Tenant called last night, and her house is missing!!!

[Andrew Fidler]

There are so many ways to present this, but lets just start by saying no one was hurt and everything seems to just be an insurance claim and a displaced tenant who is being taken care of in every way.

I got a call last night from my tenant of 2.5 years saying that she returned home from visiting family over the holidays and HER HOUSE WAS GONE.

When she pulled in the driveway she found that the whole house was torn down...the garage, the house, the landscaping...everything is gone. (Ok well the house is there in theory, it's just had the air removed from it and it's in the basement)

I drove over this morning and here's my rental:

https://dl.dropboxusercontent.com/u/75744546/IMG_1...

I am being told by the Toledo Fire Dept that there was a fire reported on Monday January 1st at 4am and the structure was demolished by 6am...full report requested but it seems to be have been a pretty straight forward demolition. (There is a school four properties away so they may have wanted to prevent school kids from investigating the unsafe structure) 

It's not humorous at all that a tenant lost her home, I am unsure if she had renters insurance but I set her up with my church St Pauls Episcopal in Maumee where they operate a food pantry and keep a charity fund for just this purpose and she already has the red cross housing her. She is an LMHA Section 8 tenant who has been with me solidly for over 30 months and her call to me was to ask about rehousing. (Ironically I just posted about ongoing delays and inefficiency at HUD/LMHA here in Toledo so I will be unable to move her to another of my houses. I have a network of fellow investors including PIN Toledo so I don't anticipate she will have any issues rehousing as long as LMHA can process her voucher)

The good news is I had insurance in place and the claim has been filed. I will keep the group apprised of the process and lessons I learned...going on 8 years in the business this is my 3rd fire and first total loss event.

[Andrew Fidler]

Conclusion on the fire story in Toledo-

The fire report says the fire originated in the living room but from an unknown source but not nefarious in nature.

The tenant Section 8 so she's moved her voucher to another house but did NOT have renters insurance. (I have started pushing our tenants to get renter's insurance and am offering to pay half of their premium (normally ~$20 a month total) so I'm trying to remove any reason for those who need the coverage the most not to have it when they need it. I'm mulling over adding the coverage to their rent amount and having us pay their premium for them...if they failed to pay their full rent amount we'd move to eviction. This is currently in "Andrew's Brain" so it's just an intent. "How do we help the poor help themselves" is a common question I ask myself and those who serve the same segment of society I do)

My insurance company paid out our ACV policy in full, I believe I have the highest sale price for 43608 for the next decade.

I highly recommend everyone evaluate their policy and ensure you have:

1. Coverage that you are comfortable with. I keep Actual Cash Value on my house in Toledo because it's not a "tear down and rebuild" area. I planned from the start to just take the cash and sell the grassy lot to a neighbor for a $100 bill. Replacement value is absolutely essential if you have to get another house out of the deal like the one you are insuring.
2. Liability Coverage. I have already enjoyed a $250k lawsuit for an event that wasn't covered by my insurance. In the business we say "Whatever doesn't kill you makes you smarter", well after 14 months of being on pins-and-needles the lawsuit was ended and I walked away unscathed but far wiser about the importance of great insurance. The standard $1 million dollar policy is an excellent move...if you are in a nice area you want to increase that!
3. Income/Rent Replacement. Every time I've had a claim I could take my time renovating and re-renting...the lost rent was being accrued each month so I could finish my current projects before I prioritized it. It has provided a good ~6 month icing on each claim and absolutely stops panic regarding how our bills are getting paid.
4. Buy/Sell Adjustments. It's not a good feeling to be sitting at the conference room table chatting with your team about a newly purchased house renovation being transitioned into a rental and realizing you've been flying for 60 days without a parachute. If you don't tell your agent to ADD the property (in writing always) then you are totally screwed if you have a loss. Similarly when I am sitting at the closing table and signing paperwork I email off the "Pull this puppy off my insurance policy" email...you don't want to pay your premium for months only to realize you were insuring someone else's building!