Short Sale w/ unpermitted bedroom? Any advice?

[Josef S.]

My first post...I must say, after reading BiggerPockets for the past few weeks...it's pretty awesome...couldn't help but become a member myself...

Anyhow, I have decided to pursue the path of buying SFR (in CA) with the intent of flipping them...I'm quite new to this particular area of real estate but have years of experience in commercial/multi family. Hence, I do have a crew that I trust which will be doing all the rehab work. I just tried to purchase my first house...someone outbidded me and made an offer for listing price...

However, I have now found another property that I think has much potential, however there is an issue with it. It is a short sale, however on the listing one of the bedrooms is not included. (Instead of 3 bedrooms it shows as only having 2 bedrooms). I did some research and got copies of the permits pulled and found out something rather interesting...

There was a permit done for an addition to the house, which is where the 3rd bedroom is located. I believe that because they did the permit simply as an addition and not for a bedroom this is why the 3rd bedroom doesn't show under the county records? (I am assuming this, any insight would be appreciated). If that assumption is correct, it leads me to my next question...If I purchase the house, could I do my rehab work and then list it as a 3 bedroom house? (Considering that the additonal space where the 3rd bedroom is located was permitted) OR would I need to have the city inspector come out and get a permit done solely for the 3rd bedroom? And then I could list it as a 3 bedroom? I am looking to put an offer on it ASAP, so any thoughts or insight would be much appreciated...