House hack- what they don’t tell you

[L. Brown]

I recently experienced something that I’m wondering if others have experienced. My goal was to do a house hack where I lived in the basement and rented out the other units. I found a duplex I like and began the process for getting it under contract. I went to an investor meetup and as soon as I told them I wanted to rent out the 2 units and live in the basement they told me it was illegal- that I was operating it as a three family. I called the town the next day and they confirmed that it was illegal for me to live in the basement, even if I was the owner. After talking to a few more people about it, they said this was not unique to that town, that using the basement as my living space would be illegal regardless of the town. It was curious to me why I had never heard this in the books I’ve read or podcasts I’ve listened to. It’s always been spoken about as if it was fine. Unfortunately, I’m back to square one with how to get into real estate.

Has anyone experienced this?

[Brendan F. Nagle]

Not a laywer, not your lawyer, But could you consider the basement a part of one of the units and have roommates? My house in MN, we just finished the Basement out. Added a bedroom and bathroom. I don't have it as a separate unit. I see it as adding it to my part of the house. So instead of a 2/1 it would be a 3/2 with roommates.