Buying duplex half at a time

[samy2576]

Ok so here is a situation. Say someone is selling a house, which is a duplex, for $66k. They also have the unoccupied side of the house listed at 33k. (The other side has tenant the that matters.)

Then say someone is interested in buying the whole property but is still finishing school and have only been approved enough $ to buy the one side.

Could that person buy the one side and then in a few months (after graduation and getting new job) buy the other side if the seller agrees to wait for that?

[203bravo]

Yes it could be done --- would be the same as buying any other attached or semi detached family home.  Make sure to get everything on contracts - it would not be very good if the seller gets tired of waiting and sells the other 1/2 before you can close on it.

[chasmith]

It depends how the house was built and platted, and zoning.  Many times a duplex isn't built to be two truly separate properties, and the land is a single legal lot.  If that's the case some work and expense will be needed to make two separate properties to sell.

[samy2576]

I'm assuming its already set up that way. He has the one side listed seperately.

[chasmith]

Then there shouldn't be a problem doing the transaction.  But buying the second property standalone means you will be buying it as an investment property not a residence.  Buying 2-4 unit homes can be treated as a residence as long as the buyer occupies one unit.  That would mean a higher down payment and interest rate.

It would be worth exploring whether the buyer could be approved for the additional $33K when considering the rental income.  Usually for a 2-4 unit some percentage (80% ?) of the rent is added to the buyer's income in determining borrowing capacity.

[203bravo]

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@chasmith wrote:

It depends how the house was built and platted, and zoning.  Many times a duplex isn't built to be two truly separate properties, and the land is a single legal lot.  If that's the case some work and expense will be needed to make two separate properties to sell.

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 it is probably only platted on one lot - but it's a very simple process to get this corrected and should take less than a week to get it corrected.  At least that's been my experience.  This is how buildings are apartment complexes one day and condos the next.

[Ryanflier1]

I have a duplex and I would be careful about buying only one side at a time without a solid written contract from the owner. If you get stuck with owning only one side it could be more trouble than it's worth. I can't imagine if someone owned one of the sides of my duplex, every decision for the building and property would have to be mutually agreed upon by the two owners. Is there an HOA set up? If the owner is willing to wait a few months to sell you the property then you might ask if they are willing to do an owner contract on the other side until you can get a loan to pay them off.