Hey,If "building class designation" is the same as zoning, then this seems like it can definitely be appraised as a two family, with both the legal and actual designation as a two family.Depending where in NYC, that may not help your valuation, as primary residences sometimes sell for more than investment properties, so check that out before challenging the appraisal and definitely before paying for another one.Double check all this with your lender/broker as well.Best of luck!

There are not enough Gen Z-ers to replace them, and that puts pressure on (legal citizens) wages, partially offset by immigration.

If a landlord needs to enter a property for an inspection or repair, a two-day notice is required.Our Governor passed anti-squatting legislation a few months ago which allows owners to have the police remove them as opposed to before where it was considered a legal issue for attorney's to deal with.

I know I will need to get some legal advice, but I am really looking for some input on where I should even start. 

If the seller is trying to avoid legal issues with the city for illegally operating a property I would get out of that.

First, the tenants signed a legally binding contract and do not just get to walk away on a whim.

One block may be legal, the next block may not be.

That will dramatically change the nature of the wholesaling business with the legal compliance factor that agents need to comply with.

I am kind of stuck on where I should lead him next, since he's busy with school and sports he doesn't have time for a job.

So if lots of parking, ideally walking distance to busses or transportation to cut down on cars, you might get away with it (legally).Operationally;  this is a can of worms to manage.