Can I rent out 4 physical units in a legal 2-unit apartment building?
I have received an acceptance from the seller my cash offer (no mortgage loan involved) for a foreclosed 2 flat, which currently has 4 physical units (1st flr has 2 units, 2nd floor has 2 units). While the price is reasonable and the seller made clear that the tax record says the property is a 2 unit and is sold as a 2 unit, seller is responsible for any un-premitted units or repairs required to obtain permits to make them legal units. I like to spend as little as possible to rehab the place to generate rental incomes for the next few years. My questions are a) can i legally rent out the 4 physical units? b) what are the cost implication down the road when i like to convert them into 4 condos to sell? c) Is it more likely that I may be asked to convert the 4 units to 2 units or would i just need to spend $ to get the 4 legal units certificate of Occupancy. I like to avoid or minimize significant headache or costs with City inspector etc.. The property is a "RS-3"
There is only way to legally answer this question. Plainly and simply call the Department of Zoning for the City of Chicago, which anyone would have to do to proceed with this properly. The number is 312.744.5777, and explain the entire situation.They will give you an answer, and this will cover your tail.
I question your ability to determine that the price you negotiated is 'reasonable' if you do not understand that you simply cannot create ILLEGAL units into legal ones!! The owner told you that the building is a legal 2 flat. With RS-3 zoning you cannot make the other 2 units legal....period.
I think you need to speak with an experienced real estate agent to explain the real estate facts of life so you can better understand how to purchase an investment property. I would love to help.
Good Luck!
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