Wholesaling Fire-Damaged Houses in Rhode Island

The short answer

Is it legal to wholesale a fire-damaged house in Rhode Island?

Yes, with care, and the rules are about to change. Rhode Island’s broker rules in chapter 5-20.5 apply now. A 2026 wholesaling law (S 3136 Sub A / H 7840 Sub A) takes effect January 1, 2027, as the bill text reads. Confirm enactment and final text with the General Assembly and DBR before relying on it.

A burned house is a normal wholesale candidate once the fire marshal and insurer are done. The owner usually has an open insurance claim, a lender with a say over the money, and no cash for demolition or rebuilding. Your contract gives them a clean exit, and your buyer takes on the repair. Read our fire-damaged house guide and assignment guide first.

The bill text adds a written seller disclosure that you may assign for a fee, plus a three-business-day review and cancel right for the seller and for your buyer. It also reaches anyone who assists in assigning an equitable interest more than once in 12 months. Check current text. Our legality guide and license guide explain the background.

The opportunity

Why burned houses sell in Providence

Providence housing is old, dense and often wood-framed. A fire in a triple-decker in Elmwood or Olneyville can leave an owner with a gutted unit and a mortgage on the whole building. Most owners there are not builders. Rehab investors know the neighborhoods and will pay for a deal that is already priced for the damage. You bring the two sides together.

Lead sources

Where to find fire-damaged leads in Providence

• Scanner and news. Fire reports show the address within hours. Pull the owner from city records.
• Drive the neighborhoods. Boarded windows and tarps stand out. Try driving for dollars in Elmwood, Mount Hope and Smith Hill.
• Vacant lists. Burned buildings are often empty. Our code violation leads guide shows where cities post them.
• Absentee owners. Landlords who live out of state tend to sell fast. See absentee owner leads.
• Insurance contacts. Public adjusters and contractors sometimes know owners who want a cash exit.

Your exit

Who buys burned houses in Rhode Island

Rehab investors, small contractors and landlords with crews buy most fire jobs. They want the scope, the claim status and any city orders in writing. Send photos and the adjuster’s estimate when you have it. Our cash buyer guide shows how to build that list.

Some buyers want a double close so the end price stays private. Others take the assignment. Either way, tell your title company or closing attorney early, and read the double closing guide.

Step by step

How to start wholesaling fire-damaged houses in Rhode Island

1. Confirm the owner. Search land records and confirm who can sign. See finding a property owner.
2. Ask about the claim. Learn the insurer, the payout status and whether a lender holds the proceeds.
3. Walk the site safely. Stay out of unsafe structures. Get a contractor or the city to confirm what is safe.
4. Run the numbers. Use the MAO calculator with a repair range, not one number.
5. Disclose in writing. Say you may assign the contract. Plan for the 2027 disclosure and cancel steps.
6. Get a payoff. Request a payoff statement so you know the lien.
7. Assign or close. Send the signed deal to your buyer and close through an attorney or title agent.

This worked example uses round numbers for illustration. A fire started in the upstairs kitchen of a two-family in Elmwood, Providence. The owner lived in the first-floor unit, had an open claim and could not fund the rebuild.

The ARV came to $430,000. At 70 percent, that is $301,000, less $140,000 for repairs, which leaves $161,000. You contracted at $150,000 after giving the owner the written disclosure that you might assign.

A Providence rehab buyer paid an $11,000 fee and a total of $161,000. The seller paid off the lender from the proceeds and kept the rest.

Rhode Island rules to know

Broker rules, the 2027 law and payoffs

Today, R.I. Gen. Laws 5-20.5-2 excludes certain owners and investors from the broker definition, and 5-20.5-17 sets criminal and civil penalties for unlicensed brokerage. The 2026 bill text (S 3136 Sub A / H 7840 Sub A) would add Title 34, chapter 51, with a DBR license or exemption, written disclosures to seller and buyer and a three-business-day cancel right. Enactment was not confirmed from an official source, so check current text.

A fire adds one more rule to watch. Insurance proceeds often belong first to the lender, so your seller may not control them. Foreclosure in Rhode Island runs by power of sale under chapter 34-27, so a missed payment can move quickly. Seller disclosure under chapter 5-20.8 may also apply. Check current rules and talk to an attorney. See our attorney guide.

Learn it with a mentor

Price the damage with a mentor

Fire jobs punish bad scopes. Our mentorship students send photos and estimates, and we help them test the numbers before they sign.

FAQ

Fire-Damaged Houses in Rhode Island: common questions

Keep going

More Rhode Island wholesaling guides

Read the full Rhode Island wholesaling guide or pick another situation below.

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