ADVICE NEEDED: Adjuticated Properties & USNTI Insurance

[Leilah Davis]

Hey all! I am a developer in New Orleans. I'm trying to get some real world examples from people who have purchased adjuticated properties through a Civic Source auction (or anyone who has invested in tax certificate sale and actually claimed ownership of the property after the redemptive period) .... generally speaking I understand the whole process, the only thing that really throws me off is the USNTI insurance. 

My understanding is that when you get USNTI insurance through Civic Source there are pre-set rates, but they only insure you up to $12k. If your winning bid is more than that you will need to pay for additional coverage. And if you improve on the property after the purchase (which is what we would intend to do as developers) then you would need to get the policy re-written, in which case the pre-set Civic Source rates no longer apply, and rates are set by USNTI. Is this all correct so far??

For anyone who has done this - how much does USNTI insurance actually cost for a new construction home on a property that was adjuticated? And if you SELL the property (which is what we would intend to do, as we are spec builders) have you had any issues with selling? Did your sales price take a hit? Are homebuyers turned off because of the USNTI insurance requirement? Do you cover the cost of the insurance policy for them?

My biggest concern is that there seems to be a stigma around adjuticated properties, or really any properties requiring USNTI insurance. (I'm seeing tons of wholesalers who are buying properties at auction and then trying to sell to investors, all with the disclosure that the property would require USNTI insurance). So .... Is there truly a stigma? Or is this an unsubstantiated fear that I have?? And please bear in mind I am refering to a stigma in the eyes of your average home buyer, NOT other investors. My guess is that the USNTI insurance just doesn't matter much for rental properties, but I am referring only to vacant lots. We build single family residences to sell on the MLS, not rentals or STRs.

Any info here would be greatly appreciated!!!