I recently answered some questions for an investor who is looking at buying a property with an illegal(non conforming) suite.
Basically, these types of properties offer higher Cashflow and they can be purchased for similar prices as normal single family homes. Risks include, if caught, big renovation cost to make legal, or ripping out the suite and losing Cashflow.
Solutions if caught include: have a bigger than normal reserve fund, rent as whole house for less Cashflow, make applications to city and complete proper renovations, sell property traditionally, rip out kitchen and rent to students by the room to replace Cashflow , sell as rent-to-own.
To read my full reply, check out this link!
Until next time,