All Forum Posts by: Chinmay J.

I am not tearing down any walls or asking him to do anything right now. All I want to make sure is I won't get in trouble due to his a) lying (if he is lying) or b) ignorance or carelessness of not getting the required permits.  Or is this one of these cases where if I keep my big mouth shut, I could save myself lot of trouble

Update on this situation:

 I talked to county officials, and they suggested that YES for putting in a drywall and wood stove, a permit is needed.  I relayed this information to the Listing Agent, and she said she will follow up with me.

I received the email this afternoon from the listing agent stating that the third room has always been there since he was a little boy. The owner (apparently) grew up in the house.  Now, my question is how do I know he is not lying. Tomorrow, when I decide to flip this place, and an appraiser comes to see it, is there a blueprint out there for each house that the appraiser goes by to make sure no additional constructions were made?  I don't want to be caught in the middle of this and have to tear down walls after everything is said and done. 

He said, he will take the wood stove with him when he leaves, and it won't convey over to me. So, it won't be my problem. So we are good there. 

Yes, personal LOC. They said $50,000.

@Eddie T.  - Yes, I was approved by TD Bank for $20,000 @ 8% pa. It costs me $25 per year to keep it active. It was quick. Took about 3-4 days.

@Russell Brazil  - Well, if he put in a dry wall to make additional room, then shouldn't he have taken permit.  Also, he has a wood stove. 

Here is the PW County list of what requires and what doesn't require permits that I just pulled. Turned out a lot easier than I thought

http://www.pwcgov.org/government/dept/development/bd/pages/permit-work.aspx

Thanks as always for your input. What should one do in this case. That raises the question, what should one do in this case. Does this  even need to get corrected, or a simple request to county can get this fixed.

@Kami S.  - Congrats.. What do the numbers look like?

Went to this house yesterday, and noticed that the house had 3 rooms.  The owner (seller) was yappin' about how he tore down this wall and that wall and made an extra room for himself. I stood there nodded and appeared impressed.

I come home and look at the County's Tax assessor website and the house is recorded with 2 Bed and 2 FB. So my thinking is that either the guy built one (he is in construction) by not pulling the right permits with the authorities or the county website is wrong.

I am planning to use HML with this transaction, so I am not sure this will be problem for me while buying, but is my thinking that this discrepancy can definitely cause issues when I am trying to flip the property, correct, especially when getting it appraised for loan.

How would you experienced flippers move forward in this situation? I am thinking of going back to the realtor and have her go back to the seller and get it corrected on the county website, provided it can be corrected, if not then my offer price should reflect tearing down the wall. 

Please correct me if I am wrong.. Thoughts?

You misspelled my name, so I never got tagged. I don't have anything to add beyond what others have added. If big ticket items were replaced recently, you will have less CAP EX costs upfront. If they were replaced a while ago, you might incur those costs sooner than later. It also depends on your goals with the property. You want to keep it for long term, then you will incur those costs at some point.. If you want to sell it in next 2-3 yrs, you might not, if you are lucky.

Good luck.

@JJ Mayer - Some things to consider...

Your cap rate is about 8% which is not bad.. What are you accounting for in the expenses? If you are just accounting for PITI payments. You also need to consider about 8% of vacancy (1 month) and Cap Ex (big expenses), PM fees if you are having someone manage it.