"Pulling a permit" during rehabs

[Kristen Ray]

Hello BP flippers & Company,

Recently I was advised to hire contractors that can "pull a permit." What does that mean? Please share.

Kind Regards

[Jon Holdman]

Much of the work you might do during a fix and flip requires building permits, issued by the controlling locale's building department.   Usually city, sometimes county.  "Pulling the permit" is the process of applying for and getting a permit.  Usually this requires a licensed person to get the permit.  Exactly what license depends on the work being done.  For example, a licensed HAVC contractor could pull permits for replacing the furnace, but not for replacing the roof.  Doing a major remodel usually requires someone with a general contractors license, and then the use of licensed subcontractors for specific work like plumbing, electrical or HVAC.  Details vary widely.  The details tend to be more complex and onerous on the east coast than elsewhere.  Best approach is to contact the city, discuss what you're doing, and see if any permits are needed.  Paint, carpets, and the like usually don't require permits.  More significant changes do.

Its tempting to skip this.  Don't.  I did a loan once to a rehabber who got permits for some, but not all, of the work they were doing.  They got caught doing unpermitted work when having inspections for the permitted work.  Turned out the city in question had a program to try to catch unpermitted fix and flip work and they would have been caught even with no permits.  They ended up giving back the property deed-in-lieu because they were unable to fund the additional work the city demanded.  We ended up having to dig up parts of a finished basement, take down cabinets, and open up walls to allow the city to inspect things.  This deal ended up being a small loss to my partner and I, a few thousand.  A much bigger loss for the rehabber.