Can you sell individual units of a fourplex?

[Rachel Rendall]

Hi BP community,

I am interested in buying a fourplex, but the downpayment will be substantial. I am wondering if after buying the fourplex I would be able to sell one of the units (each of the units is the size of a small house), and use that to cover my initial downpayment, giving me the remaining 3 properties cashflowing every month without any tied up capital. 

I imagine there are some issues doing this regarding the bank that owns the initial loan probably not wanting me to sell off a fourth of the asset while I'm still making payments (if they had to take the property back for foreclosure that would be messy). Just wanting to see if anyone has ever done this and what advice you may have.

Thanks!

[Bryan Blankenship]

If it's zoned and platted as a true 4 unit, then no, you won't be able to.

You'd have to convert into condos which would likely be a huge undertaking and wouldn't fly.  It can be done, but likely not worth the time/money.