What is the difference between multifamily and duplex properties?

August 17th, 2009 Jacquie Cliff - Real Estate Agent and Loan Officer

What is the difference between multi-family, duplex and 4-plex properties?  I have been asked this before and it does seem logical that they should all be lumped in to the same group.  After all a duplex does house multiple families so it seems logical that it would be a multi-family property.  But that is not how things are classified.

The convention is in lending that multi-family properties are those with more than 5 units and as such are considered commercial properties.  Properties with less than 6 units are classified as residential properties and loaned on just like you would a single family home.  The difference being on how they are valued.

DUPLEX & 4-PLEX = COMPARABLES APPROACH
MUTLI-FAMILY PROPERTIES = NOI & CAP RATE VALUATIONS

Doesn’t make much sense does it when they generally bought as income producing properties does it?  The one caveat to this is that because two and four unit properties are counted as residential homes, you can purchase them with FHA loans and live in one of the units.  As I have discussed before, buying a duplex or 4-plex as a first home is a great way to get started in real estate investing.

There are some other tricks that can be applied to rental properties because of the differences in how they are valued as well.  If you are in the Seattle area and thinking of investing in a rental property or twenty call me and we can discuss some of your options!

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Duplex Depot Headache Avoidance Tip – Change the Locks on Those Rentals!

August 14th, 2009 Jacquie Cliff - Real Estate Agent and Loan Officer

As a real estate agent I am usually in charge of delivering the keys to the buyers that I have just helped get into a home.  Now I am sure that Lynnwood and the Seattle area is much safer than everywhere else in the country (not tongue in cheek) but it is a good piece of advice that you should get a property re-keyed after you take possession.

For rental properties(single family homes, duplexes, 4-plexes) this is especially important and often overlooked.  If you have just taken over, raised the rents and had tenants move out and new ones come in, you don’t want any surprises.  I can only imagine the headache that it would cause if your new tenant found out their house had been robbed by someone that had a key to the place! 

So get your doors rekeyed after tenants move out.  It is generally not overly expensive and is a lot easier to deal with than having a property robbed and possibly getting sued by the new tenants.

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