Buying an apartment building is no different from buying a single family home when it comes to avoiding a lemon – except the lemon is bigger and can be a more costly headache.

Do Your Due Diligence
You should always negotiate a due diligence period to get the best deal possible. During the due diligence period, the buyer, at the buyers expense, has the right to enter the property together with anyone they choose in order to inspect the property.

Tests such as those for environmental problems, the soil, the air quality, hydrocarbon, toxic chemicals, carbon, asbestos, lead based paint, major systems and any other tests the buyer may deem necessary for the commercial real estate property are then conducted. Apartment investing is something that needs to be thoroughly checked out before the sale so there are no surprises that will end with the loss of tenants and money because the structure isn't habitable.

Due diligence is a way for the commercial real estate investor to be certain there are no hidden problems. The process should be taken full advantage of every time a commercial real estate building is being considered. If you are a wise apartment building investor, you will be prepared for this and have experts to check for problems in the building. When one is found, the selling price may be lowered or you can request that the seller make the corrections prior to the sale.

Hidden Problems
There can be many unseen problems when buying commercial real estate. A seemingly small problem such as lead paint can mean that until this paint is removed by professionals who are licensed to handle such a job, no tenants will be allowed to live in the building. This means that investing in a building such as this, unless it's at a price that reflects the problem, should be considered carefully.

The buyer should be aware of all of the problems and negotiate a price that reflects the need to do the remodeling work on the units. When that is completed, the units can then be rented at a higher rate than previously. A good real estate investor will have had this planned out from the beginning.

Hire a Professional Inspection Service
Unless you are a contractor or otherwise very experienced with building structures and systems, you should bring a professional to inspect the commercial real estate property. This may even involve more than one inspector that specializes. Ask for referrals and check them out. Verify their experience and licensing.

The inspector should give you a written report, often with photographs of the building components, either at the end of the inspection or within a few days of the inspection. Make sure he reviews his findings with you, especially the items he has tagged as problems so you completely understand what the problem is and what it will take to repair the item in terms of time and cost.

With the inspection report in hand, you can re-negotiate with the seller a lower price or even back out of the deal altogether. Always know what type of building you are getting into by exercising your due diligence.