It is in my local market in an area that is not a war zone but also not the best neighborhood in town.

Looks like zoning will allow 35 units per acre.

And you ask to talk to the on duty planner.. show them the map.. then ask your questions.. they will then usually hand you the code for that zoning code that the parcel is in and you can read that. 

So I decide to go to the zoning office to see what can be done if my contractor disappears in the middle of a job.

For example knob and tube wiring or non-conforming zoning with no potential for rebuild.

Red flags came to my mind, when he put on the estimate a 3.5 Interest rate and me being extremely well qualified I should be getting market rate.

I have an opportunity to buy a  5 acre lot zoned for mobile homes, but it is only partly developed.

I see red flags but would want more info to give a yes or a no. 

However, the appraiser have a note that said zoning law prevent my home to be rented to multiple tenants/families. 

In Houston, I stay away from homes that have flooded as they are most likely in a flood zone and you'll have the extra expense of flood insurance.