Updated about 2 months ago on . Most recent reply
To pull permits or not on a rehab project
If you’re doing a fix and flip, skipping permits to “save money” can be one of the most expensive mistakes you make.
Someone I know bought a flip from a wholesaler without really understanding the comps or the true scope of work. They went through the whole renovation, all the way to turning the power on.
That’s when everything fell apart. Because the work was done without properly permitted work, they were required to tear down all the drywall, redo the electrical and framing, and get engineer reports to bring everything up to code. The holding costs and rework destroyed the deal for a sale. On top of that, they pulled the permits in their personal name, and in that county you can’t sell for 12 months after that. Now they’re stuck refinancing because they can’t list the property on the MLS as planned. Holding property now aligns with their plans but that wasn't the initial strategy. This isn’t a one-off story. I’ve seen multiple investors regret not pulling permits or not using licensed trades on fix and flip projects. If your renovation budget “works” only by skipping permits or cutting corners on electrical, plumbing, or structural work, it’s not a real deal. If your main exit strategy is to sell on the retail market, remember: • Buyers, inspectors, and appraisers will look for permitted work. • As agents, we have to disclose what was done. • You may end up forced into a refinance and long hold instead of a clean flip. Run your numbers assuming you will: • Pull all required permits. • Use licensed trades for major systems. • Hold longer if something gets flagged by the city or county. If the deal still works with proper permitting and licensed contractors, you’ve got a much safer fix and flip. If it only works by ignoring permits, walk away
That’s when everything fell apart. Because the work was done without properly permitted work, they were required to tear down all the drywall, redo the electrical and framing, and get engineer reports to bring everything up to code. The holding costs and rework destroyed the deal for a sale. On top of that, they pulled the permits in their personal name, and in that county you can’t sell for 12 months after that. Now they’re stuck refinancing because they can’t list the property on the MLS as planned. Holding property now aligns with their plans but that wasn't the initial strategy. This isn’t a one-off story. I’ve seen multiple investors regret not pulling permits or not using licensed trades on fix and flip projects. If your renovation budget “works” only by skipping permits or cutting corners on electrical, plumbing, or structural work, it’s not a real deal. If your main exit strategy is to sell on the retail market, remember: • Buyers, inspectors, and appraisers will look for permitted work. • As agents, we have to disclose what was done. • You may end up forced into a refinance and long hold instead of a clean flip. Run your numbers assuming you will: • Pull all required permits. • Use licensed trades for major systems. • Hold longer if something gets flagged by the city or county. If the deal still works with proper permitting and licensed contractors, you’ve got a much safer fix and flip. If it only works by ignoring permits, walk away