Duplex - to zero-lot-line or not (subdivide)

[Marcel Crudele]

I'm working on being very clever and realized I might be trying to be too clever... I could use some advice.

OVERVIEW

I have a sfh + ADU in a very popular part of Atlanta - Old Fourth Ward. I'm using the ADU as a STR and it is doing great!

My plan (currently at permitting) has been to replace the sfh with a Duplex with the ADU assigned to Unit A and Unit B its own property - subdivided with a zero-lot-line. I would live in Unit A and rent out the others, but a backup, emergency plan would be to sell Unit B if needed.

Financing would come from a construction loan and, after construction, I would "buy" Unit A and the ADU from myself with a personal mortgage and let the interest-only construction loan convert into a 20-year loan on whatever the balance is for Unit B - the expectation being that personal mortgage terms would be better than converted construction loan terms.

I could always refinance Unit B later if it made sense. This plan has been discussed with the bank.

THE QUESTION

Should I split the properties as described or keep it as a single duplex property? While dividing the lot gives me the flexibility to easily sell one of the units, keeping them together would allow me to refi the entire property at a lower rate and potentially reduce the total property tax (I'm making that last part up, but it seems like it could be the case).

Any help would be appreciated.

[Chris Seveney]

@Marcel Crudele

Can you subdivide them at a later date after the build? Meaning keep it on one property for now and if you decide to sell down the road then subdivide?

There is no right or wrong answer here it comes down to what your plan is? If you plan on holding it for a long time then subdividing may cost your more in the long term but give some flexibility, if you are thinking of selling them subdividing now gives you that ability.

[Marcel Crudele]

@Chris Seveney my grand scheme is hold forever, but the sell option would give me a good bit of comfort. What you’re proposing is something I need to investigate and make sure I build toward regardless, taking into account any requirements like dividing wall rules, placement of utilities, etc.

Any chance you know if there are property tax benefits to keeping them together?

Thanks for the response!