Zoning issues with a positive cash flow property
Hi all, I live in Montreal area and the market is difficult right now. Whenever I see a property that is well located and below my budget, the cash flow analysis leaves me disappointed.
I found a great deal, so I thought. 5 doors, in two buildings next to each other. After crunching the numbers, everything looks perfect.
My real estate broker however just came back to me with some news: the zoning of the sector only allows the construction of one of the 2 buildings on that land. The 2nd building benefits from a right acquired since its construction. What it means is that if there's a fire or an event that causes the demolition of one building, the reconstruction of a 2nd building will not be possible.
What would you do? Would you still go for it, knowing the probability of that to happen is llow?
Thanks.