Un-permitted editions ?

Question

Looking at a FSBO triplex. The 3rd unit is a studio 1/1. This is a potential BRRRR play for me. I'm fairly certain the 3rd unit was not permitted as HCAD only list as a duplex. Id be rehabbing the entire property getting everything up to code. Anyone have any experience with this situation?

What risks will I have with the lack of permitted edition when I permit the rehab?

Will HCAD re-classify as a triplex?

Can they make me tear it down?

Will i run into issues on the refi if list as 1750 duplex by HCAD when its really a 2100 triplex?

Any and all advice appreciated.

Ryan Johnson · Answer

I plan on having to put a new roof and address the foundation already. I’ll have to bring the entire place up to code. New electrical throughout. Individual Meters likely.

I talked to city permitting and it’s def not permitted but if inspector says it’s safe and eveything is brought to code they said it will be ok.

I will have an inspector Inspect the property as well as multiple contractors.

Yes I need the 3rd unit to make the numbers work.

Dave Chapa · Answer

@Ryan Johnson

"Id be rehabbing the entire property getting everything up to code." This is where it can bite you. If the plumbing, electrical, structure, foundation,  etc.. are not up to code, then what will it cost to bring it up to code? I would have a licensed contractor look at it beforehand.

"What risks will I have with the lack of permitted edition when I permit the rehab?" You will have to bring it up to code unless it's grandfathered. However, the 3rd unit doesn't even count unless a permit was pulled for the addition.

"Will HCAD re-classify as a triplex?" Yes, once they find out when they audit the area.

"Can they make me tear it down?" The City of Huston can. Have a licensed contractor (with the City of Houston) look at the property. You could also call the Houston City permitting and ask general questions.

"Will i run into issues on the refi if list as 1750 duplex by HCAD when it’s really a 2100 triplex?" I would ask your loan company. They will request a new survey and appraisal.

In my opinion you are buying a duplex with a questionable addition. I would verify some of the hard questions before buying, especially if your numbers are dependent on the 3rd unit.

Shahriar Khan · Answer

@Ryan Johnson i would strongly suggest that you can that try to sort out the code issue upfront . You can try 2 ways

A) Going to city permitting department and ask mention that to them and let them tell you what to do. Understand that not asking the right questions or using terminology may get your wrong answer .

B) Go to Houston Plan and Permits and ask them to do it. They would tell you right way if this can be fixable and cost of doing so.

Keep us posted.