I plan to tell them the inspections need to be completed prior to any cleaning service or move in.

I reached out to a realtor I know in Prescott (not where I'm investing though) and they said doing this without permits wouldn't be an issue for resale or appraisal purposes based on prior experiences.

I want to be clear that we will NEVER share details from the prior transaction with you or any lender. 

But, the new units will be grandfathered in, if they were put into place prior to 2025.So, you've been given outdated info. 

If the STR applicant can demonstrate primary occupancy of the ADU or if the ADU was completed prior to 2017 then the ADU can be used as an STR for 120 days and possibly longer with extended home-sharing approval.

Whenever you sell down the road, the IRS will consider your eligibility for a 1031 by looking at your prior tax returns to see that you held it for investment. 

What made this opportunity particularly enticing was my prior experience managing this exact duplex for the same investor over a span of three years.The property itself is a 1950s duplex that underwent significant renovations in 2017.

Most suburbs here have city inspections required prior to the sale taking place, Chicago proper does not. 

@Ryan Cleary,In a prior life before 1031 exchanges, I worked with a national firm that worked to evict thousands of tenants from underperforming properties across the country. 

He has been a dentist for over 10 years.  18 months prior he purchased a dental practice from a retiring colleague.