I am in the stage of deal finding and analyzing. I would love to get into multi-units, and due to the lack of multi-units for sale in my area, I've fallen into looking at single family homes with 3-4 bd, 2+ baths, and analyzing properties that could be split into 2 or more units without too much rehab expense.

Does anyone have any experience in this area? Some of these deals appear to have a really good profit margin, despite the fact that all the utilities need to be included (because they can't be split). I feel like I must be missing something--maybe I don't have a full grasp on the rehab budget situation, or something that's not occurring to me. What are some of the pitfalls you've experienced in attempting this type of project?

Check the zoning. Where I am you can't divide a SFR into a multi unit. The planning commission will tell you what you can do or not.

The zoning is a big one to check. The zoning varies from city to city so make sure you contact the city you’re looking in. Another thing to check is let’s say you do split a house top and bottom or side by side you need to build out another kitchen on one of those sides so each side has one that’s extra costs. Drywall is double as expensive as it was before COVID hit so putting up that piece of drywall for a side by side duplex might be a little pricier than before. If you do split a house into a duplex you can also sub meter out the utilities and that way they pay their own. 

Think of ways you can charge more. One guy on BiggerPockets said that he charges each person he rents a room out to cleaning fees. This way he can hire a maid to keep the house clean. Causes less arguments of the people living there because somebody else cleans up after them. Plus you can charge them a little extra to cover the costs of utilities too.

Let’s say you rent out 3-4 rooms, charge each person a $150 a month cleaning fee. They aren’t paying utilities and some people just hate cleaning. Cleaning people shouldn’t be more than $450 a month. Use that extra money towards utilities and cash flow more. If your market allows for this to happen of course.  

Lastly, speak to multiple property managers about rents in your area for both things you’re trying to do. I always recommend speaking to 3. This way your run your numbers accurately and you have multiple different opinions on what rents will go for when you’re done with your project.

Hopefully this gives you some more ideas. Always talk to the city about zoning and speak property managers, and think of ways to make more cash flow.