Usually the locations of such properties limit your tenant demographic which can bring everything from late rents, damages, lease compliance issues, to evictions and higher vacancy times (sometimes all of the above.)

Also, check with zoning and code compliance to make sure this is a permitted legal duplex.

Petersburg did, but if the city tweaks its law it may lose its grandfathered status, said Todd Yost, the city's codes compliance assistance director.""

There is a magic line which exists between 2 and 3 family properties in regards to code, zoning and ADA compliance.

A now defunct gas station is on the property and we have found through our due diligence that the tanks have needed to be removed for 4 years but no action has been taken.So in order for us to be in compliance with Arkansas UST division after purchasing, we'll have to dig these things up and any contaminated soil around them, remove the gas pumps, island, etc.!

Bank regulators will insist on compliance and it won't really matter what a loan committee thinks for a violation of state or federal law.To my knowledge, there are no loan underwriting requirements that contradict any state or federal law, and there won't be, since state law trumps underwriting guidelines.Since government loans are usually sold with servicing retained or released the effects of various loan risks with a portfolio lender will not be as important, even if the bank is fueling the area.

Someone that can indemnify us for non-compliance when we rely on their policies/procedures would be the best.Any thoughts?

They'll have state specific leases that will make sure you're in compliance with all the laws in your jurisdiction.

There may be additional ways as well, but those are the 3 primary strategies that jump to my mind.Regardless of how you're going to approach this, unless you are doing a loan from each investors to you or your company, you're going to need to get a lawyer involved...right now to ensure you are in compliance with all the applicable rules & regs.

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