current prices allow this to be profitable?
I see lots of conversions in the other direction, which is what you'd expect during a bubble, where sales prices get ahead of rental value because buyers (but not renters) are routinely willing to pay more now in the expectation of selling for more later to someone doing the same thing.
I'd be very interested to see an instance where moving from the sales market to the rental market is profitable -- that'd be an excellent sign that the bubble is over.
This would likely destroy value. Single family homes are worth more than apartment buildings. You are already starting in a hole, but add the $500,000+ investment and you are deeply in the red.
I do see that single family is selling for more now. I am considering living in part and renting out the rest so its not pure investment purposes.
Pawn -- Are you saying it would cost ~500k to convert 4-story single family to multi-family (2-3 units)?
Keep in mind that going from one-to-multi brings up lots of code issues. It's not like the early 20th century, when that kind of conversion meant just putting in sprinkers and a fire escape, besides the structural work.
If you like the idea of being a landlord, might want to check out stuff that's already multi-family, e.g. http://www.masseyknakal.com/listingimages/setup/pdf/25_West_71st_Street_Setup.pdf
Ask you question on brownstoner.com, understanding that experiences in Brooklyn need to be adjusted and 5 miles away in Manhattan will be more money. But this is defintely value destroying, and I doubt rental values could support the pricing. And, no, $500K is not going to renovate four floors of a townhouse
NWT -- Wow. That is a top of the line setup. I am thinking Brooklyn/Bronx/Harlem so much lower price point (and potential rent).
Can you look up in nyc website if there is air rights associated with a particular address/building?
Might be at http://gis.nyc.gov/doitt/nycitymap/template?applicationName=ZOLA
In addition to destroying value in the property itself, you're going to change the way the building is taxed, and not necessarily in a positive direction.
I'm with the other posters that suggest buying something that's already a multi-family.
DG Neary Realty
Very interesting. I don't seem to find air rights but everything seems to be there.
asking "How much will my renovation cost?" is like asking "how much does a car cost?" very wide range.
Look to see what zone house is in. R-6, R8, etc. Multiply land area by ratio. That is max. buildable. Look in ACRIS to see if any have been sold (unlikely if you are not close to a high rise). Then street width and neighboring bldgs determine whether sliver law applies. Landmark laws will also come into play.
So R7-2 means I can build up to 7 stories (so if its 4 stories, I can add up to 3 more?)
OR are you saying, land area is 1550 sf and current structure has 4000 gross floor area sf. So I can do 7x 1550 = 10850 gross floor. 10850 / ~1000 = 10 stories.
IMO, you should 1st contact an expeditor &/or an architect to see if this is legal re: zoning, etc. If it's legal, then, as Ali said, consider the change in tax status: you may be taxed (assessed) as commercial. If that's acceptable, then contact a contractor & get a bid & see if it's worth the cost. The entire project will probably be costly & time consuming.
"I am considering living in part and renting out the rest so its not pure investment purposes."
maybe just buy a 2 family house.
"OR are you saying, land area is 1550 sf and current structure has 4000 gross floor area sf. So I can do 7x 1550 = 10850 gross floor. 10850 / ~1000 = 10 stories."
IMO, if you're not familiar with this stuff, you need to hire a professional to advise you.
"So R7-2 means I can build up to 7 stories (so if its 4 stories, I can add up to 3 more?)"
Not necessarily. Zoning resolutions & districts can be very confusing because there are many exceptions & gray areas. I once had to hire an expeditor-architect to interpret the zoning as if he was a Talmudic scholar. So, please don't think that R7-2 means you can, by right, build X. Ya have to get a professional.
"...to interpret the zoning as if he was a Talmudic scholar."
dwell -- Thanks for your words of caution. Of course I will hire professions before I do anything. But I just trying to understand (in ball park sense) what is the general impact (cost, time, major hurdles). Actual execution (if I move forward) will involve getting estimates and employing expeditor, architect, contractor, etc.
Why would 2 or 3 family be considered commercial? Even if my intent is to rent out the other unit(s), its still owner occupied real estate. If the ground floor was a business, its still would only mixed-use zoning... Which I am not considering.
Truth, it's true. I wanted to renovate & thought I could do so as of right, then it seemed I couldn't, but then, expeditor-architect-Talmudic scholar found that, according to some "affordable housing" law, I could, but, I wasn't building "affordable housing", but, no matter cuz that law allowed the renovation. Zoning laws can be like hieroglyphics, so ya need an expert.
"Why would 2 or 3 family be considered commercial? Even if my intent is to rent out the other unit(s), its still owner occupied real estate."
I'm not sure it'd be re-assessed as commercial. Ya have to look that up at NYC Dept of Finance (RE tax assessment) or ask a Tax certiorari lawyer.
I'll say this: IMO, if you buy a TH & do this reno, you will need a lot of cash. Cost will depend on the condition of the bld: As the work progresses, ya may find that some joists & plumbing lines need replacement, so boom, there goes another $10k, $20K, $50k.
Going back to your original proposal: "Particularly interested in 3-4 story single family to 3-4 family conversion." So, you want to convert a single family to a multiple dwelling? Then, I agree with the posters above that this will probably diminish the bld's value because most people seek to do the reverse with a townhouse: Convert a multiple dwelling to a single family.
Maybe you should be looking at 2 family houses where you live in one unit & rent out the other.
I believe you, dwell.
dc10023: As with all real-life situations and choices: simplify.
As dwell suggests: there are nice 2 family houses for sale in very good neighborhoods.
Many are owned by people who really want/need to sell:
They are retiring and want to move, out of state or wherever.
Others are heading for the 'burbs.
Yep complicated but it looks like 3.44 if not any of (a) with 100 feet of wide street (b) manhattan core (c) Inclusionary Housing
If not (a), (b), (c):
does not sound easy as, "One, two, three"
nor simple as "doe, re, me,..."
A nice 2-family, well priced, in a good neighborhood:
"that's how easy (life) can be..."
Good luck with whatever you choose, dc10023.