(954) 585-2274 - 1660 NW 65 Avenue, Suite 1, Plantation, FL 33313
Broward Real Estate Investors Association We are the premier real estate organization for everything from networking to mentoring successful real estate investors.

How We Make Money Off Illegal Additions

In this episode Ryan talks about how to use Illegal Additions to your advantage. In every negotiation there are two sides, the buyer and the seller. If you are wholesaling a property, then you will be negotiating as both the buyer and the seller. As the buyer, you will need to use things like Illegal Additions to bring the price of the property down. Illegal additions can actually cause more of an expense than adding value to a property. If you are going to rehab a property, then pulling permits could expose the illegal addition to the inspectors for the City or County. This could cause you to have to get Architectural and Engineering drawings to then make the illegal addition actually legal according to current building code. At least this is the story you will give to the seller. Most likely your buyer will not care about the illegal addition. If it is a garage enclosed to an illegal bedroom and your buyer doesnt need the extra bedroom, then it is relatively inexpensive to bring the garage back to a legal garage. If they chose to rent the property out and keep the bedroom to get a higher amount of rent on the property, they dont have to worry about the inspectors. If they are not doing a rehab or permitting any changes to the property, then no one is going to know whether it is a bedroom or garage. We see this a lot in Broward County as overall there are more properties with garages in Broward County than in Dade. In Dade County we see more properties with illegal structures that are usually referred to as the “in-laws quarters”. But again, if the property is going to be a rental there is usually no one checking up on this unless it is a section 8 property that needs to pass inspection. We purchased a property in Hollywood recently that was a 5 bedroom and 3 bath. The garage was the 5th bedroom, but it was not needed. We got the property at a good price in part because we told the seller it would be expensive for us to get Architectural drawings and Engineering to make this a legal bedroom.  In the area the houses are 3 and 4 bedroom. So it was simple. We demoed the bedroom in the garage, put on a new garage door, and now we have a one car garage! Dont shy away from illegal additions as they can be used to your advantage.