Multi Family Zoning Question

[Christian Pirotte]

I have an off market deal I've been working in the South Seattle area. Obviously a very expensive area but through networking I found an owner of a lake front triplex south of Seattle. There are a few issues:

1. One of the units needs dry wall and a deck before it's complete. Therefore a traditional FHA or VA Loan is off the table. The other two units are complete. The idea would be to complete the home with an FHA 203k and then refi into a VA loan as soon as I'm able to.

2. This was an SFR that the owner converted into a triplex working alongside his contactors. I do not believe he applied for permits for much of the work and the home is not zoned to be a triplex.

Through BP I was able to find a lender willing to work with my DTI ratio to make this work but the fact that this is registered as a SFR is going to hurt my application.

I'm curious of the BP community's thoughts on the zoning issue. The owner is motivated to work a deal and his asking price even with the required rehab is a bargain for Seattle area water front. My biggest concern is if I get approved for this loan and end up having issues with the city due to zoning and permitting issues. I've heard horror stories stemming from lack of permitting. I'd hate to see the opportunity go but I'm going to walk if it's going to be an issue.