Unpermitted work, clearing title, and obtaining permits for rehab

[Vince Sanchez]

Hey BP!

I'm interested in rehabbing a 3 flat in Chicago that's already been gutted to the studs and reroofed. My contractor and I took a look and saw great potential. They also did a great job on the new roof, according to my contractor. When I searched the city's site for permits and violations, I did not find any permits for all the work that was done (demo and new roof). At this point I'm worried about clearing title and obtaining a mortgage if I went under contract. My agent then pointed out they may not have needed a permit and cited info from the link below.

https://www.chicago.gov/city/e...

Has anyone dealt with anything like this in Chicago before? 

And if I do end up clearing title and obtain a mortgage for this project, I will definitely need to obtain permits for a lot of the rehab. Is it worth going through the permitting process if I don't have an Expediter from the city?

[Tom Shallcross]

As @John Warren stated, a lender likely won't care about the previous owner not pulling permits and this should not effect title unless there were open violations. And since you're using private money, no issue there. 

If you have plans and permits showing the existing condition and the proposed new condition, you should be fine. We have taken over several projects midstream that had violations and/or stop work orders, so taking over something that's been demo'd and is clean on violations doesn't make me flinch. 

For city of Chicago permits, don't worry about an expeditor but get an architect that is self-certified to help push the process along. We use @Samuel Pavlovcik for all our projects. @Prashanth Mahakali is another investor-friendly architect that others use to give you options. 

Lastly, validate all your holding costs and rehab costs and then add a buffer as this sounds like your first rehab and your agent doesn't specialize in these types of projects. Forecasting the rehab and what it will actually take to get the project across the finish line is a much bigger variable than the existing roof not having a permit.