"Two thoughts. First, I don’t understand the mold inspection."
Marketing expense. I own a marketing firm by trade and as a result, approach everything from that angle LOL. Investors might know it's not an issue, but I'd venture most home buyers don't. I'd be using an inspector that doesn't do remediation.
"Craig, contractors make less money on insurance jobs, not more."
Based on my own experience with a large claim we had to make on our primary home when a pipe broke flooding half our first floor, there are a lot of hoops the contractors have to jump through with a large claim.
As it was relayed to me, anything over 20-25K in repairs where I am requires that the mortgage company is the one paid the claim and not the homeowner. Then everyone doing any repairs has to be licensed, and the mortgage company requires every contractor to submit several pieces of paperwork and a signed bid. Then they pay the contractors directly (if it's a larger job, then in phases). Then it all has to be inspected at the end. And each back and forth takes time.
We had such a hard time finding contractors willing to deal with the extra hoops and time in getting paid that we paid for the repairs out of pocket and then submitted all needed paperwork to have it reimbursed to us (and then the mortgage company sold our mortgage MID-CLAIM, so it took over seven weeks to finally get our money back, so I can see why some contractors were like "no thanks" when we contacted them.)
"I just finished a job with a contractor who did my job based on cash payment and we were 30% below what he charged neighbors who were letting their insurance pay."
I don't have a ton of investing experience, but this plays a lot to the psyche involved with marketing. I think it's less about what the insurance company pays (see my experience above) and more that people are less careful and less "need a deal" when they're paying with what they view as "someone else's money." Contractors with marketing experience or intuition are likely folding that into their bids.
As an investor, you're also likely more savvy than the average homeowner with "what things should cost." Prior to getting into investing, the one place I never paid too much re repairs or improvements as a homeowner was in electrical work. My ex-husband is an electrician and I am very confident in what the "right" prices are. I'd routinely get electrical work on past homes I've owned at prices my neighbors were "suprised I'd gotten" once I got the bid, questioned the numbers (if high), and mentioned my ex is also an electrician (who doesn't live near me).
"Rae, the flooded house market isn't going anywhere. Slow down, read up on remodeling, get educated, and there will still be flooded houses to buy."
I'd actually prefer one that didn't flood, but I'm trying to get one more house under contract before the end of the year and the sub 200 market here is flying off the shelves much faster (and at a higher price) than usual. Don't worry, I definitely don't argue with my numbers as I can currently calculate them when making offers LOL. There was only one house I went to my ceiling for and it's because I really wanted it (still do). There was a flooded comp that sold one block over and I offered her slightly more per SF for her home, but she can't seem to reconcile that only someone who wants to buy the house as a primary residence can hit the numbers she wants. My offer was only as high as it was because she's in a very small farm area I really want to have a hold in. (It's still on market and we check in once a week).
My curiosity was more if I was "missing something" in my calculations (admittedly, probably with regard to whether I could increase my offer on the house above). I'm also lucky to have an experienced flipper (she does about 3 houses a month) as a good friend and she gives me input on my numbers, but she also plays in a higher price range than I do and always works with higher-end finishes as a result.
"because somebody watched a Chip and JoJo marathon and went out and wrote a check"
Legit choked on my coffee.
