Posted by Luke on December 19, 2006 at 21:52:18:
This reminds me of a conversation I had with a rehabber the other day.
He was showing me a property he was just finishing up. It had been fire damaged and the firefighters chopped a hole in the roof to get in.
He turned that into a skylight. It may have been cheaper just to redo the roof…I don’t know…but I thought it was pretty creative regardless.
But yeah, Rose is right.
Fire Damaged House - Posted by Rose
Posted by Rose on December 19, 2006 at 15:00:36:
I just read Jim Kennedy’s “33 ways To Find Motivated Sellers” - one of them was to buy fire damaged houses. How can a real-estate investor make money on a fire damaged house?
Know WHAT you are DOING - Posted by Jimmy
Posted by Jimmy on December 20, 2006 at 07:52:04:
You need to have a super contractor, experienced with fire rehabs. Fire damege is very tricky. The charred surfaces are easy enough to see. That’s not the problem. Heat damage can be 10 times worse, because you can’t always see it. a small kitchen fire may cause you to have to re-wire an entire house, because of the melted wiring.
I do major rehabs every day. but fire rehabs are a different animal.
I’m not saying you can’t make money with burn-outs. You can. But you need to have a very accurate budget before you start.
Re: Fire Damaged House - Posted by Joe Kaiser
Posted by Joe Kaiser on December 20, 2006 at 01:23:14:
Damaged properties are often disproportionally devalued, creating
tremendous opportunity for investors who recognize opportunity.
Targeting DDD’s (disproportionally devalued deals) is a core principal
and fundamental to the subterranean marketplace investor.
Imagine tying that fire damaged property up for next to nothing and
having fix up guys eager for a new project (and with cash to spend)
beating a path to your door.
Get something like that in place and you’re rolling.
P.S. And Luke, it’ll be a FSBO.
Re: Fire Damaged House - Posted by Don (VA)
Posted by Don (VA) on December 19, 2006 at 18:02:05:
I’m not familiar with Kennedy’s book. But any “guru” or “expert” who provides advice on finding motivate sellers should explain how to profit from that particular circumstance.
I would assume (yeah, I know, when you ass-u-me, it makes an…well, you know the rest) that you find properties that have been sufficiently damaged that they’re currently unrentable (or uninhabitable), but not sufficiently damaged that they’re structurally unsound. Same concept as finding a property that needs a moderate rehab.
You’d get a property inspection to find out what needs to be done. Then you’d approach it like any other rehab. Offer 70% minus rehab costs. Just make sure you’ve had a good inspection so you don’t uncover any expensive problems. I’d expect that Kennedy (or people with the same approach) would suggest fires that have been confined to a certain area (a kitchen grease fire, a bedroom smoking fire), so the uncertain/damaged area is more likely to be easily defined, examined, and rehabbed. And you’d look for properties that hadn’t been too damaged by the firemen/women…water damage, holes chopped in the roof, that sort of thing.
Hope that helps.