Help - Rehabbing duplex as SFR - Is this an issue?

[Dan Palumbo]

I am currently under contract for a property in Indianapolis that is zoned as a duplex but currently gutted and setup as a single family dwelling. My intention is to flip it by rehabbing it as a single family due to it comping well with single families vs duplexes(higher spread) and the fact that the dividing wall was already torn down. I have a couple of questions with this approach. 

1. When selling the property: will this be an issue with lenders if a property is zoned duplex but setup as single fam?

2. How will an appraiser comp the property if zoned duplex but setup as single fam?

3. Does filing a change of use permit change either of the two questions above?

I am currently looking into the process\cost of rezoning but it doesn't seem cost effective. Ideally I wouldn't have to rezone. I have asked a RE lawyer in the area to look into it as well as reaching out to some appraisers but figured the BP family might have some good insight. 

Thank you.

[Dan Palumbo]

Thank you Mike, the property is zoned D8 which I was able to confirm does permit SFR use. I spoke with a lawyer who confirmed with Indy zoning that we should pull structural permits (few hundred $$) and file for change of use.

Regardless of permits, I was able to confirm with some appraisers today that it will be comped as best use, which would mean as a SFR after rehab. Thanks for the responses.