Reconfiguring two houses, one lot: best help?

[ktorgers]

What is the name of your state? California

My name only is on the deed/mortgage on a parcel with two houses. The front one (1100 sq ft) is rented out; I live with my brother in the other (2200 sq ft). My purchase price was 290K; current value is about 550-650K (hard to say in CA). I would like to cash out a bit but stay in house and help my brother get started; he would move into the front house, which is smaller and needs more work.

I'm considering several options: parcel subdivision, outright sale of front house (most complicated, as best as I can tell in my dealings with the City of Oakland); condo conversion' or tenants in common, with the two of us as partners in some percentage arrangement. I am looking for a "win-win" and need some help modeling scenarios. What would be the best source of advice: a real-estate lawyer? a tax lawyer? or both? Thanks.

 

[nextwife]

You might first want to reserach this fully. In many cities, the two lots are NOT subdividable because of non-compliance, minimum lot size, shared utility mainlines. shared access, and so on. Even when there is legal access to a back house via an alley, the city may not be willing to subdivide side to side leaving an alley-only access.

Keep future financing underwriting guidlines in mind as well! Talk to a lender who deals with secondary market loans and make sure you don't create something that cannot comply with secondary market guidelines and thus can never be readily financed to sell.

Then talk to a RE attorney.

Once you have determined which options are legally impossible, you will have a smaller list of potential options. I'm guessing setting up the property as a two unit condominium with limited common areas and a shared maintenance fund may end up being the best option, depending on lot size and how everything is configured. But the RE attorney can advise how to proceed.

 

[ktorgers]

Thanks...

State: California

Thanks. The City is probably willing to subdivide the parcel; I live on a street where quite a few parcels are 1/2 block deep and have the turnaround,etc. The split was close to final when I purchased the places, then I didn't go through with it and the tentative map expired. I could invest quite a bit to start the process over, but the city may have changed its mind, depending on how many others have subdivided in the past 5 years. That's why I was thinking of other options. I hadn't really considered the financing implications. I'll get on board with an RE attorney first, rather than tax att. --kim

 

[HomeGuru]

What is the name of your state? California

My name only is on the deed/mortgage on a parcel with two houses. The front one (1100 sq ft) is rented out; I live with my brother in the other (2200 sq ft). My purchase price was 290K; current value is about 550-650K (hard to say in CA). I would like to cash out a bit but stay in house and help my brother get started; he would move into the front house, which is smaller and needs more work.

I'm considering several options: parcel subdivision, outright sale of front house (most complicated, as best as I can tell in my dealings with the City of Oakland); condo conversion' or tenants in common, with the two of us as partners in some percentage arrangement. I am looking for a "win-win" and need some help modeling scenarios. What would be the best source of advice: a real-estate lawyer? a tax lawyer? or both? Thanks.

**A: one option would be to do a CPR and ask the lender if they are willing to subordinate to a new mortgage lender. Or create a long term land lease.