I work with lenders that can do both with certain guidelines.

Of note, this is why we have to adhere to "underwriting guidelines".

Verify the studio is legally permitted as a separate dwelling unit with its own address, kitchen, bathroom, and separate utilities/entrance—many "studio apartments" in Florida are unpermitted conversions that violate zoning and could result in fines or forced removal.

Are there legal considerations I should be aware of before even starting this conversation?

It’s great to have someone with your experience and legal background in the mix.

Do not rely on it as legal advice.

FHA guidelines will tell you what is "livable".

We have legal assistance lined up to start the removal process on closing day.

Be cautious with how much control or decision-making they have to avoid crossing into partnership territory from a legal or tax standpoint.

Both buildings are included under the same address.Can I legally insure the 1 bed 1 bath as a shop even if I am renting it out, or does it have to be insured as a separate dwelling?