What's your formula for insuring a flip?

[Doug Danoff]

Hi All,

I've found a flip in the Boston suburbs.  First one.  So many things to work through!

I was curious how experienced flippers calculate the insurance they take out on their rehabs.  The combo of vacant and builders risk coverage cost was a mild shock.  

For argument's sake, if I'm acquiring the house on a small plot of land for $300K and I expect the rehab to cost $200K, how would you ensure this?  The full 500K?  Something less?  This kind of coverage seems to be about $500/month based on my initial round of quoting.  Seems nuts, but absorbing a total loss in the event of a disaster would not be an option for me.

The house would be vacant for the 6 month rehab.  I also need liability since I don't yet have an GL under my company.

Many thanks!

[Jason Bott]

Originally posted by @Doug Danoff:

Hi All,

I've found a flip in the Boston suburbs.  First one.  So many things to work through!

I was curious how experienced flippers calculate the insurance they take out on their rehabs.  The combo of vacant and builders risk coverage cost was a mild shock.  

For argument's sake, if I'm acquiring the house on a small plot of land for $300K and I expect the rehab to cost $200K, how would you ensure this?  The full 500K?  Something less?  This kind of coverage seems to be about $500/month based on my initial round of quoting.  Seems nuts, but absorbing a total loss in the event of a disaster would not be an option for me.

The house would be vacant for the 6 month rehab.  I also need liability since I don't yet have an GL under my company.

Many thanks!

 Doug, there are insurance programs specifically for flipping.  These policies have the ability to adjust from Vacant, to rehab,  to Vacant or rented.  Payments are month to month and are typically more competitive than the traditional set up you were quoted.  If anything, logistically it is a much smother process.

I'll send you the company my clients use.

Good luck