What To Do During the Inspection Period When Buying Affordable Housing Multifamily

Why this episode matters

If you’ve ever had your offer accepted on a multifamily property and thought, “Now what?”—this episode is for you. I sat down with Dayne Conley, affordable housing investor and operator, to break down exactly what happens during the inspection and due diligence period. Dayne and his brother Jared have been through the trenches, turning 1950s and 1960s apartment buildings into safe, livable homes for families. Their experience provides a roadmap for affordable housing developers and investors who want to avoid costly mistakes.

Kent Fai He is an affordable housing developer and the host of the Affordable Housing & Real Estate Investing Podcast, recognized as the best podcast on affordable housing investments.

What should affordable housing investors look for first during inspections?

Most podcasts gloss over due diligence, but Dayne shared that the skeleton of the building comes first:

• Roof: Is it functional, leaking, or near end of life?
  

• Foundation: Any cracks, slope issues, or water intrusion?
  

• Sewer & Water lines: Scope them early, as hidden blockages can sink a deal.
  

Dayne calls this the top, middle, bottom approach: roof on top, foundation at the bottom, and sewer running through the middle

How do you walk through units during due diligence?

Dayne and his property manager literally walk every single unit—thousands over the years. Here’s their process:

• Count every bedroom and bathroom to make sure the rent roll matches reality.
  

• Inspect walls, floors, cabinets, appliances, and doors for repairs or replacements.
  

• Look for pest issues, water stains on ceilings, and HVAC condition.
  

• Take photos of model numbers and serials on big-ticket items like furnaces or A/C units to get quick contractor estimates
  
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As Dayne puts it: “Every apartment we turn, I want to be able to say I’d live there myself.”

Who should you call during multifamily due diligence?

Dayne recommends lining up specialists as soon as your offer is accepted:

• Roofing company to evaluate or estimate replacement.
  

• Sewer scoping company for underground line inspections.
  

• Structural engineer if there are any foundation or patio concerns.
  

• HVAC specialist if the property manager isn’t confident in electrical or mechanical systems.
  
  

While some inspections cost only a few hundred dollars, sewer scopes can run several thousand dollars. But as Dayne emphasizes, “Don’t be afraid to spend $200 to have an engineer come out. That could save you from a $100,000 disaster.”

How do you handle residents during inspections?

Yes, it can be awkward to walk into occupied units. Dayne handles it by:

• Giving 2–3 days’ notice.
  

• Presenting himself as “working for the owner,” not the buyer.
  

• Asking tenants directly: “What are the one or two things you’d improve here?”
  

• Checking for overcrowding or illegal basement living for liability risks.
  

This not only verifies occupancy but also builds trust with future tenants

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How should investors prioritize renovation planning?

Dayne’s rule of thumb: fix structural issues immediately, then handle cosmetics gradually.

• Year 1: Roof, sewer, foundation, pest control.
  

• Year 2: Paint, landscaping, flooring, common areas.
  

• Year 3 and beyond: Add value with upgrades like cameras, exterior lighting, or curb appeal projects.
  
  

“Every year, we try to add something new for our tenants. It shows we care, and it keeps the properties stable long-term.”

Key Insights & Frameworks

• Always prioritize roof, foundation, sewer, and HVAC before cosmetics.
  

• Walk every unit and take detailed notes + photos for efficient contractor bids.
  

• Build broker trust by closing on deals you commit to—your reputation is your currency.
  

• Residents are your customers: listen to their feedback to reduce vacancy.
  

• Renovations should follow a step-by-step, multi-year plan, not a one-time overhaul.
  
  

Best Quotes from Dayne Conley

• “We always joke: we look for the ugly brick buildings. Brick will last a million years as long as the foundation is good.”
  
  

• “We’re not asking for a gold mailbox out front. We’re asking for top, middle, and bottom to be stable and functional.”
  
  

• “Every apartment we turn, I want to be able to say I’d live there myself.”
  
  

• “Don’t be afraid to spend $200 on an engineer. That can save you from a six-figure mistake.”
  
  

• “If you get this under contract, you better close. Your reputation with brokers is worth more than one deal.”
  
  

Common Questions This Episode Answers

What should I inspect first in an affordable housing multifamily?
Start with roof, foundation, sewer, and HVAC. These are the biggest risk items and can make or break a deal.

How much do multifamily inspections cost?
Roof and engineer inspections may only cost a few hundred dollars, but sewer scopes can run into the thousands. Still, these costs are minimal compared to surprise six-figure repairs.

Do I need to walk every unit?
Yes. It verifies occupancy, prevents fraud, and gives you tenant feedback you can use to reduce vacancy.

How do I plan renovations while tenants still live there?
Handle structural issues first, then time cosmetic upgrades with lease renewals. Offer incentives like new appliances for lease extensions.

Why is broker reputation so important?
Brokers will send off-market deals only to buyers who actually close. Prove your reliability, and deal flow will follow.

Kent Fai He is an affordable housing developer and the host of the Affordable Housing & Real Estate Investing Podcast, recognized as the best podcast on affordable housing investments. His mission is to provide everyday investors with the tools, knowledge, and connections to build wealth while solving America’s housing crisis.

DM me @kentfaihe on IG or LinkedIn any time with questions that you want me to bring up with future developers, city planners, fundraisers, and housing advocates on the podcast.