Property Insurance Rule of Thumb for Deal Analysis

[Richard Solano]

Hi everybody.

I am looking to buy a multi-family property potentially in Raleigh, Atlanta, Orlando, or Ft Lauderdale.  I'm looking for a good rule of thumb for property insurance when I analyze deals. 

As an example, I found in interesting 5 unit condo building north of Atlanta. The current owner says that their HOA fees cover "building insurance"(whatever that means) along with water, trash, etc. and in addition, they pay $5,000 per year in "property" insurance. This blew me away!! I called a local agent and she made it sound like only a couple of companies would insure this frame construction building built in 1985. She said that if it were older, she's not sure if she could find somebody to insure it. Does this sound right?

So is there a rule of thumb (e.g., $X/sqft) I can use to estimate insurance when doing an initial screening of a property? How does that vary between the markets I'm targeting?

Thanks in advance!

Rick