**Very First Post!** Seeking Advice On First Purchase

[Account Closed]

Hello! I've been reading and lots recently and I'm seeking advice on my first deal.

I met a guy at Barnes and Noble to sell my online drop-shipping store to. He paid cash and I went into the business section and picked out a book called, "The Book on Rental Property Investing" By Brandon Turner. Real estate investing has always interested me, and I figured I'd learn more and start to take action now that my other pursuit had been passed on to someone else. 

I read that book right away and within a week found a property in my area that I could "house hack" and BRRR. It was way under market value, and the numbers really worked! It's a "legal" duplex... and an illegal fourplex.

We're supposed to close on the 15th of March (so in like 2 weeks!) and I'd love to get some advice so that my wife and I can hit the floor running once we move in. 

Now, the numbers work for two units, but man they'd work a whole lot sweeter with four! 

The first question I have is how illegal it is to rent it as a fourplex instead of just the two units? (ok completely illegal, right?) There are two larger units with bathrooms and kitchens, then two smaller with just bathrooms (though a kitchenette would go nicely and they'd rent in a heartbeat as a studio apartment because the location is between two very large Universities.) What I'm trying to figure out is if there is a way to get it passed as a fourplex, or if it's going to get me sued or something renting out the two larger units, one studio apartment, and living in the other studio apartment. I know the seller did this because in their pictures each unit is blocked off and each was being lived in (so all 4 being rented). I can't find much online on the subject, so what do you think?

Another thing- I have no idea what to do as far as refurbishing/renovating goes. We plan to put some plywood flooring in and fix the outside a bit (the stucco is cracked all over and it's painted pink...) and paint a bunch and put up a new fence that offers more privacy to the backyard, but what are the major fixes or additions to consider when aiming to refinance it and add value? Is there a set list of things, or what is an appraiser going to look for right of the bat that will raise a homes value significantly?

Finally, I just want to know some mistakes you guys have made. Perhaps your biggest mistake when you first started out (or even as an experienced real estate investor) that you wish you hadn't done or that someone told you about earlier in the game. 

Thanks! I look forward to your advice :) 

[Russell Gronsky]

I won't speak on the illegal apartments but I will say this: the dwelling is residential real estate so if you renovate, make it look like the other renovated buildings in your area. Don't spend more to make the units super nice because residential real estate is a slave to comps. So if renovated duplexes in your area are going for $300K, that's about what you can expect your value to be, maybe $310K....even if you put in granite, Brazilian hardwood floors and black stainless steel appliances.