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.
Specialist · Grand Rapids, MI · Member since 2016 · 1k+ posts · 611 votes
7y
@Silvia Ochoa
Fire damage is always worst than inspections show and once you start tearing out walls city will say you need to update everything else as well. Sounds like that job is a minimum 80k with rafter involved for a seasoned investor and a long project. If you get stuck in any type of market correction thats slim pickings. In alot of cases you are better off just doing a complete teardown or close to it when significant fire damage is involved. We had a flip where thats exactly what we did but because we tried to salvage as much as we could it cost us three times as much because we did it in stages versus just all at once. We ended up adding a second floor and 800 square feet so since you are going to take off the roof and rafters add some square footage if you can.
Investor · Madsion, CT · Member since 2017 · 10 posts · 1 vote
7y
@Silvia Ochoa
I have done those type of remodels in the past there’s a lot of redo on the places I’ve done in the past plus inspections to make sure it’s all up to code for the current year. So lol out for all new permitting and updating for your bottom line
Syndicator and Fund Manager · Victor, NY · Member since 2012 · 760 posts · 345 votes
7y
@Silvia Ochoa
I’ve done these. If any of the rafters or trusses have charred wood but look able to be reused then you’ll need an engineer to submit plans to strengthen and reinforce. It’s typically and easy fix.
Plan on replacing all the drywall if it even looks like smoke damage. The smell is incredibly difficult to get out of a whole house no matter what type of sealing paint/primer you use.
Once tearing out all the drywall plan on upgrading everything to current code, although some municipalities might be more lax on that. Things like expanding exterior wall depth for new insulation requirements, new electrical requirements ect.
Rental Property Investor · Dyersburg, TN · Member since 2019 · 45 posts · 31 votes
7y
@Silvia Ochoa It depends on the amount of damage. I have dealt with a handful of burn outs. The first thing I do is call the local building inspector because ,at least in my local area, fire damage will have to be inspected before occupancy will be granted. The inspector will tell me what he wants done to grant a new occupancy certificate. Also I will always call the electrical inspector or utility company to see what they are requiring before service can be reinstated. Those two conversations will give you a good idea as to scope of work needed.
Real Estate Coach · Round Rock, TX · Member since 2015 · 431 posts · 235 votes
7y
I'm a bit late to the game on this post, but I flip fire-damaged properties. Some good advice above. The biggest things are getting a quote from a contractor who has experience in fire-damage and talking with the city about what will be expected on the remodel. There have been a lot of posts here that have gotten into the particulars of what to do as part of the rehab, however my caution would be that--unless you are going to do the work yourself (which I wouldn't recommend unless you have experience with it)--those particulars aren't terribly relevant. And the city is your biggest "wild card."
It's fairly obvious that you will have to replace anything with fire damage, but the smoke damage is what many people underestimate. At minimum you will need to seal the wood that has smoke damage. You will need to do smoke remediation--everything that smoke touched will need to be sealed or cleaned by a remediation company.
If the numbers work, go for it. There can be a good bit involved, but potentially some good profit in the end.
BTW-One of my fire damaged properties ended up on HGTV after it was completed.
Real Estate Agent · Dallas TX · Member since 2019 · 55 posts · 13 votes
7y
@Jay Van Zandt yes it was, lol. The comps definitely justified 200K, especially considering you'd be offering a semi new construction...new roof, electrical, ect. I decided not to pursue. I'm not quite at that level yet, lol. @Charles Kao I had not considered adding the second floor and square footage. Genius!
My home has got fire last month and thus after that to recover the damage it would have taken lots of money, but due to the insurance policy in which We had an agreement over the Fire Damage. But at the time insurance company denied the claim, thus one of my uncles suggested to contact the Alliance public adjusters, who will guide properly. Should I go with them?