Commercial lending requirements for a 5 unit located in SF zoning

[Jeff Hornberger]

HI BP friends, I need some insight. Im currently about to list a 5 unit apartment building for sale in Spokane WA. The property is an ex adult family home that has been converted 10 times over. It sits on 2 acres and located right behind this property are apartments. The seller swore up and down it was zoned multi-family etc but when I did some homework on the zoning it actually turned out that it was zoned single family and that currently it has a non-conforming use granted on it allowing it to remain a 5 unit building until someone rebuilds or if its destroyed and one had to rebuild. They would only be able to rebuild a single family home. Im guessing this will be a sticking point for any lender because they will no longer to be able to build a 5 unit building should something major happen to the house.. Does anyone have experience with this type of a scenario. Should I only be offering this property as cash terms only? Thanks in advance for the replies! 

[Jeff Hornberger]

@Deanna Joy, @Brody Jett, Thanks guys for your responses. Much appreciated. Wanted to follow up and let you know what I found out.. Last week I reached out to commercial lender and had them ask their underwriting dep't if they would see any issue with underwriting this deal and he said they wouldn't have any issues as they would be listed as a loss payee if the place were to ever burn down etc.. I did call Melissa at the city planning dep't and she was really helpful. She actually shared a law with me that stated that even if the property were to burn down a future buyer would still be able to construct a 5 unit building because it had legal non-conforming use permitted. So really there is no concern on this any more as I see it. It did raise a bunch of questions but I think I got them sorted out it looks like.. 

Thanks again!