First time multi-unit buyer needs advice

[Hoshang Hafizi]

I need help with my first multiunit property. I am under contract and hoping to get some guidance.

Price is $490k in San Antonio, TX. It is furnished turnkey and looks as if it was planned for STR. However, the seller says he never did STR. The property is zoned as a SFH, but in reality it is a duplex with 1/1 on each side.

My lender did an appraisal for the property as a duplex and it came at $497k. However, they requested to do a second appraisal because it was actually zoned as a SFH. The second appraisal is in the process.

The seller yesterday asked me for a signed letter acknowledging I know it is a SFH. Which raised some red flags for me.

My concern is I don't know the real reason why the seller is selling the property. Him asking for a signed letter might be to cover himself against anything in the future. He had listed the property as SFH AND Multifamily on the MLS.

My question is would this cause a problem for me if it is zoned as SFH. Can I still househack it as either STR or MTR?

Is it difficult to get it zoned as duplex later? 

I don't want to be stuck with a massive payment because I can't househack.

Thank you in advance for your time

[Loren Polito]

Quote from @Hoshang Hafizi:

I need help with my first multiunit property. I am under contract and hoping to get some guidance.

Price is $490k in San Antonio, TX. It is furnished turnkey and looks as if it was planned for STR. However, the seller says he never did STR. The property is zoned as a SFH, but in reality it is a duplex with 1/1 on each side.

My lender did an appraisal for the property as a duplex and it came at $497k. However, they requested to do a second appraisal because it was actually zoned as a SFH. The second appraisal is in the process.

The seller yesterday asked me for a signed letter acknowledging I know it is a SFH. Which raised some red flags for me.

My concern is I don't know the real reason why the seller is selling the property. Him asking for a signed letter might be to cover himself against anything in the future. He had listed the property as SFH AND Multifamily on the MLS.

My question is would this cause a problem for me if it is zoned as SFH. Can I still househack it as either STR or MTR?

Is it difficult to get it zoned as duplex later? 

I don't want to be stuck with a massive payment because I can't househack.

Thank you in advance for your time

I would give the city a call and get clarification on the zoning before your option period is up. Sometimes properties can use a non conforming use and be used as a multifamily property even if it’s zoned as single family. It’s very difficult to get properties rezoned and if it’s zoned incorrectly lenders will usually not lend on the property. Your best bet is to talk with the zoning department and let them know the situation.