Free advice on the internet is only worth what you paid for. But buying or selling only one unit in a duplex requires TIC ownership. Something fraught with issues. One being the lack of financing and liquidity. Legal issues may arise between owners.
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There are 2 unit condo’s everywhere. The conversion issues are splitting the lot into two APN’s, getting a lawyer to complete governing HOA’s, insurance, etc, etc, etc. This assumes that you can first get financed!
Should put the cart behind the horse here. The steps are 1) Get loan approved prior to finding a property. 2) Only look at properties you qualify for. 3) If you don’t qualify for what’s available, start saving cash - because a higher income might not be coming in the time frame you are wanting to buy.
Once you have the qualifying, cash to buy, and the price range that yields enough property to consider (SFR, Duplex, etc) then and only then can you buy. Wondering about how to split a duplex into a 2-unit condo project, or what it’s like to be a landlord, is nice to wonder about, but is not a purchase strategy.
Any multi-family you’re considering buying will not take into consideration income from the second / third unit. You have to qualify for the entire thing. In this age of rent and eviction forbearance, multi family financing is not all that easy to find as a FTHB. Refi? Yes. Purchase if you have more than 1 rental unit already? Yes. No issue. These profiles however do not sound like the case here.
Have you opened up to the possibility of purchasing a Condo if it’s a 2-3 unit project? I know many internet searches exclude Condo’s, but adding it into your search parameters isn’t a bad idea. Most Bay Area homes are practically Condo’s given the density of housing out there.
Thanks for reading
LbJW
Condo conversion is impossible in SF. That is why there are so many TICs
Impossible because of preventative law, or impossible due to bureaucratic sloth? I know ADU’s were shunned by cities, but the State opened up a way forward for homeowners to build them. Would allowable condo conversion be an issue requiring State intervention?
I’d thing there would be a more welcoming environment for a duplex split into two owned units rather than 1 landlord, one tenant.
Thanks for reading
LbJW
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Hey, LbJW. Thanks very much for a terrific elaboration of the purchase process for multi-family properties. That was a learning experience for me. Here are my three followup questions. First, wouldn’t it make sense to find another co-buyer who qualifies for half the amount of the duplex and then start seeking loans? A second buyer to go in on a duplex might satisfactorily satisfy the three conditions you stipulate, and we go into the process, pre-qual letters in hand, without wasting anyone’s time. Then, if that does make sense, are there any companies or RE agents who might specialize in bringing buyers together? Finally, can you expand a bit on what you mean by “purchasing a Condo if it’s a 2-3 unit project”? Are you talking about the regular TIC arrangements for, say, older houses that contain two or three units? I’ve found one listing for a 4-unit building for which the agent is trying to get four buyers to make up a TIC property. (The building is still tenant-occupied, so I passed.) If that is what you mean, then that’s exactly what I’m looking for. If so, then, again, are there agents or companies that act as go-betweens to put such deals together?
By the way, I really like the modesty of your sign-off. I hope you don’t mind if I borrow it sometimes for my posts.
Settle what needs to be fully understood - what specific price do you qualify for on your own? After that pursuing a TIC may be possible, but do you know someone you can trust - someone who has done this already? If not, don’t do anything until you find someone who has completed this process - not a realtor who does this for a living, but someone in a TIC right now.
Many FTHB eliminate “Condo” from their searches. I’d add it in, but look at the home style. There may be small condo projects that would suit what you’re looking for in a home, without all the potential issues of a TIC.
Thanks for reading
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Zaphod, based on your posts in past several months, it seems you are buying your first home and you don’t have a lot of experience. There are a lot of first time buyers. Everyone has to start somewhere. So nothing to be ashamed about.
It’s cool to to ask for info and advise on the web. But it is easy for anyone (including me) to provide advice where we have zero vested interest and no risk involved. So who knows if these advise is really appropriate for your situation.
Why go thru all these weird strategies simply because your offer was not accepted one time. If you went thru 10 offers and you are not even close, then you will know if your pricing or expectation is off. Or get a good realtor who can work with you, act in your best interest, and provide that reality check immediate. So my recommendation is put your time to interview real estate agents.
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Hi, jk88cal: Thank you for the advice, which, like most counsel I’ve heard here, I’ll of course consider carefully. I do take all advice with a grain of salt; it’s just that, in contrast to other forums to which I belong, people here seem to be much better informed about the main forum topic. Also, It might be useful to say that I have bought property, and have tried to think through some of what will probably in the end prove to be unworkable strategies. And I am looking over agents. I suppose that as I get older, I get a little too picky about who I’m working with. I’ve also owned a duplex before, so I have some experience of what’s involved. And, though it happened longer ago than I now care to think on, I’ve also bought real estate without an agent a couple of times, and even homes that needed lots of work. I think that, as someone looking for a home, I may be a bit of an oddball: a regular consumer (rather than a contractor or investor) who has taken a couple of lucky chances in the past that seemed to work out OK. In any case, I’m hoping this description will provide a slightly better sense of who I am, at least here. On a slightly different note, I have been a little worried that my questions might be a little low-level for this forum. If someone lets me know that’s the case, I’ll happily sit back and just listen for a while. Anyway, thanks again for the advice.