I am looking at a great deal... 25% cash on cash returns or so and a 6 to 7% cap rate in Miami...
The house is a Single Family home (3 bd / 2 br in the county website) that is priced in line with other single family homes around that size in the area.
However, in reality it has 5 livable units - 3 1/1s and 2 studios, with 5 living families in it. 5 bathrooms in total
Given this is a single family home but it's meant for multiple families, should I be careful about a deal like this? is it illegal to have more than 1 family? my lawyer doesn't seem to care too much, and my loan person told me we should be able to get a loan... would there be anything I should be looking into?
Trying to do all the due diligence I should be doing because deal looks pretty juicy, but the owner bought the house beginning of last year and is now trying to sell it... Even if COVID screwed him over a bit, it's pretty sketchy to be letting go off a property that makes so much cash potentially, everything about the house is in good condition and in a highly rentable area. The reason for selling the seller's agent says is "he just wants to get rid of it." That was the same justification the last multifamily house I bought was, it was pretty sketchy too but it ended up working out.
Thanks so much in advance, this will hopefully be my second deal.