I live in the Boston area and I’m looking at making an offer on a 4-unit property that has every indication it is a true 4-plex (4 main entrances, 4 identical layouts, 4 gas meters, 4 heating systems, 4 electrical meters/panels + common...but there is no record of it ever being a legal 4 plex.

It may have some merit down the road, if building the infrastructure to do something like this supports the validity of having scaled something to that level, which then can be used for multiple purposes, including but not limited to locating the best buy & hold assets.

The point is valid that if you have real estate that is producing passive losses, you lose those benefits, if you are in the relatively unusual position of actually being able to use them.Originally posted by Tim Menius:Rarely, will a residential rental property produce taxable INCOME, particularly early on.

All those things that you rely on every day such as gas, electricity, water, that can of coke your holding in your hand... in some way shape or form an industrial construction worker had something to do with it.Which brings me to my point.

That can make it very hard to differentiate between a guy running a legitimate business with legitimate backend, and a guy whose sole concern is his gas and cell phone.This can go the other way too, though.

Some gas stations are getting close to the prison decor, they seem to be rather bullet proof.....LOL

Is the claim the first buyer has to the property valid?

If there is gas you might need more, but i'm not 100% on how that works.All smokes need to be on 1 interconnected circuit and depending on the inspector nothing else should be on the circuit.

I know for a fact this is NOT a valid reason for breaking a lease here in CO.

What's absurd and scary is that in another building of mine, with valid state and city inspections before and after purchase, has a basement stair enclosure and door of thin wood alone!