Posted by phil fernandez on February 21, 2000 at 18:13:05:
Hi Glenn,
Nope.
Thank God for Fire!.. - Posted by HR
Posted by HR on February 20, 2000 at 07:31:24:
Friday, I just bought a 5 bedroom house for $2000. It needs about $8000 in work, and will rent Section 8 for at least $600/month. I should have all my money back in 24 months. Fixed up it’s only worth about 25k. (It has a new roof, vinyl siding, and nice back yard, though). I’ll keep it as a long-term, inner-city section 8 cash flow rental. I’ve been wanting to experiment with one of these for awhile, and this will be my first.
It was a bank reo, owned by the Money Store. They originally wanted 24k for it, but when a couple crack heads got into it and torched the second floor during a drug session, the Money Store became a serious don’t wanter! The price dropped to 8k, I offered 1k, they counterd at $2500, and we settled at $2000.
The fire damage is all cosmetic (doesn’t that sound fun? Cosmetic fire damage? lol): broken sheetrock, scarred walls, etc. Everything is in good shape, though. No structural damage; the firemen got there quick.
Anyway, I’m grateful for fire! I’ve wanted to tackle a fire damaged property for awhile. I have a hunch this can be a lucrative niche. (Hey Joe Kaiser, why haven’t you developed one of your outstanding courses for fire damaged property yet? lol. I’d buy it! I could use it about now…)
Anyway, this will be my first fire rehab. After the convention, it’s time to get dirty and have some fun!
Cheers (and hope to meet many of you in Atlanta)
HR
Fire-friend.
Re: Thank God for Fire!.. - Posted by Mr. Ed
Posted by Mr. Ed on February 20, 2000 at 09:49:23:
Much interested in keeping in touch. I’m in Atlanta.
Seeing a lot of fire damage and other potential
challenges. E-mail direct. We need to talk
Re: Thank God for Fire!.. - Posted by phil fernandez
Posted by phil fernandez on February 20, 2000 at 09:15:04:
Hi Hal,
We did a fire damaged house deal up here recently.
There was a house that was torched so the owners could collect insurance money. The arsonists got caught are still in jail. Meanwhile the house was taken back by the insurance company and just sat there burned and vacant for about five years.
Offers were being made, but talking to the guy that had the case for the insurance company, he said they were all insulting offers. Finally after he got replaced, the new guy wanted to deal when I called him. He wanted us to submit an offer so we did at $7,000. That is you, the insurance company, give us a check for $7,000 and we will take the deed from you. He went to his commitee and they accepted the offer. We got the deed and a check from the insurance company for $7,000.
The house needed major repairs, roof caving in, badly burned, not just cosmetics. So I passed the entire deal to a fellow investor who is also a rehaber. You will meet him at the convention Hal and you two can bounce burned out houses off of each other.
Sounds like you’ve got a sweet deal as your fire damaged house just needs cosmetics.
See ya in Atlanta.
Re: Thank God for Fire!.. - Posted by JD
Posted by JD on February 20, 2000 at 09:11:59:
For a while I have been wanting to target fire damaged props, but have not figured out an efficient way to locate them. Were you looking for a fire damaged prop when you found it, or did you just stumble upon it.
Re: Thank God for Fire!.. - Posted by JPiper
Posted by JPiper on February 20, 2000 at 10:34:58:
Pretty good Phil. Now come clean…how much did you pay to get rid of it?
JPiper
Re: Thank God for Fire!.. - Posted by Chris
Posted by Chris on February 20, 2000 at 09:33:18:
Phil-
Please give some detail on how you got the insurance company to give you $7K.
Was it something along the lines of (numbers pulled out of air)-“Mr.Insurance Man this property is worth $75K in move in condition but I see it will take us $82K to get it in shape. Hey, that means you need to give me $7K to take the property off your hands.”
Looking forward to hearing the mechanics of this one.
-Thanks,Chris
Re: Thank God for Fire!.. - Posted by Chris
Posted by Chris on February 20, 2000 at 09:37:08:
JD- This site might have something in your area.
-Chris
Re: Thank God for Fire!.. - Posted by phil fernandez
Posted by phil fernandez on February 20, 2000 at 09:46:08:
Hey Chris,
What I did with the guy at the insurance company was
1./ Make sure he understood that they had been trying to sell the house for five years and there were no buyers for it other than a teardown.
2./ Told him how much it would cost to tear the house down and dispose of the material.
3./ Let him know that the city was going to hit him with a condemnation order. This created a deadline for the insurance company to make a deal with the first live body that makes an offer today.
4./ I also brought up the liability issue. The house was boarded up, but what if kids got in the house and got hurt. The stairway from first floor to cellar was missing.
With those arguments together, the insurance company just wanted to cut and run at that point. They also mentioned that they don’t like to hold property.
Now for the burning question - Posted by Glenn OH
Posted by Glenn OH on February 21, 2000 at 07:45:01:
Just curious. After laying out all of their risk, and getting the contract, were you gutsy enough to ask them to insure the property? lol
Re: Thank God for Fire!.. - Posted by Chris
Posted by Chris on February 20, 2000 at 10:31:10:
Congrats Phil-
Interesting deal- I bet your rehab buddy has his work cut out for him.
As for the insurance company, it’s amazing they don’t understand their liabilities until you lay it out on the table for them.
-Chris