Duplex zoned single family
I'm sure the answer to this question will vary by location, but here goes. We are under contract for a duplex with an additional carriage house apartment in Louisville, Kentucky. This will be a live-in flip, and we plan to rent the carriage house the whole time we are there- probably about five years. We plan to rent the first floor of the duplex for about a year, at which point we will convert the house back to single family.
Our appraisal took forever, and we almost had to extend our contract because they would not give us an ETA. Finally got it back, and the house is zoned R5, which is a single-family residence. Basically the whole street and a few neighboring streets are also all zoned R5. I know for a fact that there are three 4+/- unit apartment buildings on the same block as this house. They were built as multi family and are used as multi family.
I feel like this is a dumb question, especially with my background in architecture, but I work in commercial and I haven't dealt personally with any zoning issues. What kind of problems would we have if we continue to rent out this house which has been rented for years and years? It is separately metered, and I just don't understand how that was even done if the zoning was wrong. I know we can have the zoning changed, but I really don't want to go through that if it's not necessary. The area of Louisville that this house is in – the Highlands – is full of rentals and multi family homes.
Right now the bank is working on trying to change the loan from a duplex to a single family so that we can close. That would actually be beneficial for us because the closing cost should be less. It looks like we are going to have to extend the contract either way, as it is up tomorrow.
I appreciate any insight.