Need some MF advice please!

[Matt M.]

Hey guys,

I’m looking at a 3 unit this afternoon. I only own SFRs, and this place is fully occupied. 1-1bd, 2-2bd. No estoppel available, not much information available. 1 tenant says has a lease, 1 no lease, 1 “thinks” she has a lease from 15 years ago. Rents are pretty low, owner pays all utilities- there’s one heating system, 1 panel, 1 water meter. The units are dated, exterior looks pretty good, roof is new. It does not appear economically feasible to separate utilities. If I can get it cheap enough (it’s listed low IMO), I’m guessing because of the utilities, and owned by a trust and I’m guessing the owners are elderly, no estoppel, etc. my plan would be to try and get it at a decent deal, remove tenants one by one, renovate units, raise rents. Without separating utilities, would you guys be interested, and how can I protect myself from not getting beat up on utilities? If utilities were separate, I’d pay listing price..

[Johann Jells]

My standard rant on "utilities Included" is that the cost isn't what you pay, it's the difference between what you pay and what's built into the rent.  That said, I bet separating electric is pretty feasible, far more than plumbing. Separating heat depends on a a lot of factors.