Check With Planning And Zoning

There is an old saying that the difference between a novice and a seasoned investor is the number of scars and bruises you have. While I am much more optimistic than that about life as an investor, I'd like to share something I learned from a challenging experience with a property. "So, see this scar right here? Let me tell you about the battle I had where I got it."
A few years ago, I bought a triplex from another investor. The price was reasonable, I got seller finance with a minimal down payment--the seller was going through a divorce and said he had to liquidate some properties.
After doing standard due diligence, I felt comfortable I was making a solid purchase. At closing, I had a few questions, but nothing was said that raised any concerns on my part.
Almost two years passed, I put money into the property to improve it, the property was built in the 60's, so a few upgrades were in order.
Suddenly, I start receiving letters from the City. They are informing me that I am improperly using this property as a triplex, and that I immediately need to convert the property to single family usage. Only the property was never built to be a single family, in fact it had an upstairs unit that is only accessible from the outside, so I'd have to install a fire pole or a circular staircase in a very inconvenient place to convert it into an upstairs/downstairs access inside the property--not really something I could or would do to the property. But in doing further research, I discovered that this property had a long history of infractions with the city, and had lost its grandfathering as far as usage THREE DAYS after I had bought the property. The city hadn't even recorded the ownership change, so the previous owner had been notified, but he conveniently failed to inform me that I had a major problem with the city. What's more, he had been negligent in dealing with the issues that caused the problem, and the city had a file that was an inch and a half thick of notices and other correspondence that this seller was well aware of when he sold me the property.
I quickly perceived myself as being in the middle of a problem that had only two solutions. Either I had to fight city hall, who were already showing that they were going to be very unbending with this issue, or I needed to sue the seller for improper disclosure regarding the property.
Well, let's fast-forward through my pain, and just say that after dragging his feet at every juncture, the seller was finally pressured by the court to settle, I won the case, but as is so often the case, did not collect everything necessary to reimburse my litigation costs.
It was a bit of a costly training seminar for me, and the aggravation was the most costly part of it. The lesson, that I hope each of you will learn, is to include contact with the City Planning and Zoning department to see if they happen to have a file an inch and a half thick on the property you are about to buy. And whenever avoidable, don't fight city hall.
I have since moved on from this property to more profitable ventures, and I have found that real estate investing is still the most rewarding industry I have ever been involved with. Yes, we sometimes come out with battle scars, but I always feel like a hero each time I solve problems for either a buyer or a seller, and I get PAID for doing so. That's a pretty exciting business to be a part of!!!!