- Construction Permits Are Not Always Necessary When Rehabbing Homes. Here Are The Pros and Cons To Pulling A Construction Permit For Real Estate Investors...br br Hi, this is Frank Chen with REIClub.com, the only site you need as a real estate investor. Today I’ve got a quick video on whether or not your contractors need to pull construction permits.br br I’ve been rehabbing homes for awhile, and dealing with contractors, I run into the issues of permits. But what i’ve learned, is that permits are not always necessary. Some investors prefer it, but this video is to simply inform you of the pros and cons when it comes to making this decision. br br Pros for Pulling Construction Permit:br - Good for investors with no construction backgroundbr - Highly experienced inspectors provide thorough repair evaluations before work is donebr - Small inspection cost (few hundred) may save you thousands in repairsbr - You know your investment will be brought up to code correctlybr - Less liability - work is more insuredbr - All Additions will be reported - increasing value of your homebr - Take advantage of city Rebates - Air conditioning, windows, etc...br - Time to sell - Most home buyers will want an inspection done - no problems - peace of mindbr br Cons for Pulling Construction Permits.br - IF you are the general contractor - Paperwork takes time - not always approvedbr - Tedious process - city can be very pickybr - Check-ups by project - Delay project completion until city approves the work - Always have someone looking over your shoulderbr - Can be costly due to additional work requested by the citybr - Overall liability is yours - city code, damage to neighbors, etc...br - Working with “licensed” people can be expensivebr - Once the city gets into the house, they may have you bring other stuff up to codebr - All Additions will be reported - may increase property taxbr br Rehabbing Real Estate Investments without a Permitbr - Avoid city code checklist - still needs to be to codebr - Work with more flexible contractors - non-licensed or licensedbr - Some contractors know how to get around permits, and still bring your house up to codebr - Must be careful - city drives around looking for new constructionbr - Befriend your neighbors - could report youbr - Don’t give reason there is construction going onbr - Be Prepared for any liability issuesbr - Be prepared: The city can stop construction at any time, delaying weeks of progressbr - Municipalities have the power to ask you to remove or condemn work not approved by the citybr br Note: When it comes to electrical, plumbing, or even the foundation, it will be very hard to avoid permits.