I made that assumption, twice.

It's very likely that the lot in question IS already zoned Commercial but an employee of the city made a wrong assumption when mapping and recording about a decade ago.

I'm not a mortgage broker, nor do I play one on TV - search the forums for previous threads on VA loan and see if anybody's name continually pops up with useful advice then reach out to them.Continuing my assumptions, let's say you find a duplex in your area for $300k. 

One added detail is this other couple are family (my husband's sister) so we need everything written and laid out clearly but with the assumption we will operate within these boundaries without going to court...meaning we don't need every word to be air tight but need it to be clear cut (as a side note I'm not interested in hearing about horror stories of doing business with family, I have done real estate business with family for over ten years and am fine with it). 

I mean it's money, but if it takes 6 months to make 10K, then you're making something around $9/hr over the span of 6 months closing to closing (many assumptions made).  

My assumptions are below and are based on scanning website listings and calling other landlords.

The preapproval will of course only be as good as that assumption. 

I need to make another assumption here as far as loan numbers. $2,500,000 on the first mortgage and $500,000 on the second mortgage for a total of $3 million in financing.

I was wondering if someone out there with some experience could put a second set of eyes on it and see if my assumptions are close to right?

I came to the assumption that when he started the carpet on fire from his cigarette burns he was putting it out with his drinks!