With the recent surge in wildfires, a whole lot of fire-damaged properties are hitting the market. This is a great time to pick up new fix-and-flips, but because of the level of expertise needed to carry out projects, it can be a challenge to find Private Money Lenders in Arizona who are willing to invest.
If you haven’t worked on fire-damaged properties before, this is one situation where it pays to bring on expert help. Before you jump in, talk to a contractor or restoration company which specializes in fire damage. In some cases, the damage is quite superficial. Homes that are damaged mostly by smoke often need little more than treatment for the scent, cleaning, carpets replaced, and cosmetic adjustments. On the other hand, it becomes a lot more involved when the home ignited. If the fire went unchecked, there can be structural damage and entire floors needing to be gutted, and if the fire department was deployed, chances are there’s mold and water damage too. None of these things means a property can’t be flipped for profit, but if does mean the complexity of the repairs increases.
You’ll also need to pay special attention to permitting and local regulations, as failure to adhere to repair guidelines could lead to issues years down the road. For example, codes typically dictate how much of a stud can be charred without replacement. If you and your contractors are mindful of these codes and do quality repairs, you can walk away with profit and a good feeling about the work you’ve done, but shoddy contractors may try to leave pieces in place that legally and ethically need to be replaced; it’s on you to ensure it’s done right. You’ll also need to address any underlying issues. For example, if something in the home, such as an electrical problem, contributed to the burn, you’ll need to address this too. Details about the damage and the steps you took to repair it will be part of the disclosure process when you sell. That’s rarely an issue with potential buyers if you’ve done the repairs well though.
It’s a challenging time for homeowners as few have the experience or expertise needed to rebuild after a fire. Many simply want to walk away and start over, but are tied down to properties they can’t get out of. Those who work in fix-and-flips are in a position to make a real difference for people during this emotional time. They have the ability to change the life of the family by allowing them to move on swiftly and can give back to communities by helping with the rebuilding process. Overseeing the rehab often works out well for the flipper too—some have seen ROI top 100%. That’s good news for private money lenders, too. When you’ve proven you have what it takes to rehab a fire-damaged property, the person who funds your deals profits alongside you and is often eager to sign up for the next project as well.
Fire-damaged homes can be great bargains and yield great profits, but because of the complexity, banks are quite wary of them and some Private Money Lenders in Arizona are standoffish too. However, if you connect with the right broker, he or she will find someone who understands the nature of what you’re doing and will find you great terms too.
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis Dahlberg Broker/RI/CEO
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.