Most fix and flip investors aren’t deterred by a home that needs renovations. In fact, many investors looking to flip homes are particularly attracted to fixer-uppers because they are undervalued. However, when you come across a home that has suffered fire damage, many investors aren’t sure what to look for. Is a home with fire damage a good investment? What are the unforeseen costs of repairing fire damage? Here are a few things that you should consider:
First of all, it’s worth noting that homes with fire damage can be very good fix and flip investments. Because fire damage scares away a lot of buyers, you should be able to get a home with fire damage at a significantly reduced cost. If you can repair the damage effectively and affordably, your return should be exceptionally high on a fire damaged home.
However, you need to be extremely careful that you do all of your homework, inspections, and pricing research before making an offer on a fire damaged home. Whether the fire was contained to one part of one room or spread through much of the house, you will want to take extra care and time inspecting the home.
In addition to a standard home inspector, you should hire a structural engineer to determine whether the fire affected the structural integrity of the home. Check whether any pipes have melted or become warped, and inspect nearby doors, windows, flooring, etc., for warping that may lead to other issues. Burned electrical wiring can also be an issue.
You should also carefully investigate whether any mold has developed as a result of water used to put the fire out. In most cases, fire damage is accompanied by water damage, and together these elements can create a lot of problems.
Another thing you want to consider is the smoky smell left behind by fire. Burned materials in the home will usually need to be replaced entirely in order to get the smell out. You can also use paints that contain odor blocking solvents on porous materials. Another good option, though more expensive, is to turn to a contractor who specializes in cleaning up fire damage.
If you’re interested in having a private money lender finance your investment that has fire damage, contact ZINC Financial today. Throughout the month of November we’re offering a discounted rate on our rehab loans: you will receive a 1.4% reduction on your interest rate if you book a loan using our Fix and Flip program. This offer will be extended to all clients who have booked loans with us during “2013”. If you are NEW to ZINC or coming back we would like to thank you for choosing us and/or welcome you back by offering .50% off our current pricing on Fix and Flip!
Call 559.326.2509 now to learn more about our residential rehab loan program or to discuss a specific property.