Burned out Miami MFH Rehab Estimate! Thoughts?

Question

Hi All,

I am currently looking at a potential deal in an solid C class neighborhood here in Miami.

The building is a 4 plex that suffered fire damage and was completely gutted. It's a solid block structure with 2 units on top and 2 on the bottom. I've done pretty extensive fix and flips before but I've never brought back anything on this scale. I know the basics regarding framing, plumbing/electrical rough ins, hvac and roofing and all the associated permits that go with those as I've done all of that before but they've mostly been single family/condos with this being my first multifamily rehab. Given that what do you think i could expect to spend even on a cost per sq ft basis to rehab this project?

Again just estimates from any with experience having done extensive multifamily rehabs would really be appreciated in order to see if my numbers are within the ballpark of making this work.

Building is approximatley 2700 sq ft with each unit being approximately 700 sq ft and consisting of 2 beds & 1 bath.

See pics below:

Jeremy VanDelinder · Answer

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. Also, ODOR is a huge issue. (as alluded to above) If the odor is not properly mitigated that will cause ongoing problems. We can talk through this in more detail, but paint will NOT cut it.

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.

If there is any way I can help from a distance--look at pictures, answer specific questions, etc--let me know. Good luck.

Dave E. · Answer

@Jason Brown

Pics don’t show any fire damage to the structure. It would be worth spending $500 to have an engineer walk it and give you a letter noting that it is safe.

One thing you need to figure in is the smoke smell. It gets into everything. You should figure in the cost to paint all of the wood studs, framing, and subfloors etc before you hang drywall. You will need to use a zinsser or kills oil based primer that will seal it in. The paint smells super bad so whoever is spraying it will need a full respirator and proper ventilation.

Otherwise it will always smell like smoke forever and your tenants or whoever buys the property will complain and you won’t get your money back.

Branden Rivero · Answer

is the property on 2nd ct? if it is ive been to it. I would stay away because since there was a fire it is going to be deemed an unsafe structure attached to it which means architects, engineers involved on top of the permitting process. At least for me its not worth the amount of time it is going to take especially with the city as backed up as they are. It would forsure be a year if not longer project based on my experience

Branden Rivero · Answer

@Jason Brown honestly I didnt even calculate it completely because I knew it would not be a deal I would want with holding costs and plans. Also whenever there is a fire and the fire department is called even if its a small fire they will put an unsafe structure on the property requiring plans for the house. Everything from top to bottom, in my opinion I would stay away especially for a first

Jason Brown · Answer

@Branden Rivero Yes it is the one on 2nd ct. I was seeing fully renovated comps of approx. 800K for them when finished. This is leading me to believe there was opportunity at the right price point. Like I said however I have never flipped one completely burned out such as this one nor have I done multifamily. This is why I figured just extrapolating my single family cost basis over the extended size would not work. I did not take into consideration the possibility of the city deeming it an unsafe structure and requiring an architect or engineer as I had assumed I would simply be restoring the original interior framework of the property through the typical permit application process. Outside of the time factor what would you estimate as total putback costs as being in your opinion?

Jason Brown · Answer

@Branden Rivero the property is here in Miami close to wynwood. Any exact reasons as to why you would stay away from it?

Branden Rivero · Answer

@Jason Brown depending on what city it is in South Florida I would stay away unless its a complete steal of a deal

Burned out Miami MFH Rehab Estimate! Thoughts?

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