Misadventures in Multi-Family – Always See What You’re Buying

The first time is fraught with errors, miscalculation and general boo-boos. The novice is tripped up by inexperience, emotion, naivity and ego. One thing we learned from our first real estate investment was to actually look at the property you’re buying. All of it.
The duplex we decided on was 11 years old and “well maintained”. The numbers worked and we had a plan. We’d buy, subdivide and sell. Now we just needed to complete the formality of viewing the place. Our realtor showed us one side – 2 bdrms, 1 bath, all white, well maintained. Everything was in great shape.
Then we suggested that maybe we should look at the other side too. We were assured that the other side was “exactly the same”. … she was sort of right.
Six weeks later, and a week before we planned to list the property, the tenant on the unseen side called us to request a walk through. He wanted to be sure that, upon sale, he would receive his security deposit back. Of course we obliged – we should have done this before we bought the place anyway.
Our inspection revealed that this side was not at all “exactly like the other side”, but required thousands of dollars of repairs, cleaning and painting. Our boo boo was going to cut into profits. Learning often costs money.
The point here is that part of due diligence is inspecting the entire property you’re considering. If it’s a multi-family, inspect each suite. It’s not an inconvenience to the realtor, you won’t appear ‘overzealous’, and if your realtor does, for some reason, take issue with your thorough inspection, get a new realtor! Look at the furnaces, hot water tanks, appliances, windows behind drapes. Make sure you know what you’re buying!