Multi-family Zoning Dilemma
Hi all,
I am looking into a small multi-family in Toledo Ohio. Here are the circs:
Purchase price= $58,800
Duplex with a partially finished third unit.
Two families currently occupy the two finished units, total monthly rental income=$725
Cost to complete the third unit=$5,000, it will rent for approx $275
Similar duplexes comp for around 70k, triplexes for around 80k
The plan: Buy the duplex, fix up the third unit, refi and pull initial $$ out. This will ultimately get me in for zero down and cover my fix up costs. It should cash flow after expenses approximately $300/mo.
The rub: In doing my due diligence I have discovered two things. It is listed in the tax records as a triplex (good thing). Zoning and planning both say the zoning limits that address to a maximum of two families (bad thing).
My gut tells me to pass on this and avoid future headaches. Before I do, can any of you think of a solution? (Other than apply for a zoning variance, which I have been assured I will not get) Have any of you had rentals with more units than zoning allowed? In this case would it be worth the risk?
Thanks in advance for your responses, Brian
I would pull the state records to see who owns the property, then phone or write them advising them of the situation. Most landlords welcome neighbors keeping in touch and keeping them aware of any occurring or potential problems. Hopefully a word from the landlord and the threat of an eviction will keep them in check.
Also, most leases have a provision stating tenants are to be respectful of neighbors, (i.e. not leaving a mess in the yard, being noisy, having alot of people over frequently, etc.)