Fire Damage Analysis and BRRRR
Hey BP,
Would love to get a little insight into a specific deal I'm analyzing. I'm looking into a property in Memphis that has fire damage. I'm in Nashville and haven't been able to go look at the property or anything so all I really have to go off of at the moment is a picture, the listing saying it had fire damage mostly in the garage, and the advice of my realtor/investor contact on the ground there.
The preliminary numbers so far are looking good on the property.
Asking price: $25,000
ARV: $75,000-ish
Rent Rates: $900/month
I'm planning on buying cash and using my capital to also fix it up. Sadly, at this point the scope of work is hard to tell due to the info I currently have.
I want to do the BRRRR strategy in this situation, but my realtor brought up a good point about whether or not I'd be able to get financing on it on the back end due to the history of the fire damage.
So my question is this: does anyone have any experience or specific insight with this type of situation? I'm sure it probably varies state by state/case by case. But is it typically a difficult thing for banks to lend on a property with repaired significant fire damage? Or is it something that wouldn't even be an issue if all the repairs were done to code and passed inspection? Or somewhere in between?
If anyone can shed light on this I'd be much appreciated!
Thanks y'all!
- Tim