Fire damage BRRRR? Are they worth it?

Question

Hello all!

I have recently come across a deal that has fire damage. I haven't completely ran the deal but at first glance, it looks to be a very good one. It is a duplex that ARV could quite possibly be 300k above its current list price. From the listing, "Dwelling has been involved in a fire and has extensive interior damage
and needs LOTS of WORK to bring it back to habitable condition."

Has anyone had experience in rehabbing a fire damaged home? Is it something that people don't touch because its scary but in reality its actually worth it?

I know I need to get someone to take a look at it but I just don't know if that alone is even worth it.

Thanks!

Jeremy VanDelinder · Answer

Jared,

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 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.

What market are you in?

I would be happy to look at any pictures and tell you what I see. Let me know if there are any questions I can answer of be of any help,