duplex advice please!
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  1. #1
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    duplex advice please!

    Hey all! this is surely not the place for it, it had nothing to do with cycling but the folks here always have some advice so here goes. I'm looking for some direction on this subject. My family bought a duplex with a friend's family years ago. 2 families, 2 units (1 family in each unit), both heads of families are owners on the title. The one family wants to sell, mine however does not. That family has a real estate agent that is giving us the option to buy the entire property. Is this the only option? A real estate agent that I talked to mentioned the possibility of refinancing so that I would owe the original purchase price plus their portion of the equity of course, and not the current home value. i would like this option because the home has appreciated quite a bit and I wouldn't want to buy when it is at a high price. The houses are identical and located in Long Beach, Ca if it matters. I'm meeting with an agent on Saturday but for now I'm just looking for any advice. Thanks.


  2. #2
    gazing from the shadows
    Reputation: QuiQuaeQuod's Avatar
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    My advice is that you should always have exit terms and conditions set before buying property (or a business) in partnership with others. The "how do we do this if one of us wants out" should have been spelled out.

    Forget purchase price, the other people have gained value through their investment (as has your family) and won't ignore it. And shouldn't. You are talking about an asset that has a value now, not past value, not future value. Put another way, would YOU ignore the increase in value of something you were selling?

    The best way to get this done is to offer to buy their half of the property at a fair price. Current market value - a bit (given there won't be costs for an agent, or months standing empty with bills to pay, etc.)

    I don't know all of the options, and what might be better: buy their half, both of you sell all of it to yourself, refi or second mortgage... dunno. Find an expert you trust, and NEVER trust the expertise of someone who is paid by someone else (a real estate agent NOT under contract with you, for example.) A real estate lawyer might be a good consult at this point. A couple hundred bucks for an hours worth of advice might just be enough to make this process way less painless.

    Good luck.
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  3. #3
    Russian Troll Farmer
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    Being as you are in California, I just have one bit of advice too often ignored in your state: GET A DAMN LAWYER BEFORE YOU GO ANY FURTHER!!!!!!!!!!!And not just a "couple of hours" either; you need to have a real estate attorney on retainer through the entire process.
    "L'enfer, c'est les autres"

  4. #4
    gazing from the shadows
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    Quote Originally Posted by No Time Toulouse View Post
    Being as you are in California, I just have one bit of advice too often ignored in your state: GET A DAMN LAWYER BEFORE YOU GO ANY FURTHER!!!!!!!!!!!And not just a "couple of hours" either; you need to have a real estate attorney on retainer through the entire process.
    Likely a good idea. But I would NEVER put a lawyer on retainer without an initial meeting first. Listen to their 1 hour advice, decide if they are a person you want to work with in terms of style and how they explain things, stuff like that. Then make the call.

    Test the waters, so to speak.
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    Stout beers under trees, please.

  5. #5
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    I guess your finding out why this is was a bad idea.

    It's tricky to sell this way, you will have to first give consent for the other party to sell their half. Then you will have to have an agreement with the new buyer as joint title holders. This agreement should layout an exit strategy for either party, usually with the joint tenant having the first right of refusal to purchase the property at appraised value.
    This is all messy as hell and causes a lot of heartburn for everyone, and can potentially scare away potential buyers so remember that when you want to sell.

    For everyone else that is thinking of buying ANYTHING jointly with family or friends. Just stop now. I have rarely seen it end well.

  6. #6
    RoadBikeReview Member
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    Either buy them out or sell.

  7. #7
    Neophyte
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    Whatever the price is, cut it in half, and then double it!

  8. #8
    pmf
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    You definitely need a lawyer, but God help you finding a decent real estate lawyer. I went through two of them when my mother in law died, leaving us two properties (one in another state), and they were both completely worthless. So be careful. Find some references.

    The way I see it, you either buy the other half of the duplex at market value from the other family, or you sell your half too. Thinking you can buy out the other owner by paying off their half of the loan, or paying them half the price you originally paid for the property is pretty insulting to the other owner. Would you take that deal?

    Aren't duplexes treated like single family homes? Is there some way to refinance so you are the sole owner of unit A and the other family is the sole owner of unit B?

  9. #9
    gazing from the shadows
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    Quote Originally Posted by pmf View Post
    Aren't duplexes treated like single family homes? Is there some way to refinance so you are the sole owner of unit A and the other family is the sole owner of unit B?
    If it is owned as "tenants in common" (I looked it up) then both people actually own 50% of all of the duplex (not 100% of half of it.)

    And also, since I just looked things up.... lawyer. Because a lot of "answers" I found to my questions were... "it depends on many things".
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  10. #10
    pmf
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    I've seen duplexes for sale that are half the building (one side). Seems like there would be some way to split the unit into two, sell one side while the OP can keep the other side.

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