Many Boston real estate buyers who start out looking for a condo in the Boston area often end up deciding that they’ll join forces with their friends or family members to purchase a two-family. This can be a good decision, but it’s important to be aware of the key factors to consider when deciding whether such a group purchase is possible—or a good idea.

Here’s what you should discuss before you take the plunge into the two-unit building market:

You’ll need to have shared goals. The biggest advantage of a two-family home is the process by which you can condo convert. (It typically takes 1.5-two years.) Make sure all the owners are on the same page about wanting to condo convert, if that’s the ultimate goal. If you’re all in it just to own a two-unit building for a few years and then re-sell the property, that’s fine, too. Just make sure everyone knows what the end game is.

All buyers should be financially compatible. It’s ideal for all buyers to be in similar financial situations. You will have many shared expenses, particularly if you plan to condo convert the building. And you’ll want to make sure you have sufficient financial resources when it comes to maintaining the building and dealing with necessary repairs. Remember: You’ll each own half of the common areas, so it’s not great if only one buyer can afford to pay his or her share of the roof replacement.

You should all share similar attitudes about maintenance and repair. For every homeowner who calls the plumber at the first sign of a leak, there’s one who lets it go until the kitchen floods. If you’re the type who sketches out a repair and maintenance plan for each year, it may not be a good idea to team up on a two-unit building with someone who ignores the rotten wooden siding and hopes it’ll go away on its own.

Your loan will be different. Your choices will be either a shared loan on the building, or two fractional loans. Both loans will carry adjustable rate mortgages, but the rates and requirements will be different. The traditional group loan requires that all buyers get preapproved together, and this factors in everyone’s qualifications and credit scores. If one buyer defaults on the mortgage, all buyers are held responsible because it’s a shared loan. Buyers using a fractional loan would be individually preapproved and would not share a loan. It’s more common for buyers who already know each other to get one loan on the building and then refinance into condo loans within two years after pursuing condo conversion. I recommend looking into the details for each loan option, and seeing which one will make sense for your situation.

Vacant two-unit buildings aren’t a bargain. You will probably end up spending as much on a vacant, two-unit building with equal-sized units as you would were you to purchase an individual condo. Vacant two units are very close in value to condos, due to the direct path to condo conversion.

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Author Profile

John Ford
John Ford
EXPERIENCE

Over the course of 20 years in the Boston downtown real estate market, John represented and sold numerous, condominiums, investment and development properties in Greater Boston and in the surrounding suburbs



In addition to representing Boston condo buyers and sellers, John is currently one of the most recognized Boston condo blog writers regarding Boston condominiums and residential real estate markets. John's insights and observations about the Boston condo market have been seen in a wide variety of the most established local & national media outlets including; Banker and Tradesman, Boston Magazine The Boston Globe, The Boston Herald and NewsWeek and Fortune magazine, among others.



HISTORY

For over 24 years, John Ford, of Ford Realty Inc., has been actively involved in the real estate industry. He started his career in commercial real estate with a national firm Spaulding & Slye and quickly realized that he had a passion for residential properties. In 1999, John entered the residential real estate market, and in 2000 John Started his own firm Ford Realty Inc. As a broker, his clients have come to love his fun, vivacious, and friendly attitude. He prides himself on bringing honesty and integrity to the entire home buying and selling process. In addition to helping buyers and sellers, he also works with rental clients. Whether you’re looking to purchase a new Boston condo or rent an apartment, you’ll quickly learn why John has a 97% closing rate.

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Back Bay

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Contact
John Ford and his staff can be reached at 617-595-3712 or 617-720-5454. Please feel free to stop by John's Boston Beacon Hill office located at 137 Charles Street.




John Ford
Ford Realty Inc
137 Charles Street
Boston, Ma 02114

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