Author Topic: Building townhouses in place of an older duplex - good or bad idea?  (Read 1009 times)

Sea Mom

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Hi all,
My husband and I have been loyal followers of MMM since early 2013. Besides the hubby's job, we are landlords and have focused on paying off our mortgages. We are due to FIRE in about 4 years.

We own a duplex, which we just paid off last year. It has a desirable location in Seattle and has been a good money generator. However, the house is older and due for some costly repairs (sewer issues, new windows, new fence, etc). The lot is decent size - about 5,000 sq feet, much of it occupied by a sloped backyard and a neglected garden.

We are thinking about the possibility of building townhouses in its place, both for the challenge and the income they would generate eventually.

In order to finance the project, we would likely have to take on new debt and put off FIRE. I'm estimating the additional income would be somewhere around $3000 per house/month, and you could build 4, maybe 5 townhouses on the lot. We currently make just under $4K/month in rental income on the duplex.

Any advice or feedback would be helpful. Mostly I'm just wondering what kind of an undertaking this would be, and if the additional investment would be worth putting off FIRE a bit. Thank you in advance!

slugsworth

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Re: Building townhouses in place of an older duplex - good or bad idea?
« Reply #1 on: July 21, 2015, 07:45:29 PM »
What is your zoning? I think that knowing how many units you could build would be pretty key.


Another Reader

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Re: Building townhouses in place of an older duplex - good or bad idea?
« Reply #2 on: July 21, 2015, 08:00:54 PM »
Have you talked to the City planning department to see if this is feasible?  I don't know anything about zoning in Seattle, but I cant recall ever seeing 4 or 5 townhouse units on a 5,000 square foot lot.  You would likely have to meet setback and off-street parking requirements.  If you have examples of that type of project, could you post the details?

slugsworth

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Re: Building townhouses in place of an older duplex - good or bad idea?
« Reply #3 on: July 21, 2015, 08:08:09 PM »
Multiple townhouse units on a 5,000sqft lot in Seattle is very common assuming low rise zoning - typically the developer meets the green standard and squeezes in a "4-pack". Here is a link to the basic zoning requirements (caveat there were some recent changes, but this is still pretty accurate)

http://www.seattle.gov/dpd/cs/groups/pan/@pan/documents/web_informational/dpds021571.pdf



Another Reader

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Re: Building townhouses in place of an older duplex - good or bad idea?
« Reply #4 on: July 21, 2015, 08:25:55 PM »
If the maximum density is 1 unit/1,600 sf lot area, the maximum number of units would be three for a 5,000 square foot lot.  Given the lot slopes to the back, you might have a challenge accomplishing that. 

Off topic, I would never live somewhere that did not require off-street parking.  It would be like the older areas of New York or other cities built before cars were common.  Parking is a nightmare as is the traffic in those cities and in newer cities where politics outweigh common sense.  People will bring their cars, whether you provide parking or not.  They will just park them on the street.

Sea Mom

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Re: Building townhouses in place of an older duplex - good or bad idea?
« Reply #5 on: July 21, 2015, 10:10:19 PM »
Thanks everyone, for your help so far.

Our Zone Code is: SF 5000 (Single Family)
http://www.seattle.gov/dpd/cms/groups/pan/@pan/documents/web_informational/dpds021570.pdf

I have not spoken with the city planning department just yet. Right now getting any advice regarding the positives and pitfalls of potentially doing this would be helpful

Sea Mom

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Re: Building townhouses in place of an older duplex - good or bad idea?
« Reply #6 on: July 22, 2015, 11:01:12 AM »
Hi guys - the zoning issue aside...(which I'm working on)... Does anyone have any experience actually building townhouses as an investment to manage later? I want to move forward, but I need to know what to expect.

Thank you again for any feedback! It's much appreciated.

slugsworth

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Re: Building townhouses in place of an older duplex - good or bad idea?
« Reply #7 on: July 22, 2015, 11:45:01 AM »
@ another reader, if you meet the green standard, there is not a minimum lot size. However, parking is required - 1 space per unit for townhomes/rowhouses. Which is typically provided as a garage on the 1st floor.

Parking is an issue in Seattle and the politicians are pretty decidedly against it.