All Forum Posts by: Jeremy VanDelinder

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. In addition to talking to a contractor who is EXPERIENCED with fire damage, the other source of info is asking the seller what the insurance company settlement 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, as @Kerry Noble Jr pointed out. 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.

In general, if the numbers you cited hold true after further research, it sounds like too lean a deal--at least it would be for me personally.

Happy to help in any way--feel free to reach out.

I'm close by (Round Rock). I understand--our market is a little weird right now. It depends on your long-term goals and your cash reserves to sustain. If you can hold it as a rental and wait out the market, do that. If not, selling it for break even is better than it dragging you down. 

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

The balance on the mortgage is owed by the seller regardless of what happens. This lien would be paid first in the event of a sale. The initial payment that comes from the insurance carrier is called the ACV ("Actual Cash Value") and is a portion of the total replacement costs. The balance (RCV--Replacement Cost Value) will be paid by the insurance carrier at the end. If the owner does not replace (ex. They take the ACV and don't use it for repairs) the the balance (depreciation) will not be issued. Different mortgage companies have different policies on how the repairs are handled but the ACV will sometimes be a two-party check to the insured and the mortgage company. 

Fire damage 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 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 I can be of any help.

"...a General Contractor would also do fine..." Unless it is a tear-down and rebuild situation, probably not. That is a highly specialized trade and should be mitigated correctly to avoid mold growth, odor or structural issues. I will ask my network for a restoration company.

I flip fire-damaged properties and own a restoration company which specializes in fire damage, however I do not offer this advice for any reason other than to help you (i.e. I'm not in your area, so I'm not looking to do this job.) I would strongly 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. A specialist is very important to be sure it is done poperly 

(Just for a little info of what I mean: 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.)

Hope that helps. Fee free to reach out with any questions.Good luck!

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. I'm happy to give you some more insights on that if you would like.

As for the deal--purchasing "sub to" is a better deal if you can get it. Start there.

Let me know if I can help in any way.

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. 

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

Do you know how long ago the fire occurred? If recently there is still the potential issue with odor if it has not been sealed property. If a long time (~a decade or more) it is likely the odor has already dissipated. 

Regarding structural--the answers above are solid. Basically--it depends on how bad it is. An experienced restoration contractor and/or a structural engineer could look at it and tell you. Keep in mind, however if there is structural compromise, often a framer can simply "scab" in/"sister" (the proper support without removing the old. (Can explain further if needed.

Regardless, I would definitely use this as a point of negotiation if I were in your shoes.

Good luck! Let me know if you have any other questions I can help with.

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 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.

Let me know if I can be of any help.

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. In the absence of an insurance settlement, I would usually recommend getting a restoration contractor to look at it, but it sounds like you have already done that.

I don't understand exactly what is meant by the fact that the restoration company "won't touch it." If they are a restoration company that is what they do. So either this means either 1) its beyond their ability or 2) what they really mean is it's a tear-down. 

If it does turn out to be a tear-down, remember to back the cost of demolition out of your max offer. It may cost you significantly to get it to buildable condition. 

I'd be happy to look at pictures and answer any other questions you may have.