Real Estate Agent · Dallas TX · Member since 2019 · 55 posts · 13 votes
Hi, I have my eye on a fire damaged house going for 75k in an area that comps for 200k. The numbers look good but I have never dealt with a fire house. Walls and structure look good but the entire roof will need to be replaced including the rafters. And to make matters worse, it has been raining like crazy so I'm sure there will be water damage because of it.
Please share your stories dealing with this type of situation. Like they say, "You don't know what you don't know". Any insight into what I can expect will help me make a better decision. Thanks.
Property Manager · Syracuse, NY · Member since 2016 · 601 posts · 384 votes
7y
Hey, I absolutely love doing burn damaged flips especially if the price is right. You can make some serious money by taking bigger risk. When factoring in your estimate make sure to consider your code office might make you upgrade the property to existing codes and not just match what was there.
For example I am finishing up some town houses that were fire damaged now and we had to upgrade the wiring to new code, change all insulation to R15 (old was R13), the sheet rock we replaced on ceilings seperating living spaces had to be double hung fire code 5/8", and the biggest was that when we re-framed the roof we could not copy the old rafters. We had to have an architect design new rafters and we had to build them in the new way.
Investor · Arcata, CA · Member since 2015 · 76 posts · 34 votes
7y
I've had one experience with a fire damaged flip. Do you due diligence and inspect every inch of the house. Run your numbers on the worst possible scenario. As stated above smoke damage is difficult to deal with and will need to be professionally handled. On my project the previous owners had actually covered previous fire damage that was not discovered until we were running full force on the project and opening up the walls. This put a hardship on the project financially.
Take the necessary steps to cover yourself and it can be very profitable.
Lender · CA OR WA CO · Member since 2011 · 17 posts · 7 votes
7y
Pad your numbers...
I've done 2 properties with fire and/or smoke damage and I ended up underestimating the demo on the 1st one. The smoke damage was difficult to gauge and hard to get rid of. But I agree with Tim, they can be very profitable.
Property Manager · Syracuse, NY · Member since 2016 · 601 posts · 384 votes
7y
Hey, I absolutely love doing burn damaged flips especially if the price is right. You can make some serious money by taking bigger risk. When factoring in your estimate make sure to consider your code office might make you upgrade the property to existing codes and not just match what was there.
For example I am finishing up some town houses that were fire damaged now and we had to upgrade the wiring to new code, change all insulation to R15 (old was R13), the sheet rock we replaced on ceilings seperating living spaces had to be double hung fire code 5/8", and the biggest was that when we re-framed the roof we could not copy the old rafters. We had to have an architect design new rafters and we had to build them in the new way.
We bought these for $30k, $100k remodel with an ARV of $350k. 2 month flip.
Next time you do this, look in the drywall channel truss. It saves so much money on fire blocking. Its basically a one inch channel in a truss installed by the factory that 1 inch fire board slides into, and then they use fireproof tape thats like duct tape and you don't even have to fire mud it going up to the deck.
Nice job on the rafters, don't see that much in my area, most the framers around here couldn't do a simple 5/12 pitch like that, everything is trusses in my area, they even trusses dormers here.
We bought these for $30k, $100k remodel with an ARV of $350k. 2 month flip.
Next time you do this, look in the drywall channel truss. It saves so much money on fire blocking. Its basically a one inch channel in a truss installed by the factory that 1 inch fire board slides into, and then they use fireproof tape thats like duct tape and you don't even have to fire mud it going up to the deck.
Nice job on the rafters, don't see that much in my area, most the framers around here couldn't do a simple 5/12 pitch like that, everything is trusses in my area, they even trusses dormers here.
Holy, that would save a lot of time. I think hand framing is quicker than pre-built unless we are doing big walls or something like that.
Real Estate Agent · Dallas TX · Member since 2019 · 55 posts · 13 votes
7y
Great info and pics @Ronald Starusnak. I've heard about the smell problem before, but what exactly is done for that? All new drywall I would assume, unless there's something else that traps the smell.
Property Manager · Syracuse, NY · Member since 2016 · 601 posts · 384 votes
7y
All new fixtures in my case since there was no roof and it rained. We had some old wiring that had a coating on it that absorbs water, all of that had to be replaced and anything in the attic was replaced. You can have an inspector give you a run-down on what will need to be done. It cost me about $300 for an electrician to tell me what I needed to change and then approve it for the codes office.
Investor · Arcata, CA · Member since 2015 · 76 posts · 34 votes
7y
We did a complete rewire including new fixtures. We also removed the entire roof system on the center part of the house including a load bearing wall and spanned the width with new vaulted trusses to open up the space. @Silvia Ochoa
Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
7y
@Silvia Ochoa and we don't know what we don't know.. and unfortunately, you can't know if the numbers look good until you know all the numbers. What is the full extent of the damages? Is the planning and building departments crediting back any fees? Will there be new building codes that will need to be taken into consideration? Where is the house, as that has a huge impact on what the costs to rebuild will be. Has clean up already been done? How much will you sub out? What is your experience? There's so many things that go into figuring a deal like this out
Rental Property Investor · Member since 2018 · 483 posts · 956 votes
7y
Bought a fire damaged 3000 sq ft duplex with detached garage apartment for $5k. remodel $35k. Lived in one side for 4 years. Rent on 2nd unit $850, detached garage apartment $600. Sold for $110k.
Developer · Houston TX · Member since 2018 · 423 posts · 400 votes
7y
@Silvia Ochoa
Fire damage looks scarier than it really is but if you haven’t run away from it and it’s priced right go for it. I have done a few burned homes and advise to get permits and speak with contractors who are experienced in working on these types of homes. If any beams or wood is safe to use then make sure to spray with a special kind of primer that seals the smell otherwise no regular primer or paint will cover up the smell. Place to find stuff to use to clean and special primer to the structure is JonDon.com
They will have lots of things you can use to tackle this job or to have your contractor do it. Best of luck
Realtor · Fayetteville NC · Member since 2019 · 16 posts · 12 votes
7y
Not necessarily on the budget/reno side, however, as a real estate agent I have come across homes that cannot be insured due to a fire damage claim. Do you know if the current owner filed a claim for the damage? If so, I'd call a few insurance providers in your area and chat casually with them to ensure that a buyer can insure the home! Depending your market, if the insurance is not available/astronomically high, this could change buyer's qualifying factors or just deter them all together. I'm in a VA buyer heavy market, and this has been the case in my experience, as we tend to have buyers with a very set income. Good luck and let us know what you decide!!
Contractor · Maple hts, OH · Member since 2015 · 8 posts · 1 vote
7y
@Silvia Ochoa
Silvia,
I’m a contractor I done about three fire houses before the only problem is you may have replace all electrical,plumbing and whole roof could be pricey a lot of permits and rules.
Lender · Grand Rapids, MI · Member since 2018 · 703 posts · 446 votes
7y
Hard to tell from pictures, but it appears as most of that is smoke damage. Look into soda blasting it. Will make the wood look like new and remove all the smell. Much better end product they covering it up with paint hoping the smell is gone. YOu ware going to need a new roof, just FYI. That appears to be a cedar shake roof, because of the skip boards. IF it nots cedar shake, I bet you have multiple layers of shingles, In my area 2 layers and then you have to tear off. Your going to have install osb on the entire roof. I would pay a contractor to come out and give you a bid. This could be home run, or a complete money loser.
Real Estate Agent · Dallas TX · Member since 2019 · 55 posts · 13 votes
7y
Thanks for the input everyone. I don't have any experience with this type of flip. It can definitely be a scary project for a new investor but your experiences, challenges and insights are extremely helpful. Thank goodness for all the good people on Bigger Pockets.
Rental Property Investor · Mansfield, TX · Member since 2013 · 1 post · 0 votes
7y
@Silvia Ochoa LOL I think we're looking at the same property. Is this on Brooklyn Ct? I ran the #'s on it last night and I think ARV is closer to $180K vs $210 (based on recent comps). Do you think I underestimated ARV?