Walnut Street Finance Blog

Why Permits Make All the Difference In The World, Even With Real Estate Investors

Posted by Bobby Montagne on Oct 17, 2017 11:29:14 AM

When starting any sort of major renovation or construction project it’s always important to check with your local city or town government to see what building permits – if any – need to be pulled. Perhaps for a small job you’re undertaking yourself none will be required (although you might be shocked to know that in some areas a permit needs to be pulled for something as seemingly small as a dishwasher installation!), but for the types of large scale projects that fix and flippers often undertake, and that real estate investors often financially back, there are usually permits galore that need to be properly applied for and granted before work can take place. Even if you fall strictly on the real estate investor side of the equation and won’t have anything do to with the actual work being done, it’s important that you can trust that the project is being properly managed and everything is up to code. Working with a real estate investment firm that is on top of their game, and working closely with their  developers, means you won't have to worry about whether things are being done properly and feel compelled to check in -  you can rest assured knowing that the firm is taking care of all the details and follow-up.real estate investors

Below, we’ll take a look at three reasons why permits make all the difference, even to real estate investors.

Permits being pulled ensure that shortcuts aren’t being taken

Unfortunately, many people think that permits are simply a way for a municipality to collect a fee when someone decides to do work on their own property. And while it may feel a bit extreme if you’re the one shelling out cash for the permits, the fact of the matter is that permitting regulations are put in place to ensure that the work being done not only complies with local building code, but that it’s also being done correctly. When a building inspector walks through a job site, they need to know exactly what to look for to make sure the structure is secure to avoid any potential mishaps in the future. When permits are pulled properly at the beginning of a project, that means that - as a real estate investor - you can rest easy knowing that the projects your money is backing are going to make it through all stages of the building process, from planning and permitting to the final walk through, with minimal complications.

It means that the work is being handled by professionals with an understanding of locally specific rules and regulations

One of the biggest benefits to working with an investment firm that does their due diligence is that they’ll tend to work with developers and contractors who are familiar with the local permitting regulations. This, in turn, means that a project may move through the planning and permitting phase a bit quicker, since the pros will know what the specific municipalities will – and will not – allow in their plans. A project that moves along quickly and smoothly is a huge bonus for real estate investors. After all, a municipality finding out that a permit hasn’t been pulled halfway through a project can stall things for months while issues get worked out, or derail the entire project if it turns out the proposed work isn’t feasible (or legal). And that means bad news for the real estate investors backing the project, since it could put their returns in jeopardy.

It increases the likelihood of a project being successful

Finally, when permits are pulled on time and all of the specifications are met, it increases the likelihood that the project will be successful. It’s a clear indication that the professionals working on the project are just that – professionals. They aren’t Weekend Warriors who decided to undertake a project that might be a bit larger than they can handle, and they aren’t looking to take any short cuts. They’re working to get the job done right the first time, which should provide reassurance that other aspects of the job are being handled with the same amount of care and consideration. As a real estate investor, that means peace of mind that a project isn’t going to fall apart or be unable to sell at the end of it, which increases the likelihood that the funds will be secure, the returns will be high, and the project will move quickly.

If you’re interested in real estate investing and want to work with a firm that does their due diligence and puts our investors first, get in touch.


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