Is it a 4 unit or a 6 unit?

[John Adamkewitz]

I looked at an interesting but complicated fsbo, multi property yesterday and I'm considering an offer.

It was built as a 6 unit with 2, 1/1's underground, with legal egress windows in the bedrooms. It has the 4 upper 2/1 unit's rented with the 2 lower 1/1 unit's vacant.

The reason for the 2 vacancy's, is a Multi Family Parking Ordinance that states, "One parking space for each unit and an additional space for each bedroom". The ordinance was adopted prior to the last sale. I only count 11 parking spaces currently, with little room for any additional spaces. Leaving 1 space short just to comply with the 4 unit's currently rented. Penalty's can be $100 per day, per violation.

The anxious owner of 9 years lives 125 miles away and is financed with commercial money, the property is also being overtaxed as a 6 unit, when it cannot legally be a 6 unit because of the parking issue. I would argue the property taxes on a grm and purchase price basis and probably win.

If I can buy this at a 4 unit price, how would I get it to finance as a 4 unit and get the more favorable terms? Then revisit the parking issue later, and what effect would turning a conventional financed property, into a 6 unit have on the mortgage?

John