Real estate wholesaling is a common tactic for people new to the industry because it doesn’t require much startup capital. After all, if you’re wholesaling a property, you’re selling a property that belongs to someone else without adjusting its condition. Recently, more real estate agents have begun wholesaling fire damaged houses. Here’s what you need to know to get started.
What is considered fire damaged?
Any house where a fire has harmed the walls, floors, or interior structures is technically a fire damaged house. Sometimes, this damage comes directly from flames. For example, if a fire starts in the kitchen and burns through the whole house before the fire department arrives, the house is likely gutted. The next buyer must replace the insulation, wiring, drywall, and exterior finishings.
Houses can also experience fire damage from smoke. Even if parts of the house were not physically on fire, they were probably full of soot and dangerous chemicals if smoke reached them. Both can irritate people’s lungs and take a lot of time and money to repair.
How do you find them?
Contact organizations in the community. Ask your local fire department if any houses have burned lately. They may be able to tell you if the owners are fixing their own homes or are moving away. Other first responders, such as EMTs, are also helpful people to talk to.
Next, follow your county’s fire department and law enforcement social media accounts. When a house fire happens, they’re likely to share details about where it is and how extensive the damage is.
Finally, set up a Google Alert for fires in your county. You’ll have to do more digging with this method because not every alert will be relevant to wholesaling fire damaged property. Still, your Google Alert will keep you current and give you relevant information when you reach out to people in your community.
Pros and cons of wholesaling a fire damaged house
The pros of wholesaling a fire damaged house include not spending time or money repairing it. You don’t have to find contractors who can restore the property, fix the electrical system, and replace the HVAC system. You’re also less likely to see a lot of competition. If this is your first prominent real estate deal, a fire damaged property often comes with less pressure.
On the other hand, it can be hard to find buyers for fire damaged homes, especially if the damage is extensive. Also, unless you want to put your own life at risk, you must work with a professional inspector to understand the extent of the damage. Finally, you could get stuck with a fire damaged house if you can’t find a buyer once you’ve completed your contract with the seller. From there, you could start some repairs and sell it on your own, but that process is much more complicated than wholesaling the property.
How to profit from a fire damaged property
Keep your wholesale offer as low as possible so that when you contract with the buyer you’ll earn a significant assignment fee. Talk to a lawyer as you draw up each contract so that no legal obstacles arise. If you have the time, do some cleaning before prospective buyers arrive, and have the formal inspection certified to give your buyer peace of mind.
Key takeaways
Wholesaling a fire damaged house is all about networking. You need people skills to find properties, and you must be persuasive but straightforward to find a buyer. Making a profit is possible if you’re diligent and do your research.With this guide as a starting point, you’re on your way to wholesaling your first fire damaged home.
