HELP! Single Family 4 Bedroom - Only Permitted for 3 Bedroom

[Matt Hindt]

Help. First time investor here and have a question. I am looking at a 4 bedroom/2 bathroom house for sale. If I look at 4 bedroom rentals in the area the numbers work (rentals are approximately $1,250 for a 4 bedroom). However, the tax value is approximately 60% of the asking price and that threw up a red flag for me. After digging a little further, I found out that the house in only permitted for 3 bedrooms. The 3 bedroom rentals are approximately $800/month. That's $450/month less cash flow and the numbers don't work unless I get a very lowball offer accepted. Do you think I would be able to get a 4 bedroom rental price? Or will the permitting issue bite me?

My thoughts - make an offer based on the 4 bedrooms and put a contingency in the offer that seller must get the 4th bedroom permitted prior to closing. My guess is they will deny because they don't want to get it inspected at this point since the walls are closed up. 

Thoughts? Comments? Any help is greatly appreciated!