*Updated*
South Bay House renovation has finally been completed. This renovation was very challenging because we were delayed by Coronavirus lockdown where construction and inspections were completely stopped for 80 days. We had to continue making mortgage payments until the bank finally offered us forbearance which saved us. We had no option to rent nor sell a half renovated house.
- Total days spent: 572 days
- Amount spent on remodel: $235,414.75 = $177,490.95 (contractor fees) + $52,583.38 (material cost) + $5340.42 (permit and plans)
- Total City Inspections: 11 appointments
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Location and Hidden Potential
My wife and I purchased a rental home located in the south Bay Area. This south bay house has been the most difficult home we own to date when measured in terms of completeness. It requires a total renovation and contains none of the elements that my wife and I usually look for in terms of completeness and move-in ready condition. So why did we decide on this house you ask. As the real estate cliche says:
What are the top 3 things when looking for a home?
1) Location.
2) Location.
3) Location.
says every real estate agent
The south bay house is in a gentrifying location close to downtown and we feel that the area has a chance to become an affluent neighborhood. Nobody can really predict the future but we felt confident in the location and the house has promise to really shine and generate income once remodeled.
not actual south bay house photo but pretty close (Yes! Definitely “Help me with a dollar” for renovation as the nice graffiti says it all.)
Usually when purchasing a home, we prefer to look for completeness or at least semi-completed homes so renovation costs are minimized. We define completeness as a remodeled home that is move-in ready (new appliances, large bathrooms, copper plumbing, electrical upgrades) with finishes that we agree with. Finishes include no changes to floor layout such as moving walls to make a room larger or replacing hardwood or moving plumbing fixtures around which all sound like simple projects on HGTV but are very costly due to engineering and permit requirements. If the house is semi-completed, we look for how many of the projects we can DIY. Some DIY projects we have completed in the past have been building a new backyard deck or replacing the bathroom vanity with a double sink. However, for this south bay house, the projects necessary are beyond DIY and we felt that the renovation work would need a good contractor.
Permit Timeline
A valuable lesson that I am learning with this renovation is the time it takes to obtain permits far exceeds the time to complete renovation projects. Before you can start demolishing walls in your home, you need to obtain a building permit for the renovations. This ensures that proper planning and construction have been performed and reduces the risk of first time home flippers from selling homes with failed remodel projects.
honey, please don’t wash dishes while I’m cooking
I created the following timeline to document just how much time I was losing from all the necessary administration work when applying for building permits. Another valuable lesson is to avoid making any revisions because you will have to restart the process of applying for a revised permit. For example the 2nd revision was due to adding a kitchen pantry which required new Architectural Designs and Engineering Plans. It took 45 days before finally receiving my 1st revision building permit and another 24 days to receive the 2nd revision permit. Although less time spent than the first permit but still lost time we could have spent completing the construction projects instead of stopping work. In summary, I lost 69 days worth of mortgage payments while applying for permits. Yikes.
** note** The timeline I have created in this post will be periodically updated as the construction projects progress and the renovation gets closer to completion.
Total cost of construction plus permits and plans so far is $114,863 and counting.
| Timeline Milestone | Date Complete | Cost |
| House Mortgage | Feb 7, 2019 | over $1,000,000 |
| Architectural Design completed | Mar 12, 2019 | $2,900 |
| Engineering Plans completed | Mar 21, 2019 | $3,200 |
| submit plans to City Permit | Mar 21, 2019 | $533 |
| City Permit response 1st revision (21 days) | Apr 11, 2019 | |
| Pro-active email to city (lost 30 days) | May 10, 2019 | |
| submit 1st revision to City Permit | May 13, 2019 | |
| **Code enforcement violation found (Apr 2018) | Jun 6, 2019 | |
| **Code enforcement Permit issued | Jun 28, 2019 | $340 |
| City Permit issued 1st revision (45 days) | Jul 2, 2019 | $3,400 |
| Construction estimate initial $85k pantry+copper $4.5k + $1.5k additional labor $10k PSL shear beam $3k | Sep 1, 2019 | $104,000 |
| **Code enforcement violation case closed | Oct 21, 2019 | |
| submit 2nd revision to City Permit | Oct 31, 2019 | |
| City Permit response 2nd revision (8 days) | Nov 7, 2019 | |
| City Permit issued 2nd revision (16 days) | Nov 23, 2019 | |
| Pro-active email to city (lost 20 days) | Dec 13, 2019 | |
| submit 2nd revision to City Permit | Dec 16, 2019 | $490 |
| 1st inspection | Jan 24, 2020 | |
| 2nd inspection (start of Coronavirus shutdown) — arrghh!!! | Mar 3, 2020 | |
| 3rd inspection (lost 80 days) — still paying mortgage payments to sit there and do nothing | May 22, 2020 | |
| 4th inspection | Jun 2, 2020 | |
| 5th inspection — had to purchase more inspection time | Jun 16, 2020 | $130.50 |
| 6th inspection | Jun 22, 2020 | $130.50 |
| 7th inspection — inspector wants me to move plumbing | Jun 26, 2020 | $130.50 |
| 8th inspection — different inspector wants me to move plumbing back — seriously?! | July 1, 2020 | $130.50 |
| 9th inspection – inspection time price increase (sheesh) | Aug 23, 2020 | $135.50 |
| 10th inspection | Aug 28, 2020 | $135.50 |
| 11th Final inspection — I passed!!! Wahoo!! | Sep 1, 2020 | $135.50 |
What happens if you perform construction remodeling without a permit?
The privilege of owning your home allows you the freedom of performing construction remodeling projects on your own home. However, you risk the possibility of being caught by city officials for not applying for a proper permit if your neighbors decide to call an inspector which means all work must cease until permits are obtained.
Now, let’s pretend that you managed to complete the projects without a permit. Another problem you face is when selling the home you will not be able to count the new space as living square footage. For example if you remodeled a space that adds square footage such as an attic or basement, the house listing cannot legally add the square footage as part of the sale and therefore it could negatively affect the sale price for your home. The buyer could argue that he/she would need to demo the room or pay for the permits and construction to make the remodel legal. However, if you intend to keep your house and hope to pass it down many generations as part of your family legacy then you obviously do not care about the resale value.
Do you have any renovation stories to share with me? I would love to hear about it so please leave a comment so we can chat.
