Estimating Rehab Costs After a Fire

[Jason Trotter]

Hello all,

I'm a new investor looking for my first BRRRR deal. I've found something that I think could work but am struggling to estimate the rehab costs. This property was seriously damaged by a fire, but the bones seem intact.

Has anyone here dealt with rehabbing a property after being damaged by a fire, and if so, what are some major or unexpected costs that you encountered during the rehab? What are some red flags that I should be looking out for? 

Thanks in advance for your help!

Best,

[Jeremy VanDelinder]

I flip fire-damaged properties and own a fire damage restoration company. It can be a big undertaking, although there can be profit in it IF the numbers are right and IF you have done your homework to know what you are getting into (both big “IFs”). 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. So even elements that don’t appear damaged can be contaminated.

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.

I'd be happy to look at pictures and answer any other questions you may have. Let me know how I can help.