DO YOUR OWN DUE DILIGENCE!

[Wendell Butler]

When investing in real estate remember to DO YOUR OWN DUE DILIGENCE!

Just had an offer accepted on a nice little multifamily unit property. I was set to do a final walkthrough within 72 hours and start the process to close. I noticed the multifamily was zoned as an R-1 (single family), so I checked the towns zoning bylaws and found it was illegal to have a duplex in that zone in that town. Maybe it had permits to be a duplex, maybe it was grandfathered in, maybe not, but I checked it out to make sure.

After calling the town and speaking to a few building/code enforcement staff, I found this was an illegal duplex with no permits. They already have been notified of this and sent letters to the owners about it.

Now if I continued and bought this property, I would have been on the hook for an illegal duplex - meaning the town could make me rip it apart and convert it back to a single family with my own money.

Safe to say we walked from this property. Remember to always do your due diligence on anything you do, especially in this quick crazy sellers market right now. Realtors, sellers etc. won't give you all the information.

Do not make a mistake which can cost you a lot of money because you got too excited about a property. Always protect yourself!

I am pretty new to investing and if I got caught up in this property that would have been a real bad way to start off my real estate career. 

Anyone else have any stories or lessons they learned similar to this?

[Andrew Syrios]

Amen. Due diligence is super important. We've found properties with unpermitted additions, but that's not uncommon out here. Never bought a duplex that used to be a house and was switched without permits, but have found properties that were considered "legal, nonconforming" and retraded because such status reduces its value.