If the septic system on either house ever went out, then it is questionable whether the future owner of the property with the faulty septic system would be able to get a new septic system installed.I have considered hiring a zoning attorney to see if he could figure out a way to get the parcel rezoned to create two separate PINs and have been told this would need to be approved by the planning/zoning commission.

Seriously though, this sounds like something an REO bank would do on a short sale approval. 

Now, if you were a block or 2 into jersey city which has legalized them and is charging an occupancy tax then that would be a good move.

How long does it take to take legal steps against this seller?

I asked about a FHA 203 k loan pre-approval and he just gave me the run around about how I’ll pay more with that loan.

Can I transform this property into a 2-3 unit multifamily, legally speaking?

In the states where I am licensed, it is perfectly legal to have this ability, but a variable rate commission must be agreed to in the listing agreement, and must be disclosed in the MLS. 

I have a construction loan approved already.

Hey BP,As a Canadian if I were to buy a property in the USA am I legally allowed to repair/work on it myself?

I played around with some of the ways of looking at value in the Introduction to Real Estate Analysis article by J Scott, but whenever I think of an offer I get worried I am either insulting him or giving away all my hard work (3 years of time assembling lots and getting it through city approvals, and serving as an uncompensated GC for net zero energy certification and most of the site work).