Obtaining a CO on a 23% CAP 8 unit we are wanting to buy

[Ryan Edwards]

I'm new to this forum thing so bare with me please.

We have an excellent opportunity on an 8 plex we are probably going to buy. We already have it locked down with an offer, pending the inspection report we get back. It is an awesome investment with a CAP rate of 23% after all costs to fix up (assuming there are no big unforeseen costs).

The building is over 100 years old and has been "remodeled" (or at least has been lived in and lots done to it, new HVAC, etc.) about 10 years ago but has been vacant for at least the last 8 years. So the city is requiring a Certificate of Occupancy (CO) on it.

My question is this; how hard is it to receive this CO from the city? I would like to do the absolute bare minimum in the beginning to the property until we make money on it before we spend money on it.

I have spoken with the city inspectors assistant on the phone and she was absolutely no help and would not let me speak with the city inspector so I am coming to you guys for help. I have also made attempts to e-mail the inspector directly but he will not respond.

Thank you in advance so much for your time on this matter.

[Jon Holdman]

Were those renovations 10 years ago done with permits?

Based on your experience with the building department, I'd guess you're in for some pain.

In most areas when you're dealing with a larger multi-unit building like this you will need to follow the stricter commercial building codes. Most cities here use the IRC (international residential code), but it applies only to SFRs and duplexes. I would consider getting a commercial contractor who's licensed in the city to come inspect the property with you. You may well have to pay them. They can walk through the building with you and discuss what might have to be done to get city approval.