Updated over 6 years ago on . Most recent reply
Fire Damage...Would you do it?
Hi BP
I am contemplating purchasing a flip property that has extensive fire damage on the inside of the home. It is a brick 1 story home on a concrete slab. I've been in the property (With a GC) and 99% of everything in the house was destroyed by the fire. So the job would be a complete gut and basically a new home for the inside. However foundation-roof-and all of the beams running through the ceiling/attic appear to be fine and untouched by the fire. The GC has handled fire damage jobs before and guaranteed me he could do the inside of the house (and fill in a pool in the backyard) for 100K
The numbers
Purchase $10K Rehab $100K ARV $150K
I have the money for the purchase and some of the rehab. I've gotten the green light from one hard money lender to finance the rest- and I am waiting to hear from a local bank and some investor friends that would offer better rates. I am still waiting for an insurance quote to have all my numbers to completely analyze the deal.. but I have the general picture down its looking like after everything I would have around a 25K profit.
Pro's in my mind=
-It's a complete renovation so I feel like that would cut out the "unforeseen issues" factor.
- I am very confident in my ARV estimate because I just bought a home on the same street a few houses down
- I will be a real estate agent by the time I would go to sell this house so I could save money/build my network etc..
- The home would likely not be hard to rent, it's in a great neighborhood
Con's in my mind=
-Its a huge project and I've never handled a straight up flip project let alone one this big. I'm not scared to take it on but I'm worried that might be more because of my personality and not because the deal is so perfect.
- I know next to nothing about fire damage.. this is why I searched for a while to find a GC who knows a lot about it.. but still seeing the entire house look like burnt toast is daunting.
If anyone has experience with a situation like this I'd appreciate the input/advice. Thanks!
Aaron