KGCI: Real Estate on Air - Flipping Success: How to Avoid Costly Delays Using Permit History

Episode Date: October 5, 2026

Summary:Randy Zimnoch shares a critical, low-cost strategy for real estate investors and agents to avoid financial surprises during a flip: pulling the property's permit history before purchase. By accessing building department records online or in person, investors can identify open permits, code violations, or illegal additions that could require expensive remediation. Zimdoc illustrates the risks of relying solely on tax records with a real-world example of lot-split complications, emphasizing how pre-purchase due diligence provides leverage for seller credits.

Hey there, I'm Randy Zimnach and in this episode we're actually going to talk about a cheap way to avoid unnecessary costs and delays on a flip. All right guys, so this strategy will only work if you actually do this before you purchase the property if you're the investor. And it's basically it's pulling permits history on the property, right? And it's surprisingly how many investor clients of mine actually actually forget this very important step, right? Because why would you want to do that? Well, there's many reasons, which I'm going to actually get into, but let me tell you how first, right? The how is usually could be done online and that's the amazing thing about everything in today's age, right? Everything is online. So for example, in San Diego, many areas in San Diego, we could actually pull the permit history online, which is awesome, right?

Most areas, it will be free. So maybe they'll take. charge you a dollar or two per record whatever it's worth it right whatever the cost is it is worth it this is your property if you're the investor that is going to be stuck with whatever you find on this house right that's that's being carried with it and in other areas you might have to actually go to the city right and actually pull the public records right from the building department right because that's usually where you go you go to the building department you pull the records and it is public information. So in most cases, the city, the building department should be able to provide you that information, right? What is they permit history on a particular property? So it's either

done online or in person. Either way, you have to do it, right? If you're the investor, if you're the agent working with an investor, please encourage them to do that, right? It's that important, right? Because you're going to then have challenges selling that house if there's something unpermitted that you find out down the road, right? So it's mutually important for both parties. So then what can you find? There's three things that could happen, right? You go to the city or you look online, you might find that there is an open permit, right? Well, if there's an open permit, that means someone started the work, submitted plans, permit number was given, and it was never finalized. That means the inspector from the city never came and actually approved

the final work, right? So that's called an open permit, right? Guess who's got to close the permit? You, the investor, if you're the one buying the property, right? So now you know what you're responsible for in terms of open permits. You might also find flagged properties, as we call them. Flagged properties, basically all it means is that there was a violation at some point. Someone in the property was doing something illegal, right? Meaning they maybe add an addition or adding a or we're doing maybe roof repair maybe without a permit something that triggers a permit that was never pulled city caught them in the middle of the work and they flagged the property right in that situation it's a violation so there might actually

be even costs involved right that you as the buyer in the situation if you're the investor you will be responsible for paying that those violations right and at on top of that you actually then have to close that out so now there is a violation not only is it a monetary financial thing you got to take care of but then it's also a probably you're going to have to pull a permit for that specific thing and redo the work and it could be as extensive as demoing something and redoing it it could be just updating the certain areas opening a couple holes in a certain wall I mean it could be

various of things right that could come up however it's common you have either open permits or the property is flagged right the third and the best one the best news is when you find that there were permits pulled but they were closed so you want to know okay what is the history what did the owners of this house you know current previous and previous depending how many owners there were what did they pull permits on what was actually permitted right maybe they renovated the bathroom and permits were were pulled maybe the roof maybe mechanicals the water heater what is it right so that will just give you education on what was done and the permits were closed which is really an amazing thing right if someone actually

pulled the permit how to finalize meaning inspector came checked it out gave it a final approval closed the permit right that will be in the history record in the building department as well right one little tip here that I would like to add is don't always look on the tax records and assume that what it says there is true, right? Tax Assessors Office and the building department are two separate departments, right? They should technically talk to each other, you know, in terms of like the information being passed along. However, I would be cautious and not rely only on the tax records as far as what's there, right? In terms of the square footage, the room count, I would

actually confirm everything with the building department, which is, again, another reason why you want to pull the building history right when you go to the city or the one line here's an example this literally is is happening as I record this episode right I have a client of mine I I got a property I lead on a property here in Ocean Beach right so I brought it to one of my investor clients and the tax records initially shows that there's two legal lots there's three structures on a property but there's two legal lots So they assumed, based on the tax records, their initial analysis, you know, they didn't put it on the contract yet, so they were just doing an initial analysis.

They're like, okay, we have two APN numbers, which is basically two lot numbers. We have three structures. That's okay. But we could basically sell those two lots separately, right? That's what they assumed based on the tax records because that's what it's said, right? Well, then we got the property on the contract with that assumption, right, because they came up with a after repair value, which is the resale value of those three structures on those two lots, right? As if they were to sell them separately in terms of the two lots, right? And they came up with a specific number, right?

So they used that number to determine the purchase price. We got that offer accepted for them. Well, guess what? Now they went to their planner, right, aka R. architect, right, potentially in the area. So we went to a planner here in San Diego and he then started talking to a surveyor. Well, long story short, because there's way too much to go into in terms of the details of this whole situation as it's unwinding right now as we speak.

Bottom line, as of today, literally today, just found out that just because the tax record show there's two lots. The surveyor, actually, after looking at everything, talking to the city, they realize that once the new buyer, whoever closes on the house, pulls permits because all the properties need total renovation, the new code will actually end up applying, be applied here. And the way the lots are situated now, they cannot be sold separately. So even though there's two separate lot numbers, the city, based on what I found out today, might not allow my client to sell them separate. They might have to sell it altogether. Now, you might ask, well, does it matter, right? What does that even matter?

Well, in this situation, of course it does, right? Because imagine if you're selling each lot separately, there's more value per lot, right? With whatever structure is on it. But if you have to sell them together, there is a different value. And usually that value might be a little bit less in most cases, right? So now they're reanalyzing the after repair value or the, you know, aka a recent sale value on this property and we don't know I don't know exactly yet you know where we're gonna be because we're actually gonna go on Monday drive

comparables that actually apply if we were to sell three units on one lot together what is that right what what what are a comparable show us for that price right for that area so now I'm not exactly sure how this is gonna you know unwind where we're gonna be I could assure you we're gonna probably have to ask for a credit right based on this new information, but guess what? The good news is that we are finding all this out before my client closes on the house, right? And we could then ask, hey, seller, look, here's the information we had based on the tax records. We thought we had this. Now we found out we have this

from our analysis. We have the reports from the professionals. We show that to the client, the seller, right, to the other client, which is a seller in the situation. And then we ask for a credit based on valid reports, right, that we did not know prior and neither probably did the current owner, right? It is so much easier to do business then and go to the seller and be like, hey, listen, this is the facts now. You know, we didn't know this, neither did you most likely. This is what we're faced with. We need to buy this lower, right? And most of the time, we will be able to get a credit in this particular situation and have the investor close on the process. property and now they're actually going to continue you know with the project and not

have surprises once they actually buy it right which is the whole point of this episode is like pull the history of the permits of building records on every property so you could avoid costs obviously right in the situation and delays because guess what if you go to the city after you buy the house and you find out all these things and you didn't plan ahead guess what you're gonna have delays and every delay if you're an investor I already know it costs you money every single day that you hold down to that house for an extra day that costs you money right so you do the numbers what is your cost of money that you're using

to hold on to the house and you know how much you'll be able to save