I am preparing to make and offer on a property in Los Angeles. The property consists of a main house (around 1000 sq feet) and a separate unit. The separate unit is a one garage attached to a studio with a kitchen and bath. The garage + studio structure was constructed in 1925, with a permit. The main house was built in 1921. The kitchen and bath were added to the studio in 2006, also permitted. The studio (not including garage) is about 350 square feet. The studio has never been rented out my the current owners and there is no other rental history for the studio. They mainly used it as an office and guest house.
The property is zoned as a single-family home (LAR1). However, the “use code” and “county use code” are listed as “duplex.” The “County use description” is “Duplex-0200.” There is not a separate address and the utilities are not separated.
My bank does not do lending on multi-family properties or duplexes unless the units are attached. This is a bummer because my lender gave me a great rate of 3%. I can go with another lender, but I’d have to accept a higher rate. The other lender that I spoke with will finance a detached duplex, but won’t give me “credit” for the potential rental income from the studio. They also require 15% down, which is fine for me.
My questions are: 1) How do I know that a property is a duplex or not? What are the deciding factors? What documents should I ask for? 2) Are there additional financing requirements for duplexes? I seem to be getting different answers from everyone I speak to. Does it just vary per lender? 3) If the property is indeed a duplex, would I need to get another type of permit to be able to rent it out? Or, would I be able to start renting it out immediately? This would save me the time/ money to not have to get another permit (like an ADU permit)?
To clarify, I would live in the main house and only rent the studio attached to the garage. This is my first time buying a home.
Thank you in advance for the insight!