Mediocre renovation work, what to be on the lookout for

brucef: one of the reason to buy from a flipper is financing, you don’t get 3.5% 30-year interest rate to buy a shell and pay for renovation. If I had the cash lying around, I’d pay for a gut renovation myself, no doubt. Which brings me to the point that I do have a bank in the picture, something the seller is aware of. If lack of DOB permits were the deal breaker you suggest they are for financing, why hasn’t this problem surfaced? If the seller expected me to be unable to obtain financing, why waste time dealing with me?

You make a good point, but we are talking two different scenarios. When I was talking about down the road not getting top dollar, I was thinking that there would be another renovation round that you would want to perform to spiff up for sale. That is the time that getting approvals and closing out permits trips you up with a purchaser’s bank. In your case, the bank is oblivious because there is no open permit. Because there was no permit. Where I was going is that you are stuck with the illegal work done by the flipper, if and when you try to do legitimate work later. The only person from the bank who ever sees the building is the appraiser, who in a curious way may not notice inconsistencies. Title work will discover open building permits, but only an appraiser might notice the kitchen on the wrong floor etc. The important takeaway is that you are signing up with the devil, and the only way to become a vrgin again is gut reno.

Murbard, I do think brucef overstates his case bit because any time anyone buys a previously-owned house where some renovation has been done, there is a risk some of the work is unpermitted and not up to code. It is not, as a practical matter, the case that every time someone opens up a wall to fix or renovate some aspect of their house, they end up having to gut reno the whole shebang. But you need not be distracted by this argument to take a hard look at the problems in your scenario. The problem that I see is that you’ve described enough shoddy work and corner cutting on stuff that is easy to see and that could have been done properly at little additional cost, that you should (or at least I would) be really worried about what else they did that you can’t see. Other unscrupulous flippers have at least the sense to make the visible stuff look pretty and only cut corners where you can’t see it (but where the true dangers lurk). Your guys don’t even seem to know what good work looks like. You are paying a premium for a renovated home and you are going to have to renovate a lot of it again because it will be defective, whether or not the DOB makes you do it. We went through this — we bought from a flipper who was in mid-renovation and we were to close upon completion and before we closed we found so much shoddy, non-code, and frankly hazard-causing work that we refused to close, ended up in a lawsuit, and settled for a reduced price, after which we re-renovated the house including mechanicals from scratch (not a gut- we preserved a lot of details). Having done this, I do not advise it — it is not for the feint of heart or tight-of-wallet. It set us back years in terms of time and money. Buy a fully renovated house where you can see the job was filed — shift neighborhoods a bit if you need to to make this affordable for you. Or find a way to finance the renovation and buy a fixer-upper. But what you are describing is the worst of both worlds. Or, make your seller a super low-ball offer, buy it as is, and gut renovate it, though he probably won’t take that deal.