Flipping a home with unpermitted work

[DaMare-A Smith]

I've recently come across a couple of homes that have unpermitted work and are priced below market value and it seems it is pretty common in the area for homes to have unpermitted it. What are the concerns of buying a property with unpermitted work? Would it be worth trying to rehab and flip? 

[Steve K.]

@Damarea Smith you can possibly go back and permit the project(s) retroactively, however the inspector may require opening up walls or undoing a certain amount of work so it can be inspected. If the work was all done perfectly to code it will just be a matter of pulling the permits and passing inspection, whereas if it wasn’t done to code then it may need to be completely redone, so it depends on the quality of work and how closely building codes were adhered to. Another option is to simply disclose during the sale that there is unpermitted work on the property. As you’re experiencing now it will effect the sale in that it may turn some buyers away, while others may not care. If you’re looking to make it as clean a transaction as possible and maximize your resale value, it’s probably best to address the unpermitted work before selling. It’s pretty common to see unpermitted work and usually it’s a judgement call on behalf of the buyer. Replacing windows without a permit is one thing, whereas building a large structural feature like a deck or adding square footage or a bedroom or something is a bigger issue.