About to close on first apt, insurance question.

[Manuel Savorelli]

Found a 9 plex that cash flows after underwriting it including property management and all expenses. About to create LLC. My question is regarding insurance. At what point will I need to discuss insurance on building and what type of policy is recommended? Thanks

[Joseph Gozlan]

It depends on the type of financing you are getting. If you finance the purchase, most lenders requir payin som or all of the first year's insurance at closing. 

In that case, the latest you have to choose and vet your agent/policy is about 3-4 before closing.

Having said that, I would NOT recommend leaving this to the last minute. Being surprised that late in the process by the cost or the fact the property is in a flood zone for example is going to be really bad. 

I recommend you shop and compare insurance options during you due diligence period so if there are surprises you get walk away from the deal with minimal financial impact. 

One more tip, check with you PM (if you have one). Sometimes they have the option to add your property to a group policy that covers all the properties they manage. In that case your costs could be lower.