Pre-closing mundane stuff!
The only other significant item (besides arranging the mortgage and the appraisal) that requires my attention prior to closing is insurance.
And, insurance is getting less and less mundane all the time, especially when I do business in a town on the east coast, and especially since insurance companies are taking a bath this year.
In fact, with two other of my properties, I've had a particular insurance company drop me. The word I'm hearing from inspectors and other investors is that are dropping anybody they can. So, since investors deal in older homes, we get the boot first. They are getting pretty creative about it. On one property there are two steps up to enter the house. They are cancelling me because I don't have a handrail. What a hoot! A handrail? If I put one there, they would simply go back to the property and find something else to drop me for. The reality is that when they want to stick it to the little guy, they will.
For this new purchase, the route to take for inexpensive insurance in a builder risk policy. This is fine while the construction is going on but as soon at there is a tenant in it, I have to change policies. The premium on this builder's risk policy came to around $400 per year. Not bad. I'll only need it for a few months max.
Now in general, other investors are probably going to be your best source of finding who's got the best insurance deals. So if you need it, ask around. Chances are you will start hearing the same company again and again and they are probably a good bet.
Remember though, cheaper is not always better.
Myself, I'm looking into a commercial policy that will encompass all my properties. The insurance per unit will be about the same, but I will have the added benefit of a large liability portion. When I buy a property, I make a call and it's added.
What I'm thinking is that by the time I get this property rehabbed and rented, my commercial policy will be in force. I am told that per property, I'll probably be paying around $400 each per year, which is very competitive, and I'll be covered for liabilities that I'm currently not covered for.
I'll let you know, but it appears that if you have more than a few properties, a commercial policy is the way to go
And, insurance is getting less and less mundane all the time, especially when I do business in a town on the east coast, and especially since insurance companies are taking a bath this year.
In fact, with two other of my properties, I've had a particular insurance company drop me. The word I'm hearing from inspectors and other investors is that are dropping anybody they can. So, since investors deal in older homes, we get the boot first. They are getting pretty creative about it. On one property there are two steps up to enter the house. They are cancelling me because I don't have a handrail. What a hoot! A handrail? If I put one there, they would simply go back to the property and find something else to drop me for. The reality is that when they want to stick it to the little guy, they will.
For this new purchase, the route to take for inexpensive insurance in a builder risk policy. This is fine while the construction is going on but as soon at there is a tenant in it, I have to change policies. The premium on this builder's risk policy came to around $400 per year. Not bad. I'll only need it for a few months max.
Now in general, other investors are probably going to be your best source of finding who's got the best insurance deals. So if you need it, ask around. Chances are you will start hearing the same company again and again and they are probably a good bet.
Remember though, cheaper is not always better.
Myself, I'm looking into a commercial policy that will encompass all my properties. The insurance per unit will be about the same, but I will have the added benefit of a large liability portion. When I buy a property, I make a call and it's added.
What I'm thinking is that by the time I get this property rehabbed and rented, my commercial policy will be in force. I am told that per property, I'll probably be paying around $400 each per year, which is very competitive, and I'll be covered for liabilities that I'm currently not covered for.
I'll let you know, but it appears that if you have more than a few properties, a commercial policy is the way to go
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Bruce W. Ford is the editor of Rehab-Real-Estate.com and is an ACTIVE rehab real estate investor. To read Bruce's special report entitled
"12 Things Real Estate Gurus Won't Tell You", click here!
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