Info needed - buying 4-plex with potentially unpermitted units

[Chris Mackovjak]

Hey Portland BP Crew - 

I'm in contract to purchase an investment 4-plex in North Portland. Here are the basic details:

- The county tax records have it listed as a 5-plex

- Portland maps has it listed as multifamily 5-8 units 

- Zoning is R5

- Sellers bought it 20 years ago and operated it as a 5-plex since

- According to the person I talked to at Bureau of Development services (the city), the city records show the property as a duplex with potentially 3 additional unpermitted units

- There are 4 gas meters (unit in basement has electric heat) but just 2 electric meters. Sellers include water and electricity in rent 

- There are permits available on Portland Maps from the early 1960s that list 5 bathrooms which seems to imply there have been 5 units for a long time. I'm still learning about this but thought I'd heard that if a building was permitted before a certain date, it could potentially be grandfathered in (as a legal but non-conforming 5-plex, for example) even though it wouldn't be allowed with the current zoning (R5).

- The basement unit is not occupied and being used at tenant storage - my strategy would be to buy as a 4-plex so I can use residential financing and then, potentially, get the basement unit updated and converted back into to a rental 

My question: has anyone else dealt with either proving that these additional 3 units were originally permitted (through locating old permits, etc) or has anyone dealt with retroactively permitting additional units in a situation like this? I'm in my due diligence period but hoping to get a direction on the property soon. 

All thoughts are welcome and appreciated - thanks in advance! 

~Chris Mack