Hey guys, looking for whatever advice you can provide. I'm in Travis County, NW of Austin. I have a flip I'm about to close on with amazing views and good numbers once renovated. The house has an appraised sq footage of around 3000, but is only 1700 on the tax records. The old owner expanded without permits. I'm planning on pulling them - any advice on how to stay good with the county since it is kind of after-the-fact. Thanks!
That's not really an answer to your question. But why you'd want to pull permits, unless you absolutely have to? You can remodel without permits and disclose accordingly on the Seller Disclosure. I suggest over- disclosures in this case to avoid future liability. Since you're a licensee I'm sure you know what I mean.
It's a very personal decision for each investor, as well as for each project. I've gone from no permits on a $250K remodeling project to full permits on others, and back to no permits. If you do pull permits you're looking at substantial delays and hussles with plans reivew/approvals, inspections, significant city fees.
Don't forget to figure in extra engineering, plubming and electrical cost increases as your plumber, electrician and contractors will pad their bills to cover the extra costs and time they'll have to expand on compliance.
While pulling permits at least in theory increases the desirability of the property, current demand for properties in good condition in a hot area is such that you likely won't see major difference in the resale price, as long as you do your remodeling job right.
Unfortunately I have experience with this. The people in residential planning and development at the City of Austin are actually quite helpful. It depends on the history of the property - if the owner had pulled permits and let it expire, then there's a possibility the city may just let you reactivate the permits. If there was no permits or you can't reactivate the old permit, then you'll have to submit the permit as if the project is starting from scratch. Like Alex G stated, this would require a lot of extra work: floor plans, structural drawings, demolition application(which requires tax certificate), water service plan verification, and energy service verification. This is for a residential addition application, which you can find here. None of this is really too complicated, mainly it's the floor plans and structural drawings that can take money + time since most architects/structural engineers are backed up with work right now.
You could go with the no permit route, in which case you should be careful that the remodeling is not too noticeable from the street. You could get caught by Austin Code or reported to Austin Code by a neighbor in which case you will be forced to pull a permit or pay fines. The violation will explicitly state that you will not be able to sell the property without giving notice of the violation to the buyer. The violation is also recorded in the public property permit history. If you do go with the no permit route, definitely over-disclose. I found all this out the hard way.
Sorry, I just realized my references to city of Austin may not apply if you're in Travis County outside of the City.
I wonder if @Danny Webber could chime in. He strategically has been doing rehabs in the county outside city's jurisdiction to avoid dealing with city of Austin development office.
IF you're in the city of Austin I believe @Tim Wang 's comments are on the money. You'll have to submit remodeling application for an addition with plans as if you're doing a brand new 1,300sf addition. There is the costs, delays and managing the complexity of the process that Tim described.
However, there is also a considerable risk in this endeavor. You could be required to tear off at least parts of drywall to prove that the electrical, mechanical, plubming, structural, insulation, siding, etc -- are all done to code.
What if the city determines your slab for the addition was poured incorrectly? Where do you go from there?
If you're already planning to redo most of that work, your costs may not rise dramatically. But if you're just looking to spruce up the property, pulling permits WILL increase your costs significantly and will expose you to the above risks. And if you're caught doing the work without permits you'll likely be required to do most or all of that work anyway.
One thing I'd look into is why your "appraised footage" is already showing 3,000sf. Usually the size of improvemens is not updated on the county tax rolls unless and until someone pulls the permits for an addition and completes the work. That's how the city & county know there is extra living space on the property.
@Alex G. Hey Alex, I have a property in N. Austin with an addition that was framed incorrectly so the ceiling has a sag where new meets old. You know of a framer or someone I could hire to tell me how to fix it? It was added on in the 60's so its not going to fall down, I just want to fix the sag without adding a pillar. Thanks.