Been wanting to get into fix and flip/ BRRRR investing and just saw a property that I think has some great potential for a BRRRR, but since I have no experience doing a rehab, I would like some input.
just found a 4plex that had a fire in one of the units which that unit is destroyed, while the other units just have smoke and water damage. They are asking $90k for the property. Older 4plex's have been going for around $180k while units built in 90's early 2000's have been in the $200-250k range.
anyone have any experience in rehabbing fire damage structures? What might I expect in rehab cost? Other than a basic remodel, what would I be replacing? Roof, electrical, drywall, plumbing, etc...?
I flip fire-damaged properties and own a fire damage restoration company. It can be a big undertaking, but there can be good profits in it IF the numbers are right and you have done your homework to know what you are getting into. Unless you are rather experienced with this type of damage, it may be hard for your to tell the extent of damage. The place to start is by asking the seller what the insurance company decision is—if they will share that info, that might tell you some of what you need to know.
The challenge with fire damaged properties if you have never done one is that there is more than meets the eye. For example, often fire damage is water damage--they put the red stuff out with wet stuff. Unmitigated water damage becomes mold damage and and there is the potential of extensive smoke damage in the same airspace.
I would recommend you find a fire restoration company/contractor to walk the property with you and give you a good understanding as to what needs to be done. There are many things that could be overlooked as part of the renovation on fire-damaged properties.
Is the property in your area? If so, I'd be happy to help you with it.
that's awesome, thank you for your input. It is definitely a huge undertaking and I wouldn't even know where to start other than get professionals to get out there.
and yes it is. It is in Killeen, I would love any help I can get!
I am a public adjuster and deal with fire claims everyday. As Jeremy mentioned, there is a lot to fire damage that you don't always see. Duct work can be full of smoke or water. HVAC units can be compromised. If you have framing damage, the city/county will usually require an engineer to inspect and design a repair protocol. Properties built before 1980 need to be tested for lead and asbestos. Removal of these items is very costly. Also the city/county may now require you to bring this property up to code-new electric, insulation, framing, accessibility is what we see very often. Larger multifamily may be required to get a sprinkler system. Talk to a reputable restoration contractor or two, and definitely push the owner to provide the insurance company estimate. These are not the easiest properties to tackle! Good luck!
I would get a professional restoration company in there as part of your due diligence and get their input on it. Verify pricing they gave you, and what could happen (worst case) if they found surprises in there. There are ALWAYS surprises. Run your numbers and see if it makes sense. Whenever you deal with anything like, best to not tackle it solo and hope for the best. Get a professional on your team that can give you good answers.
Thank you all for the input; luckily @Jeremy VanDelinder was awesome enough to drive up and walk the property with me. He was very knowledgeable and took the time to explain what he was looking at and what we would need to do to fix the damages. Unfortunately we were told the fire was almost a year ago and that documents are either lost or not available. And with sitting there that long, there is mold growth. Good property for the right price, but they are still asking way too much.
if you have a number that you think (with Jeremy's help) could work, why not try and shoot it over?
He shot and offer over already.