Purchasing SINGLE Duplex owned by TWO sellers HELP!

7 Replies

I'm not sure where this applies more, loan advice or buying and selling discussion so here is a double post to some degree. If thats not okay then I apologize.

https://www.biggerpockets.com/forums/311-buying-selling-real-estate/topics/694315-purchasing-single-duplex-owned-by-two-sellers-help?page=1#p4099786
Text from the link:

I am in the process of buying a half duplex and the owner of the other half has reached out to me about selling. Is there any way that I can roll these two purchases into one so I only have one appraisal/inspection/closing cost? My lender and realtor agent have not seen a situation where a duplex that has two separate owners both sell at the same time to a single buyer and are digging to find information as well. Just curious if any of you could give us some pointers in the right direction. THANKS!

Assuming you want the Fannie Mae subsidy on your interest rate, terms, and closing costs, it'll be two purchase contracts, two escrows, two appraisals, etc.

On its face with what information im seeing, it looks like its 2 separate transactions seeing as theres two separate sellers so dont know that a lender is going to be ok with getting a single appraisal/inspection for both sides even though its one building.  I feel like it will have to be handled separately unless the lender is willing to lend to you purchasing both at the same time maybe?  Either way I'm interested as to how this turns out.

@Zack Wills Currently its looking like it'll have to be two separate transactions. I'm trying to find details on how wholesalers do it. In one of the BP podcast I listened to, awhile ago so idk which one it was, they had a wholesaler on who would sign to buy it from the original owner at the same time they would sign with another party who buys it from them. Some how the first contract was null and void if the buyer didnt sign the second one. If anyone knows anything about that it'd be appreciated. 

So I'm thinking one half sells to the other half. Then I buy both from them.

@Diana Muresan Thanks, I see that you're a lender so I've got another question for you. If I purchase one as a conventional first time home buyers and get the second as an investment property. Would I then be able to resurvey the property to join them together as a duplex and refinance that with FHA?

@Curtis Linville if you can change zoning to a duplex then, yes, you can refi without seasoning as long as is rate & term. So if you purchase one unit OO at 95% LTV with Freddie and the other unit as INV at 80% LTV, you can technically refi fha but it will cost you quite a bit with 2 set of purchase closing costs, then refi and having a 1.75% UPFMI (up front mortgage ins) rolled into the loan and then eventually you will need to refi again in order to cancel the MI, so there goes another refi. Make sure it makes sense financially

Well to post a follow up, it doesnt seem like its going to work out. I chatted with a couple of attorneys and they all give the green light but the banks are worried about going forward because I'm trying to use FHA and its a little too grey for their preferences.

Thanks everyone!