Yesterday, while perusing the MLS, I came across a renovated duplex for sale in a neighborhood we like.
Curious about the renovations, I checked the LADBS website to review the permits pulled.
Of course, there were no permits on file for the rehab.
This infuriated me. Why?
Well, these units are going to compete for tenants with our units.
We are absolutely scrupulous about using permits for our deals, which imposes enormous additional costs, both in money and in time.
When a competitor can plan for a cowboy rehab and get similar rents, it means he can pay more for a building than I can, denying me (and my investors) deals that should have been mine.
I strongly considered reporting this particular cowboy to the city, which would have resulted in a whole round of costly re-piping, inspections, etc.
But I didn’t, because the owner has an FHA loan, so I know he’s a scrappy hustler trying to make one deal work, rather than a professional investor. And I don’t have any interest in ruining his life.
Not sure I would have been so forgiving if this were a pro’s deal.