All Forum Posts by: Brian Hinkle

I'm looking for ideas on how to best coordinate constructing new buildings to an existing apartment complex in PA. Our current lender requires that the borrower be a "Single Purpose Entity" and has specifically stated that adding new construction would be a violation of the Single Purpose Entity status. Therefore, the consideration is to create a new entity with the same ownership structure as the borrower, sell the improvable parcel to this new entity, and have the new entity construct the new  units, in hopes that the 2 entities can merge back together when the loan is refinanced in 10 years. 

Will this deal structure result in PA transfer taxes of the improved parcel? Is there any way to structure the deal so it is clean and won't result in a ton of hoops to jump through?  

@Nathan Gesner - Thanks for the explanation Nathan. We currently use Appfolio for our property management software. Appfolio offers the tenant liability insurance I mentioned in my previous post. The cost per unit is $9.50 and we charge a $3 processing fee on top. I realize this is costly, but I have the ability to enroll each and every unit if I want. This way it's out-of-sight out-of-mind and my employees don't have to track it as you alluded to. I would be interested in hearing your source for the $5 per month/unit master policy if you are willing to share. 

@Christopher Phillips - I mentioned that we have a large liability policy on the apartment complex as a whole and that the damages are higher than the deductible of that policy. Homeowners insurance does not apply to an apartment complex. This is why renters insurance is typically required for each tenant. We also have the ability to implement tenant liability insurance on each unit, which would carry a much lower deductible but only cover damages caused by the tenant, and not their belongings

@Nathan Gesner - I am in the process of going back and forth with the insurer now.  What is your solution for liability insurance if you don't mandate it? What would your operation do differently if there was a small kitchen fire? 

@Greg M. - The mailing address listed on the policy for the additionally interested party is the correct address. The insurance company failed to notify us of the cancellation and any previous delinquency notices. It is the practice of this particular company to provide us with this information as it is handled this way every other time. They are now claiming that we are NOT listed as additionally interested, but the policy states it in black and white.

Hello,

I am running into something right now that I didn't think I would have to deal with. Each of our leases indicate that the property owner must be listed as additional insured. Some insurance companies do not allow this, so they list us as an Additionally interested party. We are fine with this outcome because we basically just need to know whether or not the policy has been cancelled/renewed.  

I was under the impression that it is the insurer's responsibility to notify us that the policy has been cancelled due to non-payment. Once we get word of cancellation, we can implement tenant liability insurance (where the property is covered, but their belongings are not). 

A resident had a small kitchen fire in late December that would absolutely be covered by renters insurance, but she apparently let her coverage lapse in October. The insurer never contacted us to let us know of the cancellation, so the costs of the damage will be out of pocket as the damages are not higher than the deductible for our large liability policy. I understand that I have every right to go after the resident for payment, but I want to know if I have any leg to stand on when it comes to the insurer.

I appreciate your feedback!

Sincerely,

BH

We own an apartment complex in a country setting in Pennsylvania. We don't have many amenities (no pool, no fitness center, no rec-room, no playground, etc.) We have a large grassy area and are thinking about adding a covered picnic area where our residents can grill, congregate, eat at picnic tables, etc. 

I understand there is a large up-front investment involved as I would want to produce a solid structure on a poured concrete foundation. Does anyone have experience (positive or negative) with the perceived-value of adding something like this? 

My Father in law and I are planning to run a program in Pottstown called the Road to Home-Ownership (RHO) Program. The desired outcome is to turn-around some of the neighborhoods that have been on a steady decline for years. We wish to achieve this by bringing back a more profound presence of home-owners rather than renters, installing exterior cameras and lighting, and providing a lease with option to purchase over a 5 year period. I know I am answering a forum that stopped a year and a half ago, but I am interested in hearing what Pottstown is like now, and what I should be aware-of.

Thanks,

BH 

Hi Jeff,

I live in Spingfield, and work out of King of Prussia. I have seen a few of the podcasts thus far, and look forward to viewing more in the future.

Hello Everyone,

My name is Brian Hinkle. I worked for a service-contractor corporation for most of my adult life so I'm new to real estate. I have recently accepted an amazing opportunity to join a successful-seasoned veteran with over 30 years experience in real estate, but would like to expand my network to what seems to be a great group of people on BiggerPockets.