I would warn that the non-permitted garage conversion could give you trouble with the city inspector so i would be very leary of doing this particular deal with the info you provided.

In my leases I clearly state that tenants may not run a home business, I would recommend you do the same unless you have worked out an agreement with the tenant that allows them to run a business and in that case, spell out exactly what business is allowed and that no other business is permitted.

The co-op does not permit rentals, so if things were delayed it might cause a problem.

We finished our basement 5 or 6 years ago and got permits and inspections and are paying taxes on it.

Only exception to that is the fact that you say it is already 3 layers - in many places only 2 layers are permitted by code.

Your budget and whether or not you have someone to pull permits for you could be factors.

You would probably need to find out about permits and licensing... after making sure there are not zoning issues using a SFR for an (I assume) assisted living center.

I'm wondering if the contractor will have an "escape" clause with regards to delays of permits and inspectors, things out of their control.

I know some rehabbers who don't pull permits and have other business practices that make me cringe... so it doesn't surprise me that a company running an outsourced function would cut corners.

But... i went to look at the deed recorder's office of NY for my info on who owns the mystery SFR and found there are no phone calls permitted to that office.