Posted by GL(ON) on July 09, 2002 at 22:50:54:
That would be a condo conversion and it would require a lot of legal work. In many areas laws were passed in the 80’s making that type of condo conversion very difficult, in order to protect tenants.
Duplex split for sale - Posted by Tim Truman
Posted by Tim Truman on July 09, 2002 at 21:52:33:
I was wondering if you could by a 6plex on a lease option and then sell them individually. If it’s possible do I have to have 6 contracts one for each one?
thanks
tim
Re: Duplex split for sale - Posted by Ronald * Starr(in no CA)
Posted by Ronald * Starr(in no CA) on July 09, 2002 at 23:45:07:
Tim Truman----------------
I think GL(ON) gave good information. However, different jurisdictions have some different laws. Since this is a local law issue, you need to find out the rules and regulations where you plan to try what you propose. Talk to the city or county planning folk. Talk to a couple of knowledgable attorneys if you can. If it won’t work where you live, check out other jurisdictions within a reasonable distance of home.
This is a classic example of buy wholesale and sell retail. Buy in bulk, break up the product, and sell to the average consumer.
Here in the San Fran Bay Area, there are restrictions such as GL mentions. However, people have gotten around some of them by selling as you propose. It is called “tenants in common.” You might find information about this on the internet. The idea is that it is a sort of informal condominium conversion, without the conversion. There is no actual subdivision of the units into separate tax parcels and with separate legal descriptions. But each buyer buys a partial interest in the whole building. There are agreements signed by all the owners about the use of the individual units, the use and maintenance of the property and common areas, and so on. So there is some legal work required and some salesmanship.
It may be difficult to find lenders who will loan on such partial interests. It may require abnormally big down payments. Or the seller–you–may have to provide the financing to make it work.
It works here in San Francisco and Berkeley, that I know of. The property prices here are very high. The competition for single family houses is intense. Thus, there are people eager to own their own home and not able to do so. They may settle for condominiums. These tenants in common–abbreviated TIC–are poor relations to real condos.
If there are many houses available for sale where you are, the probability is that it will not work. If there are few available, you chances of pulling it off go up.
Good Investing and Good Thinking****Ron Starr