Anyone know how to deal with unpermitted additions?

[Corey Davis]

My wonderful agent dug up an off market SFR in Portland OR that's listed at about 20k less than it's comps in the area(short sale). That's if you're using the tax recorded number of rooms, baths, and square footage.

Turns out this little 700 square foot 2/1 has a converted garage with its own full bath and kitchen. So now it's a 1000 sqft 3/2, or a duplex. The problem is not all of the permits were pulled before the work was finished.

So, I can get the property for 100k. As a 2/1 700 sqft it's going to sell for about 130k. As a 3/2 1000sqft it's going to sell for about 170-180k. Those are current market values both my agent and I have worked out. The house sits on a corner lot in a neighborhood projected 13% increase in value this year. I REALLY want to flip this house. But...

I don't have any experience getting permits for work that's already done. If all permits were in order I'd be looking at about 15k total for rehab. All of the work is 90% done.

What's my first step on this? Or am I walking into a flaming pile of burning disappointment?

I was handed the deal 4 hours ago. I haven't had the chance to speak with the city yet, or a contractor. It's after business hours and now I can't sleep.