To permit or not to permit!

Rehabbing & House Flipping
6yFollow

To permit or not to permit!

Ray JhalaPro Member
Rental Property Investor · Saint Charles, MO · Member since 2017 · 28 posts · 8 votes

Hey Everyone! I purchased my first rental, a duplex, in January of this year.  After the tenants left last month I started the rehab process to bring the units up to speed and increase rents to market rates. 

The scope of work increased greatly after conducting demolition as there was lots and lots of mold causing us to take the first level (the property is a split level) to the studs. 

Due to some incorrectly installed windows/poor grade/foundation cracks the units have taken in some water which has rotted some of the framing(baseplates/studs).  We also found a few pieces of framing from previous termite damage that needs replaced.  

When I purchased the property the scope of work didn't include anything that would require permitting. However now that we have to replace some damaged framing (not a whole lot) I'm fairly certain we will be required to have permits.  Along with this I have now decided to put a pass through window in a load bearing wall to give the space a more open concept feel. 

I'm not entirely sure where to start however I have been warned by some others that the city inspectors tend to look for violations which can greatly increase the scope of work.  

Let me preface this by saying I first and foremost want to provide a clean and SAFE place for my future tenants to call home but I would like to educate myself in how to manage the process to ensure its cost effectiveness.


Thanks to anyone that has some advice for a new investor such as myself. 

0Reply
146 views

Most Popular Reply

Evan Polaski
Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
6y

@Ray Jhala 100% get permits. 
A) buyers are getting more sophisticated so when you sell a rehabbed property, a lot of buyers are asking to see closed out permits. 
B) you are renting, so having a property that has been inspected and passed permits can help protect you if anything every happens.
C) the amount of work you are doing sounds like it will cause attention.  All it takes is an inspector driving down the street for some other reason and seeing some white vans out front to stop your job, make you redo work, and hit you with penalties (this happened to a friend a couple years ago).
D)to be honest, there was probably work in your original scope that required a permit anyways.  In Cincinnati, you are technically supposed to pull a permit to change out a faucet or light fixture.  It is pretty absurd how little you can do without a permit.  

7Reply
See this reply in the discussion

37 Replies

Jump to latestLatest
  • Evan Polaski
    Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
    6y

    @Ray Jhala 100% get permits. 
    A) buyers are getting more sophisticated so when you sell a rehabbed property, a lot of buyers are asking to see closed out permits. 
    B) you are renting, so having a property that has been inspected and passed permits can help protect you if anything every happens.
    C) the amount of work you are doing sounds like it will cause attention.  All it takes is an inspector driving down the street for some other reason and seeing some white vans out front to stop your job, make you redo work, and hit you with penalties (this happened to a friend a couple years ago).
    D)to be honest, there was probably work in your original scope that required a permit anyways.  In Cincinnati, you are technically supposed to pull a permit to change out a faucet or light fixture.  It is pretty absurd how little you can do without a permit.  

    7Reply
  • Ray JhalaPro Member
    OP
    Rental Property Investor · Saint Charles, MO · Member since 2017 · 28 posts · 8 votes
    6y

    @Evan Polaski Thanks Evan, I really appreciate the feedback. All great points.  One thing I figured was the permit process and inspections will at least give me valuable education on building code and how to do things the right way even if does cost a pretty penny.  Wow! permits to change a faucet/light fixture thats crazy.  Luckily my county is a little bit more lax than that haha. 

    0Reply
  • Martin L Anderson
    Rental Property Investor · Lakeland, FL · Member since 2019 · 18 posts · 2 votes
    6y

    I agree with Evan, get permit find out what the requirement are maybe you only need a plan that you can do yourself or you may need an Engineer or Architect to draw the plans for you.

    1Reply
  • Evan Polaski
    Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
    6y

    @Ray Jhala, at least in Cincinnati, permits are not the nightmare people seem to think.  Yes they cost money.  My $100k rehab cost about $1,500 in permits.  But, I have never been given a big forced fix list, and overall all the inspections were next day, so only added maybe 5 days to a 4 month project.

    2Reply
  • Ray JhalaPro Member
    OP
    Rental Property Investor · Saint Charles, MO · Member since 2017 · 28 posts · 8 votes
    6y

    @Martin L Anderson Thanks for the feedback Martin. I appreciate it.

    0Reply
  • Ray JhalaPro Member
    OP
    Rental Property Investor · Saint Charles, MO · Member since 2017 · 28 posts · 8 votes
    6y

    @Evan Polaski Gotcha, good to know, a lot of talk around permits is always doom and gloom.  Permits it is! Thanks alot Evan.  Thanks for taking the time to offer me some advice, I really appreciate it. 

    0Reply
  • Sebastian MarroquinPro Member
    Real Estate Agent · Pasadena, CA · Member since 2015 · 476 posts · 263 votes
    6y

    hello. Sorry this happened to you. Now its time for a plan right :) and keep going. 

    * I think a lot of people on here (from an ethical and safety perspective) will tell you to get permits ahh and for a liability perspective also. 

    Now the question becomes: what is the strategy? 

    ** Assuming that you will get permits: 

    1. Get a Drafter you can trust: if you are very new at this: get an architect (bc they will have a license and insurance). 

    * A drafter will be cheaper (any investor in your town or realtor that does flips or construction will know one): also a recommended contractor or even the city- building and safety workers, as they deal with them 24/7. 

    This is your first order of business: if you want want to open up the window in a load bearing wall or any structural changes (bc of the framing). 

    The city and any inspector will require this if you are doing that: you can call the city BandS dept : give them an address 4 doors down - say that you want to buy the home and thinking about putting in a window : "do I need structural plans for it and calculations?" 

    If you are not doing structural changes then this will be different (maybe). 

    Once you have a drafter/architect walk the property for you: and do the structural changes and calculations: 

    Now its all about timing (if you care about timing of course). 

    Our building and safety dept. takes a long time to permit these: weeks and even months. 

    So as a strategy: once you have the building plans: I would suggest you do the work (framing, rough electrical, plumbing) to code: take lots of pictures in the that process and once everything is done at that phase... then you go get the permits after the fact. The work is done... so they tend to go faster that way and you can schedule a combo inspection with the city inspector. 

    (as a worst case scenario: you initially start the rough work and a neighbor calls the city and catches you in the act. They will flag the property and will tell you to stop the work and get the permits. It will be the same timing anyway... 

    If you don't have to mess with the structural component : don't- its not worth it many times from a time-perspective. A simple window is not the biggest of deals any way... but removing a load bearing wall all toughener will be. 

    I would get a termite company to do an inspection now: this way you can fumigate or change out framing that is compromised while you are down to the studs. 

    If timing is not an issue at all. 

    Then just get the drafter, do the plans, go to city, and get the permits. 

    Contractor should be good at assessing foundation : if it it a big foundation problem, get a foundation specialist to assess: and give you guidance for scope of work, and still have contractor do the work. Less expensive. 

    Curious - the inspection didn't reveal any issues? Foundation, moisture? termite? etc 

    2Reply
  • Ray JhalaPro Member
    OP
    Rental Property Investor · Saint Charles, MO · Member since 2017 · 28 posts · 8 votes
    6y

    @Sebastian Marroquin Hey! Wow thanks for the detailed response. Lots of really good information.  I had a guy give me some similar advice but I was a bit confused about the "do the work first, then go get the permits" so thanks for bringing some clarity to that. So I've brought in several people to take a look at the foundation and there are no huge issues with foundation aside from some minor crack repair. No walls pushing in or signs of settling. (thank god). Most, if not all the cracks are at weak points (by windows or wall corners).  We never saw active termites and a foundation guy I brought in pointed out where a previous termite chemical treatment was likely done so I think the termites were an older problem. I will bring a termite company in to take a look nonetheless to ensure we are termite free.  The inspection I had done unfortunately did not reveal any of the several issues I've discovered since demo.  When we did the inspection there were tenants who were home and were pretty filthy and had belongings everywhere which made it a bit tricky for the inspector.  The moisture issues I wish had been caught on inspection but it surely wasn't. Luckily I still bought it at a decent price and this has been a huge education for me.  Even if I have to leave a chunk of cash in the property I'll consider it tuition and get going on the next.  

    1Reply
  • Sebastian MarroquinPro Member
    Real Estate Agent · Pasadena, CA · Member since 2015 · 476 posts · 263 votes
    6y

    Good attitude! 

    Let me know if you have any specific questions: 

    (you could probably go to a structural engineer that also can do the drafting : and that type of work should not exceed $2k to $3k ) for their work + a couple of hundred for city permits. 

    Make sure you have a good and cost effective + trustworthy contractor : would love to stay in touch (and see some before and after photos). 

    (FYI the reason why I get on the forums like this is bc it gives me good practice for my clients out here in LA :) and eventually 10 years from now I would like to just coach people doing this type of work). 

    Send me some before and after photos on PM if you can! Good luck 

    0Reply
  • Ray JhalaPro Member
    OP
    Rental Property Investor · Saint Charles, MO · Member since 2017 · 28 posts · 8 votes
    6y

    @Sebastian Marroquin I absolutely will.  Thanks a lot Sebastian! Seriously, that is extremely gracious of you and others like you to coach people like myself.  Others life experiences are invaluable to me and helps me keep pushing forward through tough decisions.  

    Will let you know how it shakes out. Thanks!

    1Reply
  • Ray JhalaPro Member
    OP
    Rental Property Investor · Saint Charles, MO · Member since 2017 · 28 posts · 8 votes
    6y

    @Sebastian Marroquin Oh and P.S I grew up in Southern California, I'm a bit jealous I don't live there anymore. (enjoy that sun)  I'm from Corona California originally. My father is a commercial broker there still. =]

    0Reply
  • Steve Morris
    Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes
    6y

    Welll, in OR, the std residential PSAs have a seller disclosure stating that any work done that needed permits was permitted.

    I don't blame people for not pulling permits since some inspectors are pure and simple a-holes if you don't kiss their a$$.  And they will look for anything that is not to code and may make you bring it up to code.

    I don't think what you're planning on is a major deal IF you're simply replace and repair.  However, start adding sqft and wiring and something goes sideways and the insurance figures it out, you may not get a payout.

    1Reply
  • Ray JhalaPro Member
    OP
    Rental Property Investor · Saint Charles, MO · Member since 2017 · 28 posts · 8 votes
    6y

    @Steve Morris Gotcha! Yeah we aren't adding any square feet, I think the most ambitious thing we're doing is putting a pass through window in a load-bearing wall and replacing some sections of damaged framing. All the electrical was in tact and in good shape so other than updating outlets to GFI where needed nothing crazy by way of electrical.  

    0Reply
  • Steve Morris
    Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes
    6y

    I'm not a lic/bonded contractor, but if someone knows what they're doing on the load-bearing wall I wouldn't worry too much.


    Good luck.

    Forgot, the other reason in OR we don't like permits is that tax-assessed value (TAV) (what the prop taxes are based on) can only go up 3% even if you sell the place for a bazillion.  The biggest exception if if you make "major" improvements and pulling a permit is a big tip-off to the oppressor state :)

    0Reply
  • Steve Morris
    Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes
    6y

    Meant 3% increase per year in TAV.

    Everyone in govt gripes about it here, but I'm quite a believer myself.

    0Reply
  • Eric James
    Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes
    6y

    Could you really take the place down to the studs and not be required to pull permits? That would be a pretty unusual city. It sounds like you'll be doing enough work that you'll get caught if you don't pull permits.

    1Reply
  • David Estrada
    Member since 2020 · 1 post · 3 votes
    6y

    @Eric James

    Always, always, always pull permits. Above all else, you will sleep better at night. Not pulling permits leaves the door wide open to many different issues that can go wrong. Lender may require proof of permits and certificate of occupancy if you ever decide to sell. Insurance companies may decline claims if they know work was done without a permit. Seller may be required to disclose on a sellers disclosure if work was done without permits. It doesn’t matter if you plan to flip or hold for the long term, it is always best to pull permits.

    I have always pulled permits and I have been able to use it as a selling point to buyers and tenants. Doing the right thing goes along way in building a solid reputation. Eventually, the price that others will pay to do business with you will increase because they know you will always do the right thing.

    City inspectors gladly go to my inspections because they know things will be in mint condition. It has taken some time, but is a pleasurable experience to work with the city in obtaining permits and passing inspections. I am treated better because they know I will not hide anything or cut corners.

    I have seen deals go south a couple days before closing when underwriters ask for a certificate of occupancy for a rehab. My first thought was ‘I told you so’.

    Pulling a permit is a small price to pay for peace of mind. If you are worried that it will affect your bottom line, then the numbers weren’t great to begin with. Pull the permit anyway.

    3Reply
  • John Teachout
    Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
    6y

    Depending on your municipality, at this point, I would probably go to the permit office and try to actually talk to the inspector. I'd explain the situation (started out minor and got worse as you dug in) and perhaps even ask them to come out to the property and give you some advice. Developing a relationship with the building/zoning office can be very beneficial. This action would show that you respect their role and experience and want to do the right thing. You've heard it's easier to get forgiveness than permission. That's not always the case and at this point, pursuing a permit(s) is the right way to go.

    4Reply
  • Ray JhalaPro Member
    OP
    Rental Property Investor · Saint Charles, MO · Member since 2017 · 28 posts · 8 votes
    6y

    @Eric James In all honesty, it wasn't the initial plan but once demo started I ended up making that decision without fully vetting out the proper steps I should have taken ahead of time. You're definitely right its very likely I needed to pull that permit. Thank you for the feedback. 

    1Reply
  • Ray JhalaPro Member
    OP
    Rental Property Investor · Saint Charles, MO · Member since 2017 · 28 posts · 8 votes
    6y

    @David Estrada David thanks for sharing your experience. You make many great points and I have to agree I think pulling the permits and doing it right is the right way to go. I will go to the permit office and have some conversations! Thanks alot!

    0Reply
  • Ray JhalaPro Member
    OP
    Rental Property Investor · Saint Charles, MO · Member since 2017 · 28 posts · 8 votes
    6y

    @John Teachout Hey John, that is an excellent idea. I hadn't thought about that. I will visit the office tomorrow and do just that.  Thank you very much for the great advice. 

    0Reply
  • Account Closed
    Contractor · San Diego, CA · Member since 2018 · 432 posts · 221 votes
    6y

    @Ray Jhala unless you want to open up a can I would never lean toward permitting on such a small endeavor. The window you mentioned sounds like it’s interior. If it was exterior that would be different. If you just want to open 36-48” or so, all you need is an appropriate header (4x6 most likely). This is easy stuff to an experienced home remodeler or flipper. Those who don’t understand the business and construction side of things will always say permits and safe sounding approaches to construction because it’s all scary stuff, but those who have done this for years do not pull unless they really need to. Seriously, if you’re doing tons of construction or flipping lots of homes, you WILL be encountering plenty of things not built to code. That’s when you learn you either tear your house down and be compliant or you put a stud in, drywall and move on to the next thing.

    1Reply
  • Marian Smith
    Real Estate Investor · Williamson County, TX · Member since 2011 · 1k+ posts · 961 votes
    6y

    @Ray Jhala From going to a real estate investors meet up I got the impression that no one here pulls permits on rehabs, just add-ons. I used to live in an etj and we did not have to permit anything. Not saying don't, but if you are repairing damage and want to permit after the fact you better be sure you don't have to remove stuff, like drywall to show the correct r value insulation was installed, they want r15 in walls here. I think you have to foam outlet boxes too. We replaced the electrical outlets in a house when painting trim and realized afterwards code requires tamper resistant outlets now...never even knew they existed and got standard ones. So you may want to verify what code is before you call the permit guys out...or button up and paint all your repair work before having them come out for the pass through...if permitting that makes you more comfortable.

    1Reply
  • Jonathan R McLaughlin
    Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes
    6y

    @Ray Jhala I’m not even sure what the question is here?

    Yes you should get a permit, especially if you want to sell this place at some point. Inspectors will “look for violations” by having you tear out Sheetrock etc. why wouldn’t you do it.

    0Reply
  • Jonathan R McLaughlin
    Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes
    6y

    @Jonathan Greer and many of those who have done it for years do it the wrong way.

    Long term liability is a thing and insurance issues are a thing. Jurisdiction specific, sure, but the risk is there.

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free