Hurricane Harvey - Now What?

[Ali Dawood]

First and foremost, I hope everyone who was in the path of Hurricane Harvey is safe. My brother is currently buckled down and waiting out the storm in downtown Houston. Once the storm (or any other natural disaster) has passed, how do you handle the damage to personal and invested property? Is it full rehabs for all property, depending on damage? Are there battles with insurance companies to pay for the damage even if you have flood coverage? What if you don't have flood coverage?

[Michael Meeks]

There are a lot of variables. There is going to be huge demand for apartments. Not only are tons of people displaced, you will have an influx of FEMA employees, insurance adjusters and contractors.

I was building a property in Pensacola when Ivan struck. We were just turning our 1st few buildings. Building inspectors became FEMA agents, but we were fortunate enough the housing demand was so high, they came out and performed our inspections. I quickly finished construction on the 240 units. They were 100% leased, with a waiting list, and people moved in as quick as I could get temporary CO's. The company I worked for sold the property within a few months, and walked away with a huge profit.

When Isaac hit New Orleans, the demand wasn't as high. At that time I was able to negotiate claims on several large properties. The hurricane deductible on (1) property was $1M. The initial offer from the insurance company was $1.9M. After negotiations we settled at $2.9M. 

You need somebody that knows what they are doing, or you will leave money on the table. Lots of it. You also need to get an adjuster out there quickly, and remediation under way. You need to be smart. You can get a lot of deferred maintenance covered and reposition your property. You also want to get units back on the market early, as this is peak demand.

Feel free to PM me if you have other questions about strategy.