un-permitted addition on flip house

[Mike Cordova]

I recently got an offer accepted on a Fix and Flip project in Tempe AZ, on the border of Scottsdale.  When the Sellers Disclosures came through, it came to my attention that the addition was not permitted. Id love to hear from anyone that has experienced this and what you did and what the best way to proceed would be.  thanks in advance!

[Matt Lewis]

@Mike Cordova - Hey Mike, Congrats on the deal!

I’m a contractor in Seattle and I see this quite often. If it’s just a little shed they attached or a covered porch they enclosed it might have to be torn out at some point. It may be allowed but not considered legit living space.

If it’s a professionally built, to code and everything you may be able to have inspections done and pay for permitting retroactively. Most inspectors will want to peek behind the walls and you may have to pull all the drywall so they can see all the framing, plumbing, and electrical.

Definitely adjust your numbers on the deal ignoring that square footage and subtract any costs that may be associated with demo or corrections from the purchase price.

It might be worth just getting a preliminary inspection done by the city just to give you an idea of what it will take to get it approved. Try to have the same inspector come out for each inspection so you don’t get any differing opinions.

Good Luck!