Skip to content
×
Pro Members Get
Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
ANNUAL Save 16%
$32.50 /mo
$390 billed annualy
MONTHLY
$39 /mo
billed monthly
7 day free trial. Cancel anytime
General Real Estate Investing
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated 7 months ago on . Most recent reply

User Stats

30
Posts
5
Votes
Gio Kattan
5
Votes |
30
Posts

How to perform rehab w/o permits on a sub-to deal: will I pass city inspection?

Gio Kattan
Posted

Hello Community!

I’d appreciate some guidance on a few matters regarding my investment properties.

I recently purchased several properties in the following locations:

• Ft. Lauderdale, FL

• North Palm Beach, FL

• Plantation, FL

• Pompano Beach, FL

These acquisitions were done creatively, assuming the existing loans via subject-to deals without inspections. As a result, I’m uncertain if any of the properties have illegal additions or modifications. For instance, one property seems to have an extra bathroom that is not listed in the county records.

I plan to make some modifications, including removing a closet wall to expand a bathroom and taking out a kitchen island that contains electrical outlets and a switch. Additionally, I’m considering converting a garage into a bedroom.

If I want to list these properties on Airbnb, I understand I’ll need to obtain the following:

BTR (Business Tax Receipt)

CU (Certificate of Use)

For these, I’ll need to undergo a city inspection. My concern is whether the city could deny permits for these modifications, such as removing walls or converting a garage, or if they are mainly just concerned with safety and habitability. For instance, will I have to undo the bathroom that was already created?

I’d be very grateful for any advice or recommendations on how best to approach these modifications.

Also if I were to refinance in the future to pull out cash from the property, is this something that banks could refuse to lend on if I have code violations of lets say a wall that was moved or removed?

Thank you for your time and assistance!

Best regards,

Gio K

Most Popular Reply

User Stats

6,675
Posts
7,650
Votes
Jonathan Greene
#1 Real Estate Agent Contributor
  • Real Estate Consultant
  • Mendham, NJ
7,650
Votes |
6,675
Posts
Jonathan Greene
#1 Real Estate Agent Contributor
  • Real Estate Consultant
  • Mendham, NJ
Replied

No one else is going to want to tell you this, but it looks from the post like you bit off more than you can chew. Getting four creative deals locked down is awesome, but it seems you don't really know what's going to happen next. The potential for a loan call is higher and higher with sub to the more parties you involve if that makes sense.

Trying to take down four homes sub to and then do remodels to them all, and then list them on short-term rental sites, and get full permitting and ok for not just the STR, but for your renovations and all prior renovations maybe done without a permit, while on subto, sounds like a pretty big mess to me.

I would consult with a sub to specialist and prepare for the potential of having all the loans called at some point.

business profile image
Zen and the Art of Real Estate Investing
5.0 stars
9 Reviews

Loading replies...