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So I have a wifi extender since my wifi doesn't reach from upstairs to downstairs (you lose connection alot) so my question is can you do lan if one person is connected to the extender and the other is connected to the router

Theoretically it's the same as if you were both in the same router. 

If you tried it and can't see each other, then it means that your router configuration is preventing you from establishing the connection. 

Setting things up properly depends on your router and extender, and sometimes it just plain won't work. So there are two possible solutions: 

  1. Try making a wifi hotshot from one computer, and configure the extender to use that. This might work better than using the router, as routers have very restrictive protocols. 
  2. If that doesn't work either, your best bet is to use Hamachi or Tunngle as if you were in faraway places. This will require you to be connected to the internet. 

Let me know if you need more help!