All Forum Posts by: Cory LaChance

I recently bought my first rental property and would like to show off some DIY savings I was able to capture. The windows were in pretty bad shape and I budgeted to replace them, 8 in total for about $2500. Upon closer inspection, all of the windows functioned great, they just looked horrible. I put in a little elbow grease and scraped off the old paint, put on some new paint, & put new window panes in. Total cost investment is $275! It was a lot of work getting some of the old window glazing out, but totally worth it.

Window Before

Window After

What is the deductible on the premium? You can try to get better rates by increasing the deductible. You can also look up the flood map online by googling "your county" flood map, if you're close to the border of a zone, then it might be worth it. I've seen houses not in the flood zone flood, as well as houses that are in the flood zone never flood... Insurance in Texas is a major expense in rental properties, with homeowners, windstorm required with a mortgage and flood if it's in a flood zone. 

Thank you for the reply, Yenipher. The quotes that I received were based on an estimated replacement value (ERV) of $95,000 and for regular homeowners insurance, the premium is $450/year, for windstorm, the premium is $605/year. The deductible is 3%, which I'll keep saved. I'll only have around $45K in the property when it's all said and done and it'll fetch $850-$900 a month in rent. I'm just curious as to what options others are using to lower the premiums of their rental properties.

Just got my first BRRRR property under contract. The property is in southern Brazoria County of Texas, which has a red hot market going on right now. Anyways, I received a few a quotes for insurance and there are a few options. I'd like BP's opinion on the pro's and con's of the options received.

Here is the response to my question of increasing the deductible to lower the premium.

Yes, increased deductible would be one way to lower. Also, you can go down to 85% of the replacement cost on the wind. Lastly, there is a coverage called "Increased Cost of Construction" that allows for an additional percentage of the building limit in order to pay for the increased cost to comply with building ordinances and laws. (If there's damage to the home, the policy will pay to give you back what you had, but you have to rebuild/repair to the current code and there's often an increased cost to do that. That's what this is for.) I quoted 25% but you can do, 5%, 10%, 15% or 25%. All of that can add up so I'll get you some options.

From what I've read, it sounds like Texas has higher that average insurance costs due especially on the coast. 

What type of insurance do others use on the Texas coast.

Looking forward to hearing some responses! 

Thanks Jon. That means a lot coming from you. I must say that this is my first deal and is also my primary residence. The mortgage guy told me if it were an investment property I am limited to 70% of appraisal value.

A little update on this thread. I bought my house and did a total rehab with private money. I had to wait six months before any mortgage person would look at it to re-finance to get my money back out. I could only borrow 80% of the appraised value.

http://money.cnn.com/galleries/2009/moneymag/0906/gallery.bplive_affhomes.moneymag/index.html

My home town is number 9!!

If this were a rehab or a rental property, I wouldn't ask her. But, this house will be my primary residence so I am confident I will be able to pay her back. We are still going to go to the bank to see what our options are. I really apreciate your suggestions (especially from the biggest guys on the forum) but I am still going to the bank.

Back to my question... Any others that Josh didn't mention.

Thanks again.

I've been trying to purchase an REO with financing and have been putting a few offers without any luck. Turns out that most of the properties are being snagged up by all cash offers. So my mom is willing to help me come up with the cash to fund my deal. I originally was going to use her IRA but found out the is a big NO-NO (thanks again Will!!) So plan B is to tap into the equity she has in her own home. She owes 35,000 and it was recently appraised at 155,000. I will not need more than $70,000 for this deal.
You mentioned an end buyer lenders might require seasoning. This will be my personal home so the end buyer would be me, the bank I decide to refi with might require seasoning?

I am going to the local bank with my Mom to see how she can pull out some equity in her house to help me fund my first deal.(hopefully a HELOC) It will be an OO and I am going to refinance after I rehab it to my liking. What questions should I ask the loan officer when we talk to her. Also, would this deal require a 6 month seasoning to refi as well?