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I am interested in buying a duplex, 2 units (2 deeds) for sale by the same owner.
I would live in one unit, tenants would live in the other.
I cannot buy both with the same mortgage--I would have to get two mortgages.
So, I am thinking of buying one side with cash. Since it turns out that the owner-occupied side will have lower interest, I want to buy that side with the mortgage, and pay cash for the side the tenants occupy.
How would this work out for tax purposes? Does it matter? I want to deduct as much as possible of the 11,000/ mo the tenants will pay--but does it matter that I have do not have a mortgage on their side?
Thanks for the info. I originally thought I could buy with one mortgage--but now, the lenders is saying no. I am calling around to find other lenders. Buying with one set of closing costs would save me a lot of money.
It is one house--but two deeds.
The property has never been sold--it was originally an old farm house, now made into a two family home. (As I posted before--it doesn't have a firewall.)
The issue with the lack of proper isolation between the two units would seem to preclude the ability to have two deeds. This sounds like a mess. I would avoid such a situation. Seriously. If this were other than the "first subdivision" I might try to work something out but given the difficulty so far I would be extremely worried that you would have some nightmare down the road...
If the seller "had some friends at the courthouse" or anything else like that you might be in for a world of hurt.
The issue with the lack of proper isolation between the two units would seem to preclude the ability to have two deeds. This sounds like a mess. I would avoid such a situation. Seriously. If this were other than the "first subdivision" I might try to work something out but given the difficulty so far I would be extremely worried that you would have some nightmare down the road...
If the seller "had some friends at the courthouse" or anything else like that you might be in for a world of hurt.
I asked at the municipal building about ten times if they have any problem with no firewall, and they said no problem. But that was on the phone.
I'll drive down to the municipal building tomorrow and try to really pin them down. The property has never been sold (always in one family) so I don't know why it needs two deeds.
In all honesty, it would be easier if it was classified as one home with two apartments. It seems to be mistakenly classified as a duplex with two deeds.
I called a mortgage broker and he said try to get it classified as a two family home--not a duplex. So I will.
The reason I am still nudging around this property, trying to buy it, is because it's pretty cheap. Except for a few lonely exceptions, this property included, people are still defending the 2006 pricing around here, but I suspect that bubble will surely pop and I don't wish to buy an expensive place just before it does, so here I am looking at these 'dog' properties.
When you hang around dogs you gotta be prepared for the inevitable "misplaced nip" -- I just hope you don't a chomped in the rear!
As I recall, the lender that had the issue with the "firewall" seems to be at least as big a problem as any "real" issue. If the mortgage broker DOES find another source of funding I would be sure that you QUADRUPLE check this place out -- if it turn out that something is "not right" for future sales that might scare off any buyers I would hate to see you lose your shirt ... or worse!
When you hang around dogs you gotta be prepared for the inevitable "misplaced nip" -- I just hope you don't a chomped in the rear!
As I recall, the lender that had the issue with the "firewall" seems to be at least as big a problem as any "real" issue. If the mortgage broker DOES find another source of funding I would be sure that you QUADRUPLE check this place out -- if it turn out that something is "not right" for future sales that might scare off any buyers I would hate to see you lose your shirt ... or worse!
When you hang around dogs you gotta be prepared for the inevitable "misplaced nip" -- I just hope you don't a chomped in the rear!
As I recall, the lender that had the issue with the "firewall" seems to be at least as big a problem as any "real" issue. If the mortgage broker DOES find another source of funding I would be sure that you QUADRUPLE check this place out -- if it turn out that something is "not right" for future sales that might scare off any buyers I would hate to see you lose your shirt ... or worse!
Well, no one but me seems to have issues with the firewall, not the lender, insurance company, municipal inspector, my lawyer, etc. The lender wants to handle it as two properties, and charge me two sets of closing costs--but has no problem with the firewall issue.
I do understand what you mean by future buyers. I will research this very carefully. I am not under contract, only thinking of buying, but the place is in such an incredible neighborhood that I could never afford otherwise and my realtor negotiated such a low price, I don't mind spending a little money on my lawyer just to see if there is something here worth pursuing.
But thanks for the advice and I will not move fast, at any rate.
Well, this probably now belongs in real estate, but I'll just update.
I went to the municipal building this morning, and honestly, the guy lost his temper with me. He shouted: You've asked me over and over! But , in fact, he never really answered. So finally, I got this out of him:
This is a semi detached house. (not a duplex) He says, at the time of the subdivision (now I understand what that word means) he imagines that red brick was put between the walls, because the house would not have two deeds, two sewers and two tax liabilities if it hadn't been subdivided correctly, and red brick is required to do it correctly. He says it is okay that the attic doesn't have a firewall. (This is what the inspector noticed.)
He says it's okay the basement doesn't have concrete between the two units (inspector also noticed this)
He also said these types of houses are all over town and he recommends I buy it if I like it.
Well, I am still a little worried, because this is a big purchase, so I kept pressing him, and he says I can go to the county clerk and get the details of the subdivision. I called the county clerk, and they don't know what he was talking about--they have only the deeds but no details, they say municipal building has those records.
So at least I made a little progress.
And annoyed some people.
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