Fire Damage Investment Property

[Jacob Elbaum]

Hi,

I've found a property in the Indy suburbs that has fire damage.

I'm looking to invest in the property, and have mostly been chatting with general contractors to get an idea of the potential costs involved in restoring it. 

I was wondering if it makes most sense to talk to a fire damage restoration company INSTEAD OF general contractors.

Also, if there is anything else I should be aware of with estimating potential rehab costs?

Thank you!

[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.

I'm not completely sure what you mean in your distinction between a GC and a restoration company. If a restoration contractor does build-back, they are a GC. I assume you mean a GC that does not specialize in fire-damage vs one who does. 

I would recommend you find a fire restoration company/contractor who specializes in this type of work 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.

As far as additional things to consider in the rehab: 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.

Let me know if there is any way I can help answer questions.