We love property that has had a fire. However would only suggest an experienced investor with an experienced structural surveyor on the team. We recently bought a fire damaged property. We put in a great deal of money to bring it back from “Hell”. We converted the property into flats. Actually this was my second fire deal. I had one which was a block of flats in which we lovingly called it “Burny”.
A good amount of real estate investors shy away from them completely and actually should.Depending on the extent of the damage, it can be very costly to rehab and there’s so much unknown with what will be found in the property, a lot of investors don’t want that size of project or risk. There can be structural issues and the whole property might have to come down.
It is an unfortunate time in their lives for property owner and it’s a very public event. Neighbours are constantly complaining as the property has become an eye sore. People are constantly trying to find out questions like:
• “How did it happen?”
• “Was anyone hurt?”
• “Will you rebuild?”
• “Where will you live?”
• “What all was destroyed?”
Hopefully the insurance company steps in and it is just business for them. Their goal is to unload the property ASAP!
As stated earlier….
Having a builder who knows and fully understands how to handle a burnout is crucial. Ask for references….When dealing with a burnout there is no doubt that building regs will have to be pulled and inspectors will be involved. Having a contractor with experience working in these conditions will likely make or break the deal along with a good structural engineer.
If you come across a burnout that you think would be a great investment deal but aren’t quite ready to take the project under your wing, try assigning the property to another wholesaler who’s more experienced with burnouts.
Either way you can create value and make money!
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