Multi-unit properties — duplexes, triplexes, fourplexes — are one of the most common ways buyers in Pasadena and Burbank build long-term wealth through real estate. They’re also one of the easiest deals to misjudge if you’re only looking at the asking price. Here’s how I walk investors through evaluating one.
Start with the real numbers, not the marketed ones
Ask for actual rent rolls, trailing 12-month income and expenses, and copies of current leases — not just a pro-forma projection of what rents “could” be. The gap between projected and actual income is where a lot of deals fall apart after closing.
Understand the local rent stabilization rules
Pasadena has its own rent stabilization ordinance, and rules can differ from neighboring Burbank or Glendale. This affects how much you can raise rents, what notice periods apply, and how you handle a unit turnover. Know the rules for the specific city before you assume you can reposition the property quickly.
Budget for deferred maintenance honestly
Older multi-unit buildings in this area often have original electrical, plumbing, or roofing that’s due for work. A thorough inspection isn’t just about the unit you can see — it’s about the building systems that affect every unit at once.
Run the numbers on both cap rate and cash flow
Cap rate tells you how the property compares to other investments in the market. Actual monthly cash flow, after debt service, tells you whether it works for your specific financing. Both matter, and they don’t always point the same direction.
Financing changes at 5 units
Properties with 2–4 units typically qualify for residential financing. At 5 units and above, you’re in commercial lending territory, with different terms, down payment requirements, and underwriting. Know which side of that line your deal falls on before you get attached to a number.
If you’re looking at a specific property and want a second set of eyes on the numbers, send it my way — I’ve been through this analysis many times and I’m glad to help you think it through.
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