First BRRRR - No Permits Pulled on Previous Electrical Work

[Joe Livsey]

Hi everyone! I am getting started building a portfolio of single and small multi family apartments using the BRRRR strategy.

I found an older (late 1800s) duplex in the Buffalo, NY area that was significantly rehabbed, then the owner elected not to finish the rehab and sell it to someone else to finish. Upon looking through all the work done it was clear the house was fully re-wired since all the outlets were updated from an old school 2 prong to a grounded outlet and recessed lighting was installed. All the drywall has been put up and the outlets are finished BUT I am finding out that there were no permits pulled for any of the electrical work (there was a permit pulled for the roof replacement).  I understand this poses a significant safety risk and will likely come back to haunt us if we were to try and sell the property at some point in the future. The property inspector (who has been real estate investing since the 1980s) said the electrical work he could see looked very professional but there's no way to verify behind the walls. 

Does anyone have any creative ways to get over this hurdle? Is it possible to get this work inspected with the city even though a proper permit was never obtained? I don't want to walk away from this deal since the numbers are good and I believe I will be able to pull 100% of my capital invested out to find another property.

House Details and my Numbers (also open to comments):

• House Type: Duplex.... 2bed/1bath lower unit, 3bed/1bath upper unit
• Purchase Price: $60,000 all cash
• Estimated Rehab Left: $40,000
• ARV: $140,000
• Rents: $800 lower / $1000 upper
• Expenses and Debt Service: $1335
• Monthly Cash Flow: $465

Thanks in advance for any and all comments and advice!