Confidence that there are no major capex "Gotchas" when buying a MF?

[Stephen Anthony]

Hi all. I am currently looking to purchase my first multifamily property (locally), preferably in the 8-20 unit range. I negotiated on a 16-plex about this time last year, but the owner wasn't willing to budge much. I've been researching this for a good year and a half now, it's time to get in the game.

I'm confident in my ability to perform a thorough analysis of the numbers, including viewing the sellers numbers with a great deal of skepticism, conservatively estimating more accurate expenses, and evaluating potential rents for the area.

What I'm finding is making me hesitant each time I walk through a property is the potential replacements/fixes/rehabs that might need to be done that I'm not seeing - the capital expenditure "gotchas" if you will. I've learned one-offs here and there to watch out for - i.e., have a camera run on the sewer line, that's a $10k-$30k repair if bad.

But there's so many potential pitfalls... So my question really is, where do you get the confidence that you're covered for the vast majority of potential issues? If the inspector doesn't find anything before closing you're fine? Have a general contractor evaluate the property top to bottom and give any estimates? Go through a comprehensive checklist of everything to look for and potential costs? (e.g. check the age on each furnace, and expect to replace them for $XX dollars when they are 15 years old?)