If I understand the limitations correctly, you can sell to an owner occupant in the future without having to convert it back to a duplex...of course that limits your buyer pool.

Since a building built modularly has the same permitting process and certificate of occupancy requirements as a site built project I do not imagine the appraisal value will be different.

I would rather do lease options with an owner occupant rather than doing business with another investor doing the same thing I am doing.

What if right after he'd bought we had a big shock to the economy, and a recession with dropping occupancy?

Disgruntled tenants have no limits, and are happy to report your "illegal" anything, so make sure you're doing this by the books.And I'd advertise it as a duplex once the permits and occupancy certificate are granted.

Occupancy permit yanked or condemned.3.

But I can pay cash for it and it already has 100% occupancy. 

The occupant has lived there for more than 6 months and meets the definition of tenant under the statute....(1) As used in this law {subtitle}, “tenant” means a tenant, subtenant, lessee, sublessee, or otherperson entitled to the possession, occupancy or the benefits thereof, of any rental unit ownedby another person, and who has resided therein for not less than 6 months.

His exit strategy is longer-term buy&hold.The goal is to structure a deal where we perform owner financing on a property that has a backing mortgage.I haven't talked to the lender about it, but was curious about whether, in this case, that was even possible.I believe our vibrant community here can provide useful perspectives, and thanks in advance If I understand the question correctly, you would go ahead and do the refinance to long term financing, (be aware that the note probably has a "Due on Sale" clause), you would meet the minimum occupancy term requirement, sometimes 6 months, sometimes 1 year, (read the agreement) and then sell to your buyer on a Wrap.

One will be ready for Feb. 1 occupancy (already rented), one we are aiming for March 1.- We are closing on our first duplex this week.