I was reading your blog as I said before, and I like it.You're very aware of humans' reactions, motivations, expectations, etc..

It seems like we have a lot of flexibility in setting the replacement value for the dwelling.

Fair housing laws state:If you or someone associated with you:Have a physical or mental disability (including hearing, mobility and visual impairments, chronic alcoholism, chronic mental illness, AIDS, AIDS Related Complex and mental retardation) that substantially limits one or more major life activitiesHave a record of such a disability orAre regarded as having such a disabilityyour landlord may not:Refuse to let you make reasonable modifications to your dwelling or common use areas, at your expense, if necessary for the disabled person to use the housing.

Let them know you're a human and not a robot.

Once you find what the zoning is you can look up the zoning code and read rules on additional dwelling units.

I'm thinking about it more along the lines of: The initial tenant can qualify on his own, there is some added risk and wear and tear on the dwelling with three tenants instead of one - Perhaps a slight rent increase would make all parties happy?

@Jon Holdman I agree that a personal dwelling should never be considered an investment, but depending on the type of multi-family property, it very well could have been a good investment.

Allows dwelling units above ground floor. )When we bought it is was partially converted to a SFH - so we went through hell with the appraisal.

Some Dwelling Policies and Tenant Policies will have coverages for this circumstance.

The R-1 is not really an issue, a duplex may be in an R-2 designation there but the structure is there, it's grandfathered or an approved dwelling being 1-4 SFD.