Looking at purchasing a property that is a double duplex - 4 units, however the suites are not legal - electrical/heating is shared between the two units in each duplex, etc.  It would be a huge project to bring the suites up to legal standards.  The property inspection turned up roof issues - structural sagging, cracked joists, lack of moisture barrier, improper shingling.  I understand the majority of suites are non-conforming and allowed to operate provided they don't cause the city/neighbors issues, however, were I to purchase this property, would I run into problems pulling a building permit to work on the roof, since it would be subject to building inspections etc. and the suites are not up to code?  I am currently told the city is aware of the suites in this particular property and have allowed them thus far.  I am located in BC, Canada, I understand regulations will be somewhat localized.  Thanks.

@Kieran A Kilgour I put a lot of value on buying a purpose built building that doesn't have these types of issues involved. I just don't think this is a useful thing to have to deal with. You would be much better off focusing on a building that doesn't have these issues. 

I would agree unless you are getting an AMAZING deal on this.. I would not take it on..

The way I usually handle something like this is to figure out the value of the building in it's Legal conforming use.. (Probably as a single family) and then add in the cost to bring it back to that use. Changing walls and doors and removing extra kitchens, ect..   If I'm still okay with purchasing the property based on that price then I'd move forward but it rarely works out that way. 

Assume you are going to get caught and have to bring it up to code in the price you are paying.

Ray

I wouldn't count it out just yet. Use this window of opportunity to really do your homework and determine if the deal still makes sense. Many investors are VERY risk averse - but risk is a relative term. What I feel is risky and what you feel is risky could be very different. In its current condition it sounds like there are some known problems. Assuming you're not yet in contract, use this time to be very proactive. True, it sounds like a hot mess. But talk to your building officials about what it would take to make it code conforming - everything from structure to proper zoning. Get quotes on the rehab pieces. You're under no obligation to buy yet, so you can use all these costs and hurdles to determine what you're willing to pay. You may have a distressed seller who needs to unload the property but doesn't have the means or the stamina to deal with the issues. You may be able to use that to your advantage to get it for a price that works for you and solves the seller's problems. We've found a niche that works for us - extremely distressed (as in red tagged, unlivable) properties in a certain area that no one else is interested in. If we can buy them right, the numbers work for us because we know this niche. And like the saying goes, 'you make your money when you buy.' You might have found a diamond in the rough. Or not. But in a hot market, we've found it's worth it to spend the time looking at properties most people won't.