Question on a Deal possibility

3 Replies

Hey what’s up fam I’m new to the forum and I have a question about a possible wholesale deal. I’m in west palm beach FL and I have a home owner who’s looking to sell her home and I’m sure this is a good opportunity for me. The home has deferred maintenance and the only real issue is that the home owner’s late husband built an efficiency in the back of the home without pulling any permits. The Arv is in the low 200k plus a conservative 20k In repairs. She owes 93k on the mortgage. My question is how does the unpermitted construction play a part in the type of offer I should give her? Any input on this would be greatly appreciated.. Thanks.

From what I understand, there can be a potential ongoing liability for work that was done without the permits being pulled. (I only learned this at a REIA meeting a few nights ago.) So it's in the current owners best interests to have this done.

In order to provide the best experience to the owner, I would make an offer that's assuming there's no work to be done on that efficiency.  I would, as always, make sure there was an inspection contingency in your offer so that you can pull out or renegotiate if something is uncovered.  Then I would arrange to have the county inspect the property.  If it turns out that work needs to be done, you can then take whatever action you like - pull out, or renegotiate if you need to.

If it's unpermitted the county may fine you or you can simply demo it. I would underwrite the deal as if you had to demo it ($3-5k) but could be slightly more if you need to do asbestos remediation.