I know it was stupid to put insurance on the back burner but I've rented the two apartments above my business for 40 years without event. Seems the universe finds guys like me to punish. Although only the roof and tops of walls was burned the apartments need rebuild and I do not have the funds to do it. This becomes a total loss to me. What should I do?  I would like to just sell it but how do I go about that? Thank you in advance for your input.

@Kevin Tucker

Sorry to hear of your misfortune.

Just list it on Zillow or with an agent/broker with a full explanation and plenty of pictures. Properties that have sustained fire damage, are bought and sold often. 

As far as price, you will need to bring in experts to put a number on the damage.

* Structural Engineer to assess the damage

* Make sure you communicate with the city, to learn of their requirements. 

* Contractors

* Broker/Agent to help you with comps

John

Do you have debt on the property or is it free and clear?

If the latter, have you looked at getting a hard money loan to rebuild and then refi or sell? If you can find someone to lend to you based on ARV you might be able to raise enough fund to fix the property and then keep it. You give up a lot of equity in exchange for debt, but you avoid selling at bottom barrel price. There are people that buy fire damaged buildings/houses but it is a smaller buyer pool looking for very deep discount

Originally posted by @Kevin Tucker:

I know it was stupid to put insurance on the back burner but I've rented the two apartments above my business for 40 years without event. Seems the universe finds guys like me to punish. Although only the roof and tops of walls was burned the apartments need rebuild and I do not have the funds to do it. This becomes a total loss to me. What should I do?  I would like to just sell it but how do I go about that? Thank you in advance for your input.

 Kevin, 

Reach out to some flippers and restoration contractors and ask if they know of anyone looking to buy a fire damaged building.  You will probably find someone who is interested.

What you should do depends on what your objective is.  As many have said, you'll find a buyer if you're just looking to get out of it.

First step to realize is that anyone interested in buying the property is going to know you have a fire sale and are going to purchase with the plan on making money.  They won't buy a loser here, they are going to ask for a discount greater than the cost of repair.

Second I think you will want to talk to a realtor to figure out what the value of the building fixed up is and get some estimates on what it would take to get it repaired. You can use that as a guideline to figure out what you are willing to accept for a sales price. You may be willing to give up $15k to avoid the construction process and walk away but you may not want to give up $50k. Assuming it isn't a total loss you could probably find a lender for a HML giving up a first position.

@Kevin Tucker I'm very sorry to hear about what you are going through. Where in the country are you? There are some (such as myself) who work in the arena of fire-damaged properties. There aren't a lot but you may find some. I think contacting a fire damage restoration company and perhaps some wholesalers might be good. 

Let me know if there is any way I can help--I flip fire-damaged properties and own a fire restoration company.

@Kevin Tucker

Completely forgot to add this. Get creative!

Offer owner financing, if you are comfortable with it. Carry the note for as long as you can stand it, so you can use the interest to recover some or all of your losses. 

This will appeal to those buyers that may be scared off by a large cash outlay. 

John

Thanks for the ideas, it gives me direction. I don't know any flippers and all the local contractors I've called are so completely booked until winter I can't even get an estimate to dry in the building.  The property is free & clear Robby and you (and John) are right in I'm not ready to take such a huge hit but circumstances prevail.  

There are more moving parts to selling commercial property than I care to understand.  I've considered an auction but doubt the min. reserve would be met.

I am currently trying to get a new roof and repair outside to curb appeal but inside is gutted to the studs. If City requires engineered plans I'm looking at $150/sq foot rebuild costs which is out of reach w/o financing.

Thanks again for the great input.

Just put it on the MLS. You will be surprised how much you can get for it as value add projects are what's hot right now. I would avoid selling it directly to any contractor they will just try to low ball you. Another option would be getting quotes to repair it yourself and seeing if it might make sense to just do the job yourself.

For insurance moving forward just do high deductibles. That's what I do and it comes out to a nice balancing act of being safe while spending minimum money. Claims are rare and I think we all can pay out of pocket for small stuff so high deductible makes sense while being protected for bigger problems like your scenario.