All Forum Posts by: Christopher L.

Yeah, @John Barrows, I hear ya.

It brings up one of my questions again, though, that makes me uneasy. Why hasn't this guy simply red tagged me? If they tend to be drunk on their own power, why wouldn't he just shut me down without warning after seeing several violations on the outside? Is he a decent person giving me a chance or is he wanting me to show him the inside and crush me after doing so?

@Clint Shelley, thanks for telling me about your experience. That was something I have been very scared to do, is just open that place after the handies have just ravaged the place. I've got the impression that will just encourage the inspector to go to town and crush me. But at this point, there aren't a lot of options left. So, fingers crossed.

@John Logue, that advice is very appreciated. It's funny, I've had the "chalk it up to tuition" attitude for a while. But the more that loss climbs, the harder that pill is to swallow. Time was another factor causing me to try to get this wrapped up without permits, now that I'm 6 months deep into a 9 month hard money loan. But as you guys have pointed out, it has/will just cost me more time and money in the end. That was the positive feedback loop I got stuck in -- the more time and money lost on these shady handymen, the more I felt I had to keep avoiding the high priced (relative to the cheapo handythieves, anyway) GCs, which just kept costing me more time and money, trapping me in this mindset. Anyway, thanks again.

Hey @Wayne Brooks, thank you for the reply. Man, it would feel so good to be able to open that place up, say "Sorry. What's the damage?", take the loss and move on. But at this point, I literally can't afford to do it that way. I bought the place from a wholesaler with a little meat on the bone, but not much. I went into it thinking, "I just wanna get some experience in the industry before the market takes a dive." That was the popular comeback I kept hearing on the topic of "Should I invest in the market now, when many feel a correction is imminent?" The common reply from the experienced was that if you're new and wait to get into the market, you wont have the experience and connections to act effectively when the time is right. So, we took a deal (our first) that wasn't the best with the knowledge and acceptance that even if we lose a little, it would be a well paid for experience. We didn't expect or know we would take a loss, we just knew we could survive a small one, so it gave us piece of mind.

Here's what threw it off the rails: we got a friend-of-a-friend handyman who told us he would rehab the whole place for 8k! I'm talking down to the studs rebuild! That's amazing, I thought! We never intended or needed to do so much to the place, but how am I going to argue with such a bargain -- gonna make this place amazing! Then the guy decides not to finish the work and leaves us holding the bag. Obviously, no one on this Earth would do all that work for anywhere near that price. So, here we are, trying to patch the situation up as best we can.

I know it seems what I'm trying to do is slick, maybe it is, but it's also just survival at this point. To open it up and say "What do I owe, ya?" at this point would be irrelevant. I may as well skip that and move on to the next logical step of... well, actually I don't even know. What do you do when the cost to get the place into saleable condition has skyrocketed past affordability? You are right @Wayne Brooks, it wasn't a good deal, it was a meh deal that fell into disaster when I believed a person would do a full rehab for a ridiculous price. I did not know enough of the true costs involved in a lot of the work to know it was foolish. It's another on a long list of lessons I will never forget. I'm just trying to ensure there is a point to these lessons -- that we will get the opportunity to do it perfectly next time.

Appetizer (skip to the Meat and Potatoes, if you want to get to the point)

I’m requesting specific knowledge on the red tagging process, permits, and inspectors to try to save what was supposed to be a new family business. You guys are really getting thrown into the middle of this story (at least I hope it’s the middle -- not the end) without a lot of the background. I intended to post about my first experience -- taking the plunge on my first flip. But since I’ve had to become my own handyman to fix the deficiencies of handymen apparently less capable, knowledgeable, or honorable than myself, I’ve had little time to do anything else. This experience has opened my eyes to the previously unconsidered point of permits -- to ensure the work being done is held to a certain standard of quality. Okay, in general, that was considered before from the point of ensuring things are safe. I had never considered that without permits, certain handymen (I now know a few), would produce such low quality work necessitating the job be completely redone with no method of getting the money back from the scumbag handymen. (At least, I don’t think there is. If anyone knows how to get money back from handymen who performed unacceptable work without permits, please let me know.) I now sing the praises of permits! It turns out they aren’t even that expensive -- far less than having the work redone. But that’s my lesson, not the point of this post.

Meat and Potatoes

I received an inspector’s card, found slipped underneath the door of the property, with a hand-written note to call him, that I was in violation, and a permit is needed. The windows were all covered and he came upon the house when no one was there. What is obvious from the outside is siding being replaced. He possibly noticed that new windows were installed, as some of the siding was missing from that area, as well as the window trim. If he was good, he may have noticed a new air compressor for the central AC that was installed. And if he was a superstar, he peeked under the house and saw new plumbing. However, it should be noted that the card said “violation” not “violations” and will need “permit” not “permits”. So maybe only one violation has been discovered. I’m going to ask some questions that seem shady, regarding avoiding permits. In trying to get to the point faster, I’ve put my justification for such actions in the Dessert section at the end. If you have answers or solutions that you would rather not post, but still empathize with my situation and want to help, then by all means please message me privately. My questions are these:

1. Why didn’t the inspector red tag me if he saw a violation?

Is he being a nice guy? Does he want to pose as a nice guy to lure me into opening the door, so he can see inside and hit me with everything he can?

2. What evidence is needed to red tag a property not displaying permits?

3. What can an inspector do to get inside the property?

Can he call the sheriff to force me to open the door? What power does he have to see/get inside the house?

4. If red-tagged and discovered doing work on the property, what are the repercussions and what evidence must the inspector have that you are doing work (i.e. video of you performing work, pics of new work done, his word)?

Is working with the doors closed and windows blocked an option?

5. What would you do, if through your own ignorance of being new to this industry, found yourself in the same situation?

How can I minimize the permits and rework, at this point? Any other knowledge you have about this process that might help? I know the classic (and now deeply understood) response of “Do it right, @$$h0le!”, will come quickly to some. I don’t mind it. You’re right! But, I have to survive this situation so that I can do just that, next time. Any advice beyond that is appreciated.

6. Do you see any flaws in my current strategy outlined below?

I have contacted the inspector via email to avoid getting trapped on the phone. I have asked him what violation he saw and how I can fix it to ascertain specifically what he has seen that needs a permit (no reply after 24hrs). If I can avoid him getting into the house long enough, hopefully the holiday helps, I can get drywall up to cover the rewire and possibly plumbing. Is there any way to identify a rewire or replumb, with enough certainty to demand a permit before or after the drywall is up? (Btw, I have researched all the codes related to the work I have had to redo and have a degree in electrical engineering. I am confident nothing is unsafe. I would not allow that.)

Dessert

I’m trying to minimize the damage of my screwup and not have my family pay for my ignorance. From having read many posts on the topic of permits, I know some of you are boiling with rage that I did not get permits. You feel I have contributed to the poor reputation flippers sometimes get. You are preaching to the choir at this point. I have not only lost so much more in rework, but now have no recourse against the shady “handymen” who not only avoid doing work up to code, but who have no problem or moral conflict with doing work that is unsafe and/or they have no idea how to do. Permits are amazing! Permits protect the future home buyer AND the flipper! If you think I need to suffer financial ruin to really make sure I’ve learned my lesson, I assure you the stress, anxiety, additional costs of rework, and realization that some people (if you can call these “handymen” people) truly have no regard for their fellow human (or even the reputation attached to their own name) has seared this lesson into my mind already. Please note, I know it’s not all handymen, just the low-balling no-need-for-permits type I seem to attract.

Anything done without a permit has been brought up to code, however, it was not done by someone with a license and as I own the house through an LLC and am not an occupant, would still necessitate the work being done by someone with a license (e.g. paid for again, at a much higher price). The stakes are these: if the inspector gets inside and hits me with all the missing permits, fines for not getting the permits, and rework by a licensed pro, I will be ruined and the dream of a family business will have ended in this nightmare. Even without this permit situation, this flip would take a loss for reasons my long-windedness can't get into without writing a book. Suffice it to say, a handyman screwed us in, yet, another way. I haven't even delved into the complications that will arise if this flip is further dragged on due to the looming hard money loan coming due in a few months. I just wanted to jump in and finally pull the trigger after years of research. I knew that reading will only take you so far and needed that real world experience -- getting my wish. Anyway, if you've read this far, and possibly forgotten the questions posed already, the real question is this -- Based on what you know about the permitting process, what could someone do in this situation to minimize the expense? Thanks, in advance.

You can shop around and inquire about their fees and length of time it takes them to close. Also, I know you were considering wholesaling. In that arena, you want to make sure the title company has no issues with either an assignment of contract or double closing -- whichever you choose to do.

A local RE attorney wouldn't hurt. You can get PSAs from many sources including BP (Tools -> Fileplace -> search "purchase"). However, a state- and even area-specific one may be better, especially if you are considering wholesaling.