Question on Construction Permits!?

[Reinier Napoles]

Hello Guys!
Hope all is well.

Can anybody educate me on the permits required to Renovate Residential properties? 

One of the biggest risk working with private money and hard money comes down to the time needed to put the property back to good conditions. 

While penciling out deals, I would like to be more aware of how long a property could take to finish and factor that time into the term of my loans. 

I hope this message finds you all well. 

Blessings!

[Kevin Sobilo]

@Reinier Napoles, you are correct to identify time as a risk factor when using expensive financing or anytime where holding costs will be high!

However, I don't think permits and associated inspections are your biggest concern there. Those things are "known and controllable". You know what they cost, that you need to do to pass inspection, and municipalities will likely respond in a timely matter for the most part.

I think that the tradespeople you hire would be the #1 risk with regard to time. It is not uncommon for a trade not to be available when you want OR to tell you they will show up and then NOT show up!

For example, you give someone a down payment to start work well, they your money and you're work isn't going anywhere you are locked into them by signing a contract and laying out the down payment. So, if other money presents itself they may go chase that instead of starting your job on time! This sort of nonsense happens a LOT!

Given that one thing may depend on another such as rough work needing to be complete before finish work can begin that can throw everything off. So, learning how to vet, manage, and develop relationships with tradespeople is important.

I would say another serious risk factor is scope of work. Often either an issue comes up that you didn't anticipate OR you make decisions that change the scope of the work. Keep these things in mind when planning and making decisions because they can very easily extend your timeline.