Potential Good investment but Fire Damage

2 Replies

So I found what I think could be a potential good investment. I think I could get it for a low cost, but by the sounds of the description there may be extensive fire damage. No pictures just says "Fire damage, needs rebuild".

If I went for this house it would be my first purchase that I would attempt to rehab and turn into a rental property. Does anyone have any experience with fire damage? Would you recommend a first time investor take it on? I wanted to look for things that didn't need too much rehab, but I like the look of this house and neighborhood and the numbers look pretty good if I do it right. However, I'm scared of what I might see. This isn't a foreclosure so I could contact the lister and get a tour to see how bad the damage really is. If it's huge I estimated it would need 100k in repairs. The exterior doesn't look like it was damaged by the fire much if at all, but that's only by pictures.


What could I expect from a rehab like this? What should I look out for?


Thanks!

@Raquel Blue

I own a fire restoration company here in Southern California so I might be able to shine a little bit of light on your situation. This question comes up pretty often here on BiggerPockets, my first question is always "what is the ARV in the area?". Because in a lot of parts of the country the ARV doesn't support fire damage restoration, Plus acquisition cost. That is usually why these properties are still available. Without any pictures of this I can't give you the most accurate advice, But if the ARV supports a big restoration project then you can expect smoke damage pretty much everywhere that there wasn't fire damage. Meaning even if the bedrooms didn't burn, you still have to take out the drywall seal the studs, joist, rafters, and subfloor for smoke smell. You will need all new insulation, most likely a rewire, and new HVAC system. Not to mention any structural damage where there was a physical fire.

If the arv supports a large restoration then a good next step could be to call the local fire restoration company in your area to write a scope of work that will let you know what needs to be done from somebody that knows what to look for.

Sorry for the long winded response, if you have any questions feel free to ask.

Thank you for your insight @Jason White ! You definitely put some things on my plate I didn't consider. I reevaluated my numbers and it doesn't look like it would be worth it even with my modest estimate of what "needs rebuild" would entail. I may request some pictures out of curiosity to see what they mean, but it looks like it would be best not to pursue this one.

Thanks again! Hopefully I can get some pictures. Even if I don't going forward with it, it would be interesting just to analyze.

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