Permitting - Thinking about buying unpermitted houses
Hi BP,
I'm new to the bigger pockets forums. I found a lender sale with 4 single family homes and 1 duplex. Just did the walk-thru and the homes are about 90% complete. After the walk-thru, I found out that all the single family homes were built unpermitted. The unpermitted houses are above ground and has an attic so easy access to check wiring and plumbing.
Does anyone have experience with getting the permits and home inspection after the fact? How much it would cost? What steps do I need to take?
Any advice would be greatly appreciated. Thank you.
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@Troy Takamoto
I would absolutely speak to local authorities as we looked at one in my area and it would have been easier to knock down and start over.
Remember it’s more than just electrical and plumbing - foundation compaction, concrete strength, framing etc.
I would not touch them
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#3 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
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Make sure they're not red tagged. Get a city inspector to walk the property and tell you what the repairs to bring up to code entail
@Troy Takamoto - Sorry, just saw this post. After the fact permits are doable, however, getting a GC to certify the work and getting the after the fact permit through DPP is a nightmare. I'm on Oahu, please PM me if you still need assistance. Mahalo! Joel
Are we talking about unpermitted remodels? The wording of your post almost makes it sound like these are somehow unpermitted new construction homes.
If remodels - I'd consider buying them if they can be bought WAY under market value. But proceed with caution.
If new builds - I'd walk away and never look back.
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#3 All Forums Contributor
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As a longtime GC I would stay away unless you are a seasoned professional. I have dealt with Cities/Counties many times and depending on the municipality and the particular building department, you have the distinct possibility of never getting a permit for some units.
I had an inspector ask me to prove that the rebar in the slab was up to current code. How do you do that? You can X-ray it, but they still want to see it so out comes the jackhammer, and there goes your profit.
Another issue could be electrical. I've had inspectors ask me to show every ground attachment and the non-interrupted path. That means removing ALL the drywall in the house. All of it.
So bottom line is definitely get the local inspector to say in writing that they will retro the permits. Most will not. And they will not usually just come out to the property as a courtesy, you need an open permit before they will waste their time on you.
But go see the city, they may surprise you....
Even for an experienced contractor, it would be wild speculation even attempting to figure out a purchase price unless they are willing to go land value minus demo costs. The dwelling improvements (in my part of the world) don’t get to be called or classified “improvements” without a certificate of occupancy. It’s basically junk piled on land. The seller of course doesn’t see it that way. BEST case scenario, you only lose enough drywall so 100% of framing and connections are visible from one side at least for frame and mechanical inspections. If roofed, maybe lets you just tear a square off for deck inspection. Foundations will kill most of these, you need EXTREMELY forgiving municipal inspectors as it’s sealed concrete. MAYBE, a couple cross section cuts with excavation depth, some sort of X-ray supporting evidence, and I bet they still cover their butt wanting an underpinning design of sorts guaranteeing what they cannot see. I don’t know if there is some science test for concrete PSI after cured, there is a standard there as well, seldom asked for the ticket, but they could want that.
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#3 All Forums Contributor
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Quote from @Joel Forsythe:
Foundations will kill most of these, you need EXTREMELY forgiving municipal inspectors as it’s sealed concrete. MAYBE, a couple cross section cuts with excavation depth, some sort of X-ray supporting evidence, and I bet they still cover their butt wanting an underpinning design of sorts guaranteeing what they cannot see.
Yep. Even if you get a very nice inspector who is having a great day, he will always CHA. In the end, you will probably be asked to provide an Engineer's written analysis.I even had an engineer friend and he said no. Actually he said "are you F'ing kidding me?"
Quote from @Troy Takamoto:
Hi BP,
I'm new to the bigger pockets forums. I found a lender sale with 4 single family homes and 1 duplex. Just did the walk-thru and the homes are about 90% complete. After the walk-thru, I found out that all the single family homes were built unpermitted. The unpermitted houses are above ground and has an attic so easy access to check wiring and plumbing.
Does anyone have experience with getting the permits and home inspection after the fact? How much it would cost? What steps do I need to take?
Any advice would be greatly appreciated. Thank you.
In the governments eyes that home does not exist if there is no permit. I would advise you to get as much as info as you can before you dig a very deep hole.