Not permitted addition. What to do?

[Nanda Netto]

Hi! We are are planning on BRRRRing a property in Daytona, FL. It’s a SFR in 1/2 acre land with a detached 2 car garage, with a 1/1 in-law suite on top. The house is R-1 zoning and is a 2 bedroom, 1 bathroom house. There is a huge 3rd “bedroom” addition with two big closets, not insulated, therefore considered as a sun room and most likely not permitted. The laundry is next to it and my plan was to convert it into a second bathroom, actually both into a master. Also as mentioned, on top of the garage, there is a one bedroom, one bathroom, small kitchen and huge living room, that could actually convert into 2 bedrooms, one bathroom, that’s probably not permitted either. The place needs some work as had some termite damage in the past, and although not zoned as multifamily, it has been rented as two separate units, and has two electric meters already. Our plan is to BRRRR with initial acquisition being our own cash. We had termite and regular inspections done at the place and we are waiting for the report. My questions: 1) would be hard to get the permits necessary to upgrade the house from 2/1 to 3/1 and the in-law suite, to even exist and from 1/1 to 2/1? House is on septic, I’m sure this plays a part into this. 2) would this non-permitted situation compromise our finance plans? 3) does insurance companies usually care about permitted or non-permitted additions? We are open to advices from experts that had dealt with this before. We appreciate any help! Thanks!!!