Buying A Fire Damaged House
I am buying a fire damaged house listed in the MLS for a complete Rehab project. The house need complete Gut renovation. I will have to check with a structural engineer just to make sure the structure is fine.
The numbers:
Purchase Price: 80K
Fixup price: 100K
Soft costs: 20K
Retail Sales Price: 260K
The numbers make sense to me. Has anybody done Rehab of fire damaged houses? Any tips/advice
Thanks,
Zack
80k just for a lot? For 100k you could build a nice little house, and you'd know what you got. You're only looking at 40k profit, and that can get eaten up mighty quick on a project like that. If they'd sell it for 40k, it might sound like a good candidate for a scrape and replace, but seems to me that at 80k, it's not a good deal. You start getting into a burn out, you run into a LOT of stuff that gets expensive fast.
If I were you, I'd definitely try to build a new house (modular or whatever). Brand new house will generate more profit, and you'll be able to sell it quicker. You can even get a construction loan to do that, rates are lower then tipical morgage loans.