Sharing a Double Duplex?
Does anyone have experience buying a double duplex with another party? My husband and I were hoping to buy a two or three family in Clinton Hill, but after talking to a mortgage broker, it doesn’t seem that we could get the necessary financing, even factoring in the rental income. So now we are thinking…
Does anyone have experience buying a double duplex with another party? My husband and I were hoping to buy a two or three family in Clinton Hill, but after talking to a mortgage broker, it doesn’t seem that we could get the necessary financing, even factoring in the rental income. So now we are thinking of trying to find a double duplex in Clinton Hill for under 1.4 to split with someone. That would leave us about $150k for renovation and closing. From what I have learned so far, it seems like the two parties must first secure the mortgage to buy the place and then, after closing, eventually convert into condos and refinance. Any advice, feedback, or referrals for an experienced real estate attorney would be most welcome. Thanks!
email is miss_bliss@earthlink.net. thanks 10:54.
Lucybb, can you post your email address? I’ll send you the name of our attorney and our architect (from 10:54).
Thanks all again for this input, particularly to 10:54 for laying out your own process. Do you recommend your real estate attorney and/or architect? If so, may I have thier contact info? I’m doublechecking but I don’t think my RE attorney has ever handled a tenancy-in-common, and as lovely as she is, I’d much rather work with someone who has some experience.
Bob is right about the double duplexes in Crown Heights North. Most are located on Brooklyn, Sterling, St. Johns Avenues area, between Brooklyn and Kingston Ave, a couple of blocks away from Eastern Parkway, and the subway. This area will be landmarked in a couple of years, is well traveled and attractive. The houses were built as double duplexes, so the units are equal in terms of amenities and layouts. They are called “Kinko houses”, a term dreamed up by the original developers, and most were built between 1912 and 1925. Most originally had great Craftsman/Mission styling and details.
If you are interested, it would be worth going by this area to see.
I know this isn’t a direct answer to your inquiry, but is another possibility to consider, and might be more affordable an area to consider.
Montrose Morris
Good luck with your efforts.
We did the same thing in Clinton Hill and it has worked out beautifully.
The big picture item to keep in mind is that there is no difference between what your are doing and purchasing a condo or a co-op with lots of members (except you are dealing with fewer people). We lived in both a co-op and a condo where there were constant fights between various owners so there is no inherently greater risk than going with tennants in common. Heck, I know people who own their own house and can’t get along with their neighbors and have fights over fences, backyard stuff, etc.
Few pieces of advice if I may. F
irst, work out a partnership agreement with the people you want to buy with first. You will both want separate legal counsel for that. The partnership agreement should govern who owns what, how do deal with investments, rights, sales, etc. In our agreement, for example, we spell out what belongs to the lower unit, what belongs to the upper unit and what is common to the house. It also includes provisions for repair, maintenance, budget, etc.
Second, work with a lawyer who understands tennants in common. Most lawyers will say they do but you want someone who has done a half dozen of these arrangements.
Third, talk to an architect. Lots of code issues on access, dividing electric, etc. Dont’ take the advice of people posting here (including me!). Code is code and you will need an architect for real answers, such as you can’t divide water (not practical), you can divide electric (easy but it costs) and you can divide boilers but it is not cost effective to do so (we have one boiler for our whole house). It is part of our partnership agreement that any change to the house must be done by a licensed architect, contractor, plumber, etc. Permits must be filed and the party who initiates any changes is responsible for code compliance.
Fourth, if you do this, do it upfront together from day one. If you are all on the mortgage from the beginning, the condo filing is much easier and much less expensive. I have estimates from $25K to $50K to take our place condo. However, because we were tennants in common from day one, we are allowed to go condo without a public declaration and filing with the attorney general. The cost to do that is much lower, in the $3K to $5K range. Of course, you have to wait for a few years.
Overall, rest assured that what you are about to do has been done, it does work and it can work really well.
Best of luck to you…
I don’t think water can be metered separately in a house–there’s just one meter. Water isn’t that expensive; you could just split the bill–perhaps the household with more people pays a little more.
Electrical can be hooked up to separate meters. I would think you’d also want to have a C of O for a two-family house.
Heating is probably the trickiest—if there is a working boiler that heats the whole place reasonably effectively, it may be easier (and much cheaper) to divide the bill in an equitable way, and plan for separate heating down the line.
Thanks for all who replied. One other question for those who have done this successfully or know people who have: how do you handle utilities if you find something where the utilities for each duplex aren’t yet metered separately? It seems like it would be pretty expensive to change a heating system, for example. Probably less so to divide electric and hot water, but I don’t really know. Thanks! I’m encouraged.
I have done this and am in the process of doing it again. We bought the building as tenants in common. Both parties (three people actually, myself and a couple) own the whole building. We put the building into an LLC for liability purposes. Then we pay rent to the corporation for use of the space, which pays off the mortgage and pays for all taxes, utilities, etc. We thus avoid the costs of condoing (someone estimated $50K above, I think it might be less but at least $30 or $40K). We have an agreement about both parties agreeing to stay in the deal for a minimum of two years, and if one group wants to sell after that the other has first right of refusal and the right to review any prospective purchasers.
I know two different groups of folks who have done this successfully; neither were friends or family members to begin with, which I think is advantageous.
In both cases, the couples bought the house as four buyers–four names on the mortgage and the deed. They will go condo at a later date (I’m told this costs around $50k).
In both cases, the portion that each party paid was based on the condition of the space they were taking–more renovated floors cost more.
There was also agreement in advance of shared expenses, like the roof, basement, heating, etc.