Buying a property with unpermitted work in Philly

[Jorge Lee]

Hi,

I'm new to Philadelphia investing and have a few questions before I submit an offer. I hope someone with experience can help.

The property is a 3-bedroom, 1-bathroom house according to public records, but the current owner converted it into a 2-bedroom, 2-bathroom about 10 years ago without permits and updates to the records.

Questions:

1.  I'm planning to use a conventional loan. Will the property pass appraisal and inspections, and will I get funded at closing? I've heard I might need to buy with cash, which confuses me.
2. Could this lead to issues with the closing process, such as problems with deed recording or property assessment?
3. Are there any potential risks after I take ownership, like monetary penalties from the city? What if I want to do a full rehab in the future and the unpermitted work is discovered?
4. Can I ask the seller to legalize the unpermitted work before closing? How can I apply for the process with the city? What is the likelihood of approval, and what are the time and cost implications? What is the process like?

Thank you in advance for your help!