I`m looking into a duplex that is an illegal four plex. The property is in Grande Prairie. The city doesn`t look interested in changing the zoning. The property doesn`t cash flow with out the two illegal suites. Should I stay away from the property? Any advise would be great.
illegal four plex
- Thread starter ronda
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- Jan 14, 2008
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QUOTE (ronda @ Feb 19 2008, 10:37 AM) I`m looking into a duplex that is an illegal four plex. The property is in Grande Prairie. The city doesn`t look interested in changing the zoning. The property doesn`t cash flow with out the two illegal suites. Should I stay away from the property? Any advise would be great.
Hey Ronda,
Great question, I think many investors may have the same question. My advice is to be `Aware` of what you are getting yourself into - as in any purchase but most importantly know what risk you are taking on if you decide to move forward.
To be honest, we own a few properties (SFD`s and 4Plex) that are considered `illegal` or `non-conforming` meaning if our building burnt down we would not be able to rebuild the same type of property (it would have to conform to current zoning). However we calculate out the worst case scenario and ask ourselves `What if...`
The worst case scenario that could happen is the city inspects your suite and shuts it down, leaving you with the ability to only rent to one family for the entire unit. (what would cash flow look like at that point?). Its important to be pro-active in your municipality as many have to it on their plates right now to legalize basement suites due to very low vacancy rates.
The worst case that has actually happened to us, was the city called us up one day asking us very detailed questions about a specific property, she was very clear that we are not allowed to have a separate unit downstairs, or a basement suite but specifically there must be no stove installed. We did not currently have tenants in this suite and let her know that our property was vacant and she basically said we have been warned - so at this point we decided to market to a larger family who would need the whole house but price it according to them utilizing both suites - which helped cash flow.
The main reason the city will try to shut down your illegal suite is because of complaints, and these usually come from neighbourly disputes or parking problems.
So I wouldn`t recommend running away, but just be aware.
Hope that helps
Dan
Hey Ronda,
Great question, I think many investors may have the same question. My advice is to be `Aware` of what you are getting yourself into - as in any purchase but most importantly know what risk you are taking on if you decide to move forward.
To be honest, we own a few properties (SFD`s and 4Plex) that are considered `illegal` or `non-conforming` meaning if our building burnt down we would not be able to rebuild the same type of property (it would have to conform to current zoning). However we calculate out the worst case scenario and ask ourselves `What if...`
The worst case scenario that could happen is the city inspects your suite and shuts it down, leaving you with the ability to only rent to one family for the entire unit. (what would cash flow look like at that point?). Its important to be pro-active in your municipality as many have to it on their plates right now to legalize basement suites due to very low vacancy rates.
The worst case that has actually happened to us, was the city called us up one day asking us very detailed questions about a specific property, she was very clear that we are not allowed to have a separate unit downstairs, or a basement suite but specifically there must be no stove installed. We did not currently have tenants in this suite and let her know that our property was vacant and she basically said we have been warned - so at this point we decided to market to a larger family who would need the whole house but price it according to them utilizing both suites - which helped cash flow.
The main reason the city will try to shut down your illegal suite is because of complaints, and these usually come from neighbourly disputes or parking problems.
So I wouldn`t recommend running away, but just be aware.
Hope that helps
Dan