Purchasing a legal fourplex with five units

[Joshua Costa]

hey guys I've been in the background reading a lot of blogs for a while. I have learned a lot and I'm about to make an offer on my first multi. So the details on the property are that it's a legal four family but there is 5 units I'm going to be doing FHA financing. Should I be worried about anything? The property is being sold as a "fourplex".

Thanks 

[Timothy Daniels]

Hi Joshua,

Speaking from experience in WA state, which may differ from RI, you should write an offer with a "Feasibility Contingency" of 30-60 days and then ask some questions at the city zoning/planning department.  If you approach them as an agreeable, "by-the-book" type of property owner you may find willingness to work with you and the addition of the fifth unit could be just a matter of permit fees.  If so, that will help you secure financing.  If not...if it's a problem, you present your findings to the seller and negotiate the price downward.  At that point (having received your information) he is obligated to full disclosure, including to disclose any non-permitted work (if he is working with an agent, suggest to the agent what kind of lawsuit could arise from a misleading listing).

All of that said, if you are dependent upon the income of 5 units to make the deal work, confirm it with the city.  You don't want to receive a 'cease and desist' after you've taken title!