Louisville, KY · Member since 2015 · 26 posts · 75 votes
My buddy has a condo that was involved in a fire at the beginning of the year.
The unit below caught fire which caused damage to his unit.
Insurance is repairing the unit. His insurance and a combination of the condo association insurance.
He wants to sell because he lives in another house and has been paying the mortgages plus the condo fee all year and could be a few more months before it's finished. He's tired of paying 2 mortgages.
His remainder of mortgage is $40K
ARV $65k-75k
My question is can I Subject to or even buy it outright and the insurance still repair it??
Repairs have already begun. Unit has been gutted and they are replacing EVERYTHING
Real Estate Coach · Round Rock, TX · Member since 2015 · 431 posts · 235 votes
5y
I'm an investor and own a restoration company.
This is dependent on state law. Do some research or talk to an attorney as to whether your state allows "Assignment of Benefits." The insurance will pay the last installment (called the RCV--Replacement Cost Value) after all repairs have been completed. If there is an "Assignment of Benefits" contract those funds can go to the new owner, but it may not work otherwise.
The other "work around" is forming some kind of a partnership where his name is still on the property but you pick up all the costs and then dissolve the partnership and move it to your name after you have it rented out. (This could get complicated--consult a Real Estate Attorney)