Portland, OR- is it worth converting single family to duplex?

Question

Hi all-

New to the forum here and never posted- hope I’m doing this in the right spot. I’d love to get a duplex in Portland - hack it out and live in half the unit. I’d be a first time homeowner so I’d like to use a FHA loan which tops me out at 608k max for a duplex or 485 max for single family home. The problem I’m seeing is most duplexes are over the 608 price. Lots of homes under my max for single family.

I’m wondering if it makes sense to buy a single family and go though the process of converting to a legal duplex. Anothere, easier option is converting basement into an ADU in single family. However, I’m looking at single family homes with ADUs and the resale is not nearly as good as the duplexes. I imagine the investment potential would be greater with converting to a duplex.

I imagine it would be a big project and depends on the home- I’m not sure if I’m being glass-half-full or entirely delusional :)

Has anybody here converted a single fam to duplex in Portland? If so, how hard was the process (through the city to get it a legal duplex) and what should I be looking at as far as single fam homes? Im thinking zoning would be an issue- I’m a little confused about which zones to check into. I think it would be R1,2,3, Rh, RX and RMP.

Thaaannnnnkkkksssssss

Jay Hinrichs · Answer

Neal good afternoon hope the city is still ok after today LOL.. but what is Dweller ? can you expound on that for the audience. ?

Zachary Johnson · Answer

Hey! Just stumbled on this thread as I contemplate the same question, did you ever go through with the conversion?

Voytek Truszkowski · Answer

Hi Liliana,

Maybe consider looking for a multifamily outside of the Portland city limits?

I was able to find a really affordable duplex in Milwaukie, with a super easy commute into downtown Portland. My agent was able to find the property off market. Now I'm successfully house hacking and finishing out the basement, adding bedrooms. Other than my ridiculous water bill, Milwaukie is a pleasant suburb to live in, that is just now starting to wake up.

Happy Investing!

Jay Hinrichs · Answer

thanks Neal ground lease.. kind of like owning a MHP only one pad at a time.. thanks for the reply appreciated !!

Neal Collins · Answer

@Jay Hinrichs

Dweller is an interesting new company in Portland that is aiming to increase density and affordability by adding ADUs to properties for free.

Patrick Quinton that used to be the head of the Portland Development Commission before it became Prosper Portland is the principal there. He’s a smart guy and has developed a very interesting business model.

He works with property owners by ground leasing a portion of their property, installs a modular ADU there at no cost to the property owner, and then rents it out. One third of the gross revenue then goes to the property owner, and the owner is not on the hook for maintenance or repairs. Dweller also pays the difference in the increase in property taxes I believe.

The property owner can purchase the ADU at a given strike price depending on how long the ADU has been on the property.

We’ve had a client install one on their property and I’ve toured several more of them. They are really nice one bedroom one bath units. It’s definitely an option that people should know about.

Neal Collins · Answer

@Liliana Quilici

I’d look more closely at your theory that duplexes go for higher premiums than houses with ADU’s. In my opinion the opposite is true most of the time.

We’ll start to see a continued progression of large houses being chopped up into smaller apartments, but if you are going the route of first time home buyer loans you could look into an FHA on a multifamily, a home renovation loan, or even get an ADU put on your property for free with a program like Dweller.

Portland, OR- is it worth converting single family to duplex?

Portland, OR- is it worth converting single family to duplex?

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