What is a Triplex Foreclosure?
To answer this question, we must first arrive at a triplex definition. A triplex is, simply put, a building comprised of three units. Like duplexes, a triplex house has a couple of possible configurations. One configuration is a dwelling with three floors, one floor per family (referred to as a tri-level home or a three-decker). The other is one building with three separate living areas, one per family, with entrances for each living area. These typically share common walls with each other. Triplexes can also be in the form of a semi-detached house.
Triplex foreclosures are when the owners of these units default on their loans. Like other foreclosed homes, triplex foreclosures are repossessed by the lenders and sold at auction, where people may purchase them. If they fail to sell, they then become bank-owned homes.
Does Triplex Homes, Triple Decker Properties and Tri-Level Houses Refer to the Same Type of Real Estate?
All three of these terms have features in common, but there are differences.
A triplex house, broadly speaking, can include the other two terms. In fact, many people refer to all types of triplexes as triplex homes. This is also synonymous with using the word triplex by itself. Most commonly, this refers to a single building divided into three separate dwellings.
A triple decker house is a home with three levels, with one family per level. This is just like a two-decker home.
A tri-level house is a split-level home with three levels. Generally, the main level is where the main entrance is; there is then a level above and below the main level. Tri-level homes can be triplexes, but generally are single-family dwellings.
The term ‘triplex foreclosure’ can refer to any of these, but most commonly refers to the first two types.
Buying a Triplex Foreclosure
Buying a triplex foreclosure isn’t dramatically different from buying other types of foreclosure homes, generally speaking. Triplex homes for sale have been seized by lenders for the failure of their owners to pay their mortgages. They are typically placed for sale at auction, often at a discount.
Before you begin foreclosure investing in triplexes, understand the process as it pertains to your local area. Different jurisdictions have different procedures. Generally, you can find notices of sale in county courthouses that give you basic information you need to get started.
Once you have researched the property, you can attend a sheriff’s auction to put in a bid for the property. Or, you can see if you can reach a deal with a lender on a triplex building that did not sell at auction.
Remember: At the end of the day, the specifics of buying a triplex foreclosure depends on why you want to buy it. Are you looking for cheap homes for house flipping? Do you want to rent out the space, or turn it into a business space, or live in it yourself?
Understand your intent first before beginning any process.
Can I Buy Only 1 Piece of a Triplex Foreclosure?
One common question involving a triplex foreclosure house is whether or not you can purchase just one piece. There are, after all, three units involved.
In virtually every case, the answer is no if the foreclosure triplex for sale is being listed as a single property. There are three units, but for mortgage (and legal) purposes, it is considered one property.
Be aware, though, that only one unit may be up for sale at auction. It is possible to purchase just one unit (provided local regulations are followed). If the owner of that unit defaults, that single unit could be up for auction.
You may also see a triplex condo up for sale at auction, but this generally is not in the same category. A triplex condo is a condo with three levels, typically under one owner.
Tips for Triplex Foreclosure Home Buyers - Savings and Earnings
Triplex foreclosures can be very advantageous properties for those who want to invest in real estate.
For example, if you are into flipping a house, triplexes are attractive because you can flip three units to three separate individuals or families – or flip the entire triplex foreclosure home to another buyer.
You can also purchase cheap triplexes for sale and use them to generate consistent income from rentals. Three units give you three units to put up for rent. This is a very common use for triplexes, particularly in high-density urban areas where space is at a premium.
You can even own a triplex building and live in one triplex apartment, for example, while renting out the other two. Or, you can live in one unit and keep the other two units for storage (or combine all three units into one larger home).
Finally, triplexes can be used for businesses – either your own or that of someone else. It is not uncommon to see a business occupy one or two units of a triplex building with the third unit serving as the living quarters for the owners.
The main advantage of a triplex is flexibility. You can convert a triplex into a wide variety of uses and purposes. This flexibility gives you the potential for significant profit by investing because you can adapt your property for a multitude of uses.
To make the most of a triplex, learn the area in which you are purchasing and determine what the most pressing needs are in that area as far as space goes. For example, a triplex near a college campus is a great rental property. Similarly, a triplex in an area with residential and commercial properties mingled together is promising for a joint living/business arrangement. Areas with high housing demand and rapid population growth are prime candidates for a timely triplex investment because you can have three tenants or buyers in the space of one property.
Also, be sure you know what you want to do with your new triplex foreclosure before you invest in it. Planning ahead can help you save even more money. If you intend to kill two birds with one stone by buying a triplex and living in one unit while renting out the other two, make sure you plan for that; likewise, if you plan on opening a business in your triplex, make sure you meet all local zoning and permit laws.