IrvineRealtor_IHB
New member
stepping_up said:
You're right on. Take a look at the aerial lot shot to confirm.
50% Loss in Real Estate (or more)
- Thread starter CalGal_IHB
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NEW -> Contingent Buyer Assistance Program
You're right on. Take a look at the aerial lot shot to confirm.
I see a lot those here in CM too. How do you assess the value or lack of value for unpermitted additions? I can only assume that if they don't bother with the permit, then the work isn't done well and you have to remove or spend a good sum getting it up to code. I'm just wondering how you calculate all this into what the price of home really should be.
I don't know how IR2 looks at it, but here's my theory, and I can be (a little?) aggressive: Find recent comps and figure out the price per sq foot. Take that price per sq foot value and multiply by the officially recognized sq footage of the home. In other words, if it's not permitted, it's free. Obviously, this does not work where they have sliced an existing bedroom in half so that the square footage remains the same.
I figure unless you are willing to do the work to make it right, just stay away from the unpermitted additions. If an owner would cut corners on getting permits, where else have they cut corners? Hmm... Legit is, as legit does.
Because of its higher tax base above prop 13's 2 %, chances are that the County reassessed the home when it had its addition done. So most likely the additions were permitted. However I dont understand why the square footage still only show 785.
If you look at the aerial views of Santa Ana, I'd say a good 50% of all the homes have some sort of addition. Of those, a good 50% are most likely unpermitted. If you're buying a home with an addition in it, you can check with the city of santa ana to see if it was permitted. If it's not permitted, you're rolling the dice on whether the inspector will come or not. Only reason they'd come would be if 1) you pissed off your tenants, 2) you pissed off your neighbors, or 3) the place collapsed. If you do have an unpermitted addition, I'd add some extra money in your reserve for repairs calculation depending on what type of addition was done. The majority of the time the city will not ever find out or care.
From my experience, most of the illegal additions are of decent quality. The denizens of Santa Ana have experience in the construction biz, so they usually build them right.
Smart is as smart does, too. The square footage may very well be permitted, but not show up because it hasn't been recorded. Recording triggers a reassessment. Reassessment (except this year!) usually means higher taxes. Many additions that I've seen, especially in Irvine, are fully permitted.
NSR,
Thanks for posting that up.
Looks like there maybe a few other gems out there.
QH Bruin hit it out of the park.
Wasn’t sure exactly where he bought but his numbers are exceptional.
I've done further snooping. It looks like straight up rent on Craigslist for a 4 bedroom in Santa Ana is running $2400+ I've seen two at $2800 and $2900 one mile from the property closer towards South Coast Plaza.
That data point may be very . . . helpful. Thank you.
Rumor has it that the recent fire in Floral Park may have been caused by this very reason.
How long do people think that such rents are sustainable?
$2400 rent, even if it is 50% of income, means $4800/month of aftertax income. If we make the wild assumption that the renter is legally employed, that means $6k/month, at least, of income. are there a lot of $75k incomes in SA? that is what, 3 workers full time at $13/hr?
That's the $164,000 question. Not very long.
How long is $2000 for a two bedroom sustainable? $3000 in Irvine for a three bedroom?
The living wage groups equate poverty causing rents as any rent in excess of 1/3rd of your income. For a 4BD in SN, that's $87,000 a year for $2400 in rent. Or four singles at $11/hr each with a room at avg. $600 a piece. Which sounds like a hassle.
While $2400 sounds like a lot, it is for a four bedroom SFR and tilts in a 20% less than IAC apartment townhomes.
Thanks for doing the legwork on this.
Don’t know much about the SA market but must admit I was somewhat shocked at how high the rents are.
Didn’t think anything would fetch over $2,500.
Not sure about demand or if those rent numbers are sustainable but even on the low end they seem pretty good.
Good luck enforcing that in Santa Ana.
Our Paso home had a box from the early 60's that was an upgrade from the '40's. We upgraded it to today's standards, moved it outside, moved a power line that was grandfathered in, but still dangerous and grounded all the outlets in a 1,841 sq/ft home for a grand total of ~$3,500. Is there some wiring that these 1950's homes would need that bring it up to $10K?
You're right on. Take a look at the aerial lot shot to confirm.
stepping_up_IHB
New member
IrvineRealtor said:
I see a lot those here in CM too. How do you assess the value or lack of value for unpermitted additions? I can only assume that if they don't bother with the permit, then the work isn't done well and you have to remove or spend a good sum getting it up to code. I'm just wondering how you calculate all this into what the price of home really should be.
EvaLSeraphim_IHB
New member
stepping_up said:
I don't know how IR2 looks at it, but here's my theory, and I can be (a little?) aggressive: Find recent comps and figure out the price per sq foot. Take that price per sq foot value and multiply by the officially recognized sq footage of the home. In other words, if it's not permitted, it's free. Obviously, this does not work where they have sliced an existing bedroom in half so that the square footage remains the same.
I figure unless you are willing to do the work to make it right, just stay away from the unpermitted additions. If an owner would cut corners on getting permits, where else have they cut corners? Hmm... Legit is, as legit does.
No_Such_Reality_IHB
New member
I would agree with Eva. It's 'not touch', owner removes, or included free.
For the property above, 1. it looks like every other home in neighborhood. 2. there's a large increase in the tax base above Prop 13, which I suspect means they permitted it. I suspect the SF is orignal or a typo and from the arial view it's obviously not 785. 1785 looks more reasonable.
For the property above, 1. it looks like every other home in neighborhood. 2. there's a large increase in the tax base above Prop 13, which I suspect means they permitted it. I suspect the SF is orignal or a typo and from the arial view it's obviously not 785. 1785 looks more reasonable.
QHBruin_IHB
New member
stepping_up said:
Because of its higher tax base above prop 13's 2 %, chances are that the County reassessed the home when it had its addition done. So most likely the additions were permitted. However I dont understand why the square footage still only show 785.
If you look at the aerial views of Santa Ana, I'd say a good 50% of all the homes have some sort of addition. Of those, a good 50% are most likely unpermitted. If you're buying a home with an addition in it, you can check with the city of santa ana to see if it was permitted. If it's not permitted, you're rolling the dice on whether the inspector will come or not. Only reason they'd come would be if 1) you pissed off your tenants, 2) you pissed off your neighbors, or 3) the place collapsed. If you do have an unpermitted addition, I'd add some extra money in your reserve for repairs calculation depending on what type of addition was done. The majority of the time the city will not ever find out or care.
From my experience, most of the illegal additions are of decent quality. The denizens of Santa Ana have experience in the construction biz, so they usually build them right.
IrvineRealtor_IHB
New member
EvaLSeraphim said:
Smart is as smart does, too. The square footage may very well be permitted, but not show up because it hasn't been recorded. Recording triggers a reassessment. Reassessment (except this year!) usually means higher taxes. Many additions that I've seen, especially in Irvine, are fully permitted.
stepping_up_IHB
New member
Thanks everyone for your comments. It very well could be an error on redfin because we have a permitted addition that all the other sites have recognized except for redfin.
At some point we'd like to pick up a rental. The area that we are looking at, in all likelihood will have some additions to it. I had thought it best to stick with permitted only, but it seems that you may be able to get more value from one that is unpermitted. However, the potential headache and liability goes against my instincts. I'd want to make it legal, which increases the cost.
I'm glad to hear that many of them have been done well. A good contractor/inspector would be able to advise on whether to steer clear or not. If it's done well and free with the exception of what it would take to get the city to give it the green light, it sounds like an unpermitted addition could provide a good value.
At some point we'd like to pick up a rental. The area that we are looking at, in all likelihood will have some additions to it. I had thought it best to stick with permitted only, but it seems that you may be able to get more value from one that is unpermitted. However, the potential headache and liability goes against my instincts. I'd want to make it legal, which increases the cost.
I'm glad to hear that many of them have been done well. A good contractor/inspector would be able to advise on whether to steer clear or not. If it's done well and free with the exception of what it would take to get the city to give it the green light, it sounds like an unpermitted addition could provide a good value.
tenmagnet_IHB
New member
No_Such_Reality said:
NSR,
Thanks for posting that up.
Looks like there maybe a few other gems out there.
QH Bruin hit it out of the park.
Wasn’t sure exactly where he bought but his numbers are exceptional.
No_Such_Reality_IHB
New member
tenmagnet said:
I've done further snooping. It looks like straight up rent on Craigslist for a 4 bedroom in Santa Ana is running $2400+ I've seen two at $2800 and $2900 one mile from the property closer towards South Coast Plaza.
graphrix_IHB
New member
What happens with permitted work is the tax assessor gets the info to up the taxes, but the planning dept. doesn't send that info to the recorder (I think) with the new square footage. So Redfin/MLS and even title sources may not have the updated square footage. Here is the issue with that... if you are buying a place that shows 785 sqft. on title then the lender will need proof that the additions were permitted or value the home at 785 sqft. You or the title company will have to pull the permits and update the title to show the new 1785 sqft.
As for unpermitted additions... as I said before the lender will see the square footage on the title, and the ethical appraiser will appraise the house only on the permitted sqft. The appraiser must appraise the house as if the additions never existed. You can imagine what you think a 1785 sqft. house in SA will be worth when only 785 sqft. can be used for the appraisal. If you want a house with unpermitted additions then you need a contractor to take a look at it first, and assess what needs to be done and what they expect the building inspector will want done. Then the contractor needs to open up any areas where there are water and/or gas pipes, HVAC, and all the electrical work, plus some structural work for the inspector to see. If the building inspector just got back from a weekend in Napa after his girlfriend said yes to marriage and the work is up to code or easily fixable to bring it up to code, then you are good to go and it shouldn't cost much. You can use the cost and time to lower the offer price. If the inspector's wife just left him for his brother, and the work is no where near code and can't be updated easily, then expect a full tear down. A tear down and build up will cost $250-$350 a sqft. depending on the work and materials. Be careful on older homes in SA and CM that will need to add a new electrical box to handle the additional electrical work, that alone can set you back $10k.
As for unpermitted additions... as I said before the lender will see the square footage on the title, and the ethical appraiser will appraise the house only on the permitted sqft. The appraiser must appraise the house as if the additions never existed. You can imagine what you think a 1785 sqft. house in SA will be worth when only 785 sqft. can be used for the appraisal. If you want a house with unpermitted additions then you need a contractor to take a look at it first, and assess what needs to be done and what they expect the building inspector will want done. Then the contractor needs to open up any areas where there are water and/or gas pipes, HVAC, and all the electrical work, plus some structural work for the inspector to see. If the building inspector just got back from a weekend in Napa after his girlfriend said yes to marriage and the work is up to code or easily fixable to bring it up to code, then you are good to go and it shouldn't cost much. You can use the cost and time to lower the offer price. If the inspector's wife just left him for his brother, and the work is no where near code and can't be updated easily, then expect a full tear down. A tear down and build up will cost $250-$350 a sqft. depending on the work and materials. Be careful on older homes in SA and CM that will need to add a new electrical box to handle the additional electrical work, that alone can set you back $10k.
EvaLSeraphim_IHB
New member
That data point may be very . . . helpful. Thank you.
Rumor has it that the recent fire in Floral Park may have been caused by this very reason.
freedomCM_IHB
New member
No_Such_Reality said:
How long do people think that such rents are sustainable?
$2400 rent, even if it is 50% of income, means $4800/month of aftertax income. If we make the wild assumption that the renter is legally employed, that means $6k/month, at least, of income. are there a lot of $75k incomes in SA? that is what, 3 workers full time at $13/hr?
No_Such_Reality_IHB
New member
freedomCM said:
That's the $164,000 question. Not very long.
How long is $2000 for a two bedroom sustainable? $3000 in Irvine for a three bedroom?
The living wage groups equate poverty causing rents as any rent in excess of 1/3rd of your income. For a 4BD in SN, that's $87,000 a year for $2400 in rent. Or four singles at $11/hr each with a room at avg. $600 a piece. Which sounds like a hassle.
While $2400 sounds like a lot, it is for a four bedroom SFR and tilts in a 20% less than IAC apartment townhomes.
tenmagnet_IHB
New member
No_Such_Reality said:
Thanks for doing the legwork on this.
Don’t know much about the SA market but must admit I was somewhat shocked at how high the rents are.
Didn’t think anything would fetch over $2,500.
Not sure about demand or if those rent numbers are sustainable but even on the low end they seem pretty good.
lawyerliz_IHB
New member
I regularly advise clients to add a clause that says overnite guests
are ok, but people who are living there permanently should cause the rent
to go up 100-150 a month. Only fair. More wear and tear.
are ok, but people who are living there permanently should cause the rent
to go up 100-150 a month. Only fair. More wear and tear.
no_vaseline_IHB
New member
lawyerliz said:
Good luck enforcing that in Santa Ana.
CM_Dude_IHB
New member
There are some great, cheap homes in SanTana right now, but spend a little time driving around at different times of the day, and you will see why. Also, the crime is out of control. I drive to court up Flower often, and would NEVER live there. Just a few blocks away from the 1311 S. Flower house, a man was shot while standing on his front porch in broad daylight - victim of two gang bangers taking potshots at each other. If you have been reading anything lately, you'll know that shootings are WAY up in SanTana.
LL, I like that house from a price/aesthethic standpoint as well, but would never, ever, ever put my personal safety at risk by living in inner-SanTana. SAPD has completely lost control, and the horrible City Council and lame-duck SAPD Chief are doing nothing about it.
LL, I like that house from a price/aesthethic standpoint as well, but would never, ever, ever put my personal safety at risk by living in inner-SanTana. SAPD has completely lost control, and the horrible City Council and lame-duck SAPD Chief are doing nothing about it.
stepping_up_IHB
New member
graphrix said:
Our Paso home had a box from the early 60's that was an upgrade from the '40's. We upgraded it to today's standards, moved it outside, moved a power line that was grandfathered in, but still dangerous and grounded all the outlets in a 1,841 sq/ft home for a grand total of ~$3,500. Is there some wiring that these 1950's homes would need that bring it up to $10K?