Are Duplexes considered commerical property

[Daria B.]

Hi BP community!

Thanks for looking at my post....As stated below I am an investor but very new with respect to others that have multiple-multiple-multiple properties and a longer stance of time.

I'm an investor dealing primarily in SF (own a townhouse in MD, 2 SF in FL). I've found a duplex and am looking to add that to my portfolio. I am a buy and hold investor and am looking at duplexes to diversify. My buying experience is purely with SF. The townhouse I used to live in and moved away so it's a grandfather investment.

I've been doing a lot of reading and running numbers to see what it will yield.

The duplex I found I did some research on for the property (taxes, etc) and previous owner deed and mortgage records (public records) and there is a statement in the mortgage papers:

THIS IS COMMERICAL PROPERTY AND IS NOT INTENDED TO BE THE HOMESTEAD OF THE MORTGAGOR HEREIN.

I'm focusing on the "COMMERICAL PROPERTY"......

Up to now I was not thinking that duplexes were considered commercial property....There are triplex units and quads and of course jumping into the 10-20 units and those I though were considered commercial.

I guess if I step back and look at the fact that the dwelling houses multiple tenants, then yes I can see it being classified as commercial.

I can't find anything on the county appraisers web site for the records of this property that indicate "commercial". The deed looks just like the deed for my own SF.

1-Are my assumptions correct, is a duplex classified as commercial?

2-If this is commercial, what else can I expect that would be different than a SF with respect to taxes (I will be running this by my CPA)..., mortgage (I have a meeting with my lender next week and will now have to tell them to find out what I'm up against)....

3-I've never dealt with commercial property. Any advice is welcome, what to look for, what else am I missing....

4-If this is commercial property, what other questions should I be asking and to whom?

Thanks and have great Memorial Day weekend!

[Chi Cheung]

Hi Daria,

1-4 units are usually considered residential.

This might have been a commercial loan. I think mortgage companies state this in the lien to make it easier to foreclose on the property in case the borrower does not pay. This is why some hard money lenders require the title of the house to be held in an LLC.

Chi