Fire Damaged Homes?

[Chris Anderson]

I'll cut right to the chase. I'm just getting started and don't have much to get into a property. That said my price point is low compared to home prices around me. In my area there is a property for sale that has had some fire/smoke damage for 115k when other properties in the neighborhood are selling for high 200s and into the low 300s. I realize this would likely be a full gut and a huge undertaking for a newbie but the upside potential got my gears turning. Does anybody have experience with houses like this? 

[Jeremy VanDelinder]

Sorry I'm late in on this one.

I flip fire-damaged properties and own a restoration company which specializes in fire damage. 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. 

At first blush the numbers don't sound as one might think. 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. Also, ODOR is a huge issue. If the odor is not properly mitigated that will cause ongoing problems.

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.

One last thing--as a general rule of thumb, I don't recommend someone taking on fire-damage unless they already have significant experience in rehab as fire-damage can add another (potentially expensive) layer to it. 

Let me know if you have any questions I can help with.