Two Duplexes Two Tax ID's One Well - Financing Questions

5 Replies

Hi All,

I've spent a lot of time lurking - this is my first post.

I'm looking at a 4-unit purchase.  There are two individual lots being sold as one.  One duplex on each lot, BUT there is only one well.  The property is located in Michigan. The purchase price is $265k with gross rents of $3600/month.

I'm running into issues with traditional residential lenders who do not want to underwrite a loan in this type of situation.  So far the only options I've been able to come up with are as follows:

  • One residential lender said they could do a standard 30 year fixed at 4.75% with no points 25% down, if there was a "Shared well agreement" publicly recorded and/or on the title.  I would have to convince the seller to do this and it would be irrevocable, so if I ever decided to sell one off it could cause some issues.
  • Get a commercial loan but then I need 30% down which is a bit of a stretch for me (I've got about 80k in liquid assets) and the loan would be a series of four 5 year terms and with interest rates set to rise over the next few years, I'd really rather lock in a good rate now and forget about it.

So I'm looking for any advice from anyone who's run into a similar situation, and/or any creative solutions. Any and all help much appreciated!


I would ask the seller to do it.  A shared well agreement should not be that big a deal in a place like Michigan.  You could close the loan this way and potentially dig a second well at a later date to rectify the problem.  If you go hard with your commitment, the seller should not have a problem doing the agreement.


Hi Mark,

I think that is the direction I'm leaning as well if I decide to pursue it.  I'm actually backing off this offer a bit, because two short sale properties I've had an offer into for the past 5 months just both countered me this week, so I may have some other options opening up pretty quickly.  However I'm interested in keeping this one in my back pocket because I think the cash-flow is pretty good. I grew up in Michigan, so I really like the idea being able to write off my travel back home as a business expense.

@Kirk Berryman  Unfortunately I don't have anything of significance to contribute in relation to the well issue. I would be curious to see how you worked it out if it does go through.

Where at in Michigan?

Good Luck!

Hi Josh, I haven't sorted it out yet.  The seller has offered a land contract, which I'm inclined to take especially since I think I'm going to be hitting a financing wall pretty soon.  

However now that I'm under contract on two other rentals properties.  I'd like to get those sorted before I return to this one.  I'm interested in becoming a mogul but I think filling 6 units in two different states within the same month is a bit beyond my comfort zone at the moment :)

I'm looking a little further west, in the Brighton area.  However I've got family in walled lake and there is a pretty interesting looking duplex with room to expand just off pontiac trail and commerce that caught my eye.

As an update for anyone who is interested.  I walked from this one, but have been keeping an eye on it.  It's still listed, but with winter approaching and 4 units needing to be rented out after school already started I felt it was going to be a long cold (vacant) winter.  I'm going to revisit in the spring if it's still available and see if the seller is a bit more motivated :)

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