Those lenders are usually more savvy and may ask you to provide a zoning certificate from the building department confirming the number of legal units (which sounds like it's 5 rather than 7).

The fourplex only exists because the zoning has been grandfathered in, on paper it is R2.This is my understanding of how SB 330 would affect my project:If I raze the building, I can't build anything less than four units ("An affected city or an affected county shall not approve a housing development project that will require the demolition of occupied or vacant protected units, unless all of the following apply: (A) (i) The project will replace all existing or demolished protected units.)Additionally, because the units exist under rent control (market rate), the rents of the new buildings in the future must also be rent controlled.

Why should they pay rent to live in a construction zone when they could just move somewhere else? 

I understand folks should be paid for the work they do, but 55 basis points off the mark on the offer as presented is a red flag.  

I just had a red wine stain at one of my properties.

@Thiago Oliveira, the $1,200 upfront fee is a major red flag for me. 

My concern is that I am in a district zoned for single family. 

It is flood zone x and I also need to perform ensure that the property is actually renting for what they say it is. 

Even if they do pay in full, is there any red flags along the way?

Purchase price: $140,000 Cash invested: $33,000 single family home, got it really cheap because there was a hoarder in it. located in a developement zone one house off the spokane river.