3 dwellings on a lot that's zoned for 2 dwellings

[Chris Ready]

Hi BP,

I heard from a motivated seller who wants to sell a multifamily property.

They report there are 3 units on the lot - a 2/1 and 2 x 1/1.

In doing my due diligence I've noticed that only 2 buildings appear on the tax records (a 2/1 and a 1/1) and that the lot is zoned 'MDR' which according to the city's municipal code can mean 2 single-family dwellings or 2 2-family dwellings or one single-family dwelling and one 2-family dwelling may be constructed thereon and so used.

From another source it said the zoning is LRR2* but I'm not familiar with what this means. Does anyone know?

From street view it's pretty clear there are 3 dwellings and one looks to be a converted garage which I assume was not legally permitted.

I have not come across this situation and wondered how I should proceed with this? Submit an offer that reflects the lesser rent from only 2 units less any costs to remove the illegal rooms/dwelling? Or not touch it with a barge pole?

Thanks,

Chris