12 unit apartment complex need insurance help

[Matt D.]

Hey everyone,
Running into some road blocks in acquiring insurance for a 12 unit apartment complex details below. It’s a little unique, so the “regular” insurance providers won’t quote it, or the quotes I do get seem exorbitant.  Any ideas or referrals would be appreciated!

Details :
12 units total, 2 buildings on same tax/county parcel. Fully vacant, needs rehabbed. Current market value approx $250k. Market value after rehab approx $900k. Rehab estimate is $360k ($30k per unit) - this is to get it into very nice higher end condition.  Need dwelling coverage in event of fire or loss to structure, and also liability for contractors when rehabbing property. 

Once renovated would need to switch coverage to account for rental with tenants, etc. rehab time approx 6 months, maybe sooner (I hope)…
 
Thanks

Matt

[Bjorn Ahlblad]

I have a 12 unit covered by Farmers ins. You could try them.

[Ceasar Rosas]

Hey Matt,

You should need a builders risk policy. The cheapest I found was with Zurich/US Assure. They do my flips in NY, CT, and Pa and I've had success with them. May be worth looking into. I've done up to 4 unit properties with them, so you would need to verify if they do commercial. Hope this helps.

[Peter Nikic]

vacant bldgs are a little tricky.

[Jason Bott]

@Matt D. These deals are some of the tougher ones to structure the insurance for.

When the property is 100% vacant, you can insure it with a vacant building policy.  Most investors planning large renovations will will skip the Vacant policy and move right to a Builders Risk policy.

Builders Risk policies will cover you for the renovations and is typically the policy lenders will want to see in order to secure financing.  The issue comes in if you want to start occupying units before the reno is done.  Builders Risk policies do not want to insure the property once renters move in.

Ideally you want to find an insurance carrier who is comfortable with the 2-3 month period where the reno is almost complete and the complex is below the standard 70% occupancy requirement most carriers demand.

I will send you the carriers we have used for our clients in 2022 for these projects.  If you cant find a standard insurance carrier to do this, the Lloyds of London will offer options.

[Ben Guttman]

Quote from @Ceasar Rosas:

Hey Matt,

You should need a builders risk policy. The cheapest I found was with Zurich/US Assure. They do my flips in NY, CT, and Pa and I've had success with them. May be worth looking into. I've done up to 4 unit properties with them, so you would need to verify if they do commercial. Hope this helps.

 I write a lot with them. They'll do Commercial but it's a diff process.