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Rehabbing & House Flipping

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Bryan S.
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Bought Home in Largo FL with unpermitted garage conversion HELP!

Bryan S.
Posted Dec 13 2022, 08:10

Hello world!

So as you guessed from the title - I bought Home in Largo FL with an unpermitted garage conversion. I did the permit runs / checks to assure there was no open permits, but as learning the hard way they did not submit any applications, thus none were open.  

Has anyone dealt with this before / any advise? 

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Greg Scott
Pro Member
#3 Tax, SDIRAs & Cost Segregation Contributor
  • Rental Property Investor
  • SE Michigan
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Greg Scott
Pro Member
#3 Tax, SDIRAs & Cost Segregation Contributor
  • Rental Property Investor
  • SE Michigan
Replied Dec 13 2022, 08:17

I had the same issue, but in Texas.

We had to submit "drawings" for the conversion (hand drawn assumptions), pay the permit, and have it inspected.  Fortunately, it didn't violate any building codes, so they passed it.

You may want to hire a general contractor to come look at it before contacting the city.  If the contractor has done a lot of work for the city they can be your advocate for getting the conversion permitted.

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Janel Kolbo
  • Rental Property Investor
  • Tampa, FL
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Janel Kolbo
  • Rental Property Investor
  • Tampa, FL
Replied Dec 13 2022, 08:20

Lesson learned, you should always search permit history - or your agent can, I would have done it for you had I seen the conversion. Now, I don't think it's the end of the world. The BRRRR I'm working on (which I'm now keeping) was also unpermitted and I knew it, so we're working on getting everything above board during the reno to widen our buyer pool for the future.

What is your goal with the property? Are you trying to flip it and want to use the space as an ADU feature? Or, do you just want to be able to rent it out?

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Bryan S.
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Bryan S.
Replied Dec 13 2022, 08:27

thank you both for the quick replies!

I have a family friend that is GC but he is super busy so he won't be able to come for a while, but the goal is to eventually rent it out. I would like to ge this all sorted out sooner than later so may look to pay someone with more bandwidth.

I was in the process of getting the property inspected was when the township raised the red flag. 

@Greg Scott - did you do the drawings yourself or did you hire someone to do so?

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Josh Green
Property Manager
Agent
  • Realtor
  • Tampa/St Pete/Clearwater, FL
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Josh Green
Property Manager
Agent
  • Realtor
  • Tampa/St Pete/Clearwater, FL
Replied Dec 13 2022, 08:57

@Bryan Senk

Question - assuming this was purchased conventionally - did the appraise mention or count the garage space on the appraisal report as heated sqft?

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Bryan S.
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Bryan S.
Replied Dec 13 2022, 09:05

@Josh Green - great question. Yes - purchased conventionally. No one caught it. I explicitly asked is there any permitting issues should I be aware of. Also had two different runs of permits by the real estate brokerage and inspection company and both said no issues/no open permits. 

Inspection company / appraiser / listing agent / seller / my agent (buyers agent) all didn't catch it. I spoke with my buddy who has a brokerage in NJ and in NJ the township wouldn't have let the sell go through with a scenario like this. But in FL apparently the township isn't as hands on until they notice it after the fact

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Joshuam R.
  • Specialist
  • Florida
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Joshuam R.
  • Specialist
  • Florida
Replied Dec 13 2022, 09:07

Any modifications beyond what is recorded in the county unfortunately falls on us the future owners who purchase the property. 

Options in your current position is, if you were considering renting out the ADU , sure go ahead and do....until someone gets Code Enforcement on you then you deal with that headache at that moment. Cash in until then. For the ones feeling little devilish.

Second option is, get drawings and apply for permit, skip the GC, the Code Enforcement will help you tag you on what needs to be required. (Even with GC, Code enforcement will find things after the fact, so wait before you fix or update) I go with this option because our properties represent us, it is our products, our brand. Also, our number one service is comfort and safety to our dear future tenants, and our peace of mind.

Third option is, just don't rent it, keeps the code enforcement away, and great lesson learned.

Best wishes.

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Josh Green
Property Manager
Agent
  • Realtor
  • Tampa/St Pete/Clearwater, FL
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Josh Green
Property Manager
Agent
  • Realtor
  • Tampa/St Pete/Clearwater, FL
Replied Dec 13 2022, 09:18

@Bryan Senk

Okay well if I'm understanding correctly and the appraiser did not count the completed garage as heated sqft then you really got the deal won here. Because all you need to do is get the permit and you'll raise the value of the home significantly by getting that added as heated sqft. It's like sweat equity without the sweat.

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Caroline Gerardo
  • Lender
  • Laguna Niguel, CA
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Caroline Gerardo
  • Lender
  • Laguna Niguel, CA
Replied Dec 13 2022, 09:20

Do all the houses on the block have a garage to park a car or all have bootleg units? Appearance from the curb would have addressed the issue. Seller knew, listing agent knew. No open permits was wrong question. What does "township or county" show as legal square footage?? - that reveals the problem. If advertised as 1600 feet which includes the 150+ of garage then the seller lied.

I'm assuming the conversion appears to code, is insulated and electrical looks professional. 

You need a contractor who knows the planning desk guy's children's names. One who has done this 200 times. Contractor looks at electric panel, wiring in conversion, parking available in driveway, workmanship and can tell you what is needed to meet code. You pull permits with a site plan and architectural drawing (ask appraiser to use their drawing and add the details), fix it, then get the job card signed off. If in a dense block you might have to go through a public hearing about parking and density and whatever the neighbors want to complain about. Depends on location. Worst case the planning department makes you rip it out. You mention the "township" caught it so I assume you got a letter or red tag- DO NOT allow this to linger. 

I would be writing to listing agent about wanting money for their "mistake." cc the broker and the seller

here are forms do not call until you have a contractor in Largo look at the property https://www.largo.com/connect/...

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Bryan S.
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Bryan S.
Replied Dec 13 2022, 13:26

@Caroline Gerardo - thanks for the details!

All units on the street have a garage. As I'm learning the area deeper, Florida is a checkboard with pretty much everything. One block over is Multi-million mansions. The other side is trailers. In one section there is a $3MM house adjacent to a $200k trailer, there's Florida for ya. 

I was getting the property inspected for something else when this was flagged. The code enforcement officer sounded very reasonable and friendly, but obviously wants to get an engineer to sign off on the work.  I called a ton of GC's and architectural firms today and a few will come out tomorrow to take a look. Hopefully one of them has experience this exact scenario before with success [I mainly spoke with admin].

Thank you all for the advice!