First Multi-family Burned Down in Four Months. Help!

[Albert D.]

What the chance!  The worst wildfire in Gatlinburg, TN in a decade somehow found way to my apartment buildings in downtown (near town center).  Luckily all tenants were evacuated by police the night before and no one was injured.  However, most of them lost all their personal belongings and furniture to the fire.  I provided $1,000 each to all eight families to help them push through this tough period.  Hopefully they can find new places to live soon.

I'm now working with bank and insurance company to work out mortgage and insurance.  Also start thinking about options to rebuild.  Anybody has any experience in these matter please share your thoughts.  Any thoughts are welcome.  It'll be even more helpful if you can help answer these questions:

1. What to watch out for when going through the insurance claim process?  

2. What are the main steps and the timeline should I expect of insurance claim?

3. I'm covered by property damage and business income.  Do I need to make separate claims?

4. How should I think about rebuild?

5. Can I build condos instead of apartments on the same site?  What's the pros of cons building condos vs. apts?

Here are some pictures of the leftover of my properties.

[Account Closed]

@Albert D.

We have had a fire on an apartment ( but this particular one was too small versus the deductible) , a home catch fire while under contract, house burn down (part of a mobile home park ) while under contract, hurricane on apartments while under contract, hail storm roof and siding replacement on a house, and i also contracted the repairs of a commercial storefront that had a car go through it. Talking with other property owners, i have seen other insurance issues too. It seems generally speaking, the property owner can come out better ahead of the catastrophe than before.  r 

Not an expert but here is what I would suggest . Don't sign any contracts! Im assuming there will shortly be a slew of contractors coming through promising this that etc trying to get all these insurance jobs, don't do that on a whim. Document everything! Pictures , videos, everything.  Find out if you need to do something to prevent further damage , I'm assuming its trashed but say if its salvageable  like tapping the roof if there is a hole ( so no rain gets in ).  If these were hosed down by a fire department thats going to have its own damage. Get specific info for needing to file your business income insurance so you can keep the mortgage paid  but the provisions on this will vary and what they need etc.  Talk to your insurance company as you are doing and they will advise.  I think they will connect you with an adjuster to estimate the damages.  You may need to supplement this with your own stuff to figure out cost of repair.  If it goes to rebuild, there will be other issues potentially. I have heard where its a total loss and people just used the proceeds to pay the mortgage but then still were able to salvage a portion of the property.  

You are going to want to get with your zoning department regarding rebuilding and what your options are.  Sometimes uses are grandfather but they stipulate if 50% more of a structure is burned you have to rebuild to todays standard. Insurance companies commonly have a provision for this.  Go through your policy as well .  If its repair, the insurance company may need to structure your payments to you but since you have a lien holder, you may have to work with them on a withdrawal basis( so they know the $$ goes towards their asset repair) . 

Some insurance stuff may be state specific but sounds like you are already on the right track.  If there was a lot of housing damaged in the area, there will be a shortage of housing and the quicker the turn, the quicker you can offer replacement housing for those that need it. 

Your lease should stipulate that tenants should carry rental insurance .  This can go in depth a lot more but thats a quick crash course on some things to do.  Good luck.