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Duplex Living and Duplex Options.

A recent article in the Lexington Herald-Leader called “Duplex Living” highlights several benefits that duplexes provide for both the duplex owner occupant buyer or renter and also for the duplex investor.

For the Owner Occupant Duplex Buyer or Renter:

  • The ability to have seperate units but live next to extended family.
  • The ability to have separate units but live near an elderly parent or grandparent.

For the Duplex Real Estate Investor:

  • A good duplex creates dual cash flow.
  • Some people looking to downsize may have interest in buying a halfplex.

What is a Duplex REO?

Unfortunately people are having financial troubles and some are falling behind on their mortgage payments. After a certain amount of months of non-payment a foreclosure of the property will occur.

Before either foreclosure proceedings happen the borrower will receive a “notice of default” stating that they are behind on payments and gives instructions on how to reinstate the loan. If that does not happen then a foreclosure will eventually result, but the foreclosure process depends on what state the real estate is in. There are 2 types of foreclosure proceedings:

  • Judicial Foreclosure.
  • Non-Judicial Foreclosure

With Judicial Foreclosure a lender files a “lis pendens” which is basically a notice of pending legal action that will affect the property. After this happens and the borrower still doesn’t satisfy the back mortgage payments, it is ordered to be sent to sale to satisfy the debt. This sale is usually handled by the county’s sheriff office where the property is located in. The sale has an auction style format and is called a “sheriff’s sale”

With Non-Judicial Foreclosure the real estate deed has a “power of sale clause”. This basically allows the lender to sell the property to satisfy the debt after the borrower defaults and does not reinstate the loan without having to obtain a legal decree of foreclosure from the court. There is however state statutes a lender must follow to allow opportunities for the borrower to reinstate the loan. If not reinstated, an auction sale occurs called a “trustee’s sale”.

Now if the property goes to auction and no bidder satisfies the debt the lender will retain ownership of the property and now the property is referred to as a “REO”. This stands for “real estate owned” and is the lender inventoried property resulting from a foreclosure and no 3rd party buyers at the auction willing to bid against the lender.

We will talk more about duplex reos, from foreclosure prevention to duplex reo investing in future posts.

Duplex vs Halfplex.

In our previous post “Halfplexes, Own half a Duplex.” we mentioned halfplexes. Based on a email question that was sent to us and some confusion on the internet such as was found in some responses to the question: “What is the difference between a Duplex and a Halfplex?” at active rain dot com, we wanted to clarify the difference on our blog.

The confusion maybe to the fact that both terms relate to the same housing type, the duplex. The difference between a duplex and a halfplex is that when selling a duplex, the sale is of both units from one owner. When selling a halfplex, it relates to the sale of one unit of a duplex who has two separate owners.

Now to clarify things even more, when the duplex is being rented out and both units are owned by one party then its simply called a “duplex rental” but if the duplex has two owners, each side would be considered a “halfplex rental”

Duplexes may save Marriages.

People choose new places to live or rent for various reasons. There are different housing options because people are different with different needs and desires. An article titled “A Duplex Built for Two” at the New York Times describes the reason why a couple choose to rent a duplex in New York. The couple is planning on getting married in June of 09, and they didn’t wanted to live together before the wedding. They were searching for a living situation and found that the duplex style allows two levels and some separation until they get married and move all the way in together. The couple even paid for a year in advance with a deposit to a duplex renovator to live in it once it was completed. It just proves that in life everyone needs different things, and in this case a duplex was made to order.

Halfplexes, Own half a duplex.

As mentioned in an earlier post “Duplex Real Estate Scenarios” we listed 4 possible real estate situations related to duplexes. When having full ownership of both sides or both “plexes” these scenarios pretty much sum up the possibilities but there is also another great option for duplex owners, buyers and developers, the halfplex. A halfplex or duplex condo has some unique benefits for everyone involved. We will be talking about halfplexes in more detail in some later posts.

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