House Flipping | Investing
Should You Obtain Building Permits When Flipping Houses?

by | Feb 8, 2021

Flipping houses is good business and while it seems like the next best thing, you should understand the role of building permits and how they affect house flipping. On initial examination, it might seem like flipping and building permits are on different parallels, there is actually some serious intersection between them. Since fixing and flipping involves you discovering houses with high investment returns upon flipping, fixing or renovating such houses and selling for a profit. Renovating or fixing seems like the less exciting part of real estate skip tracing investing and this is where permits come in. You’re going to need permits to be able to fix houses to habitable standards. Securing the right permits would be a major determinant of the success of your house flipping. While they may seem time-consuming at the moment, permits ensure that any work done on the house was done by insured professionals, keeps your house up to code, and releases you from some risk should anything go wrong in the future.

Why do you need building permits

Having a permit is proof that a third party has reviewed the quality of work done and has approved it .You will almost definitely need a permit if you’re adding square footage to a property, whether expanding your floor plan or adding an additional structure like a deck.

  1. Permits are sometimes required by local authorities and if you are found to be working on a property without the necessary permits it can result in hefty fines, demolition, and removal of the improvements, and probably jail time.
  2. Securing Permits makes the property more marketable and sell faster. Obtaining permits gives credibility to the fixes made on the property and secures your interest especially when dealing with financial institutions.
  3. Getting a permit protects you from potential hazards such as fire hazards and electrical shock. A building permit allows mandatory inspections from the local code official who ensures the project is meeting local code guidelines and safety standards.
  4. It also helps you protect your investment. You can’t fork out thousands in cash and have it demolished or torn out because it doesn’t meet local requirements.

Dangerous tasks also often require permits – this can include demolishing load-bearing walls, installing electrical wiring or systems, or doing any work involving a public sewage line. Usually, purely cosmetic work like painting, replacing floors, and fixtures or patching holes will not require a permit (It is advisable to always double-check your local laws and ordinances).

How Can you secure a permit?

This has to mainly do with the location or municipality within which the property is located. Some key considerations you should have in mind is  

  1. Defining terms with contractors i.e. if you’re using remodeling contractors, It is good to define who will be responsible for obtaining and paying for permits.
  2. Before purchasing a property to flip in an area you have not worked in before, it would be a smart move to call the local building department to find out how to get the needed permits. Costs can be significant and can change the economic structure of your project

To discover properties in areas with cheap and seamless permit processes, Need To Skip can help you discover off-market deals that are not listed on multiples service listings and are less competitive.

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