All Forum Posts by: Paul Cox

Reposting from one of our FB forums:

Homeowners who need to file insurance claims - read on. (If you can not access your home at this point to assess, assume you'll be filing an insurance claim and keep reading.)

In 2018 I had to file 3 Flood claims and 3 Wind claims on 3 different oceanfronts on Topsail Island during Hurricane Florence. I, unfortunately, have alot of experience in catastrophic losses and large scale insurance claims.

This is my attempt to give back to this community and provide some of my hard earned wisdom in the hopes that it helps you navigate this horrific situation.

1. Get a support network now. I promise, the only people that will truly understand what you are going through are the people going through it with you right now, or the people who have been through something similar.
   
   Your friends won't understand, your family won't understand - they can sympathize - but they can only empathize so much. Be mentally and emotionally prepared for the attitude - well, if you can afford a second (or third or fourth home) then you can afford all of this. Be also mentally and emotionally prepared for the folks that think just because this is not your primary home, it's somehow less of a catastrophic event for you because others did lose their primary homes.
   
   That's why it's vital for you to form support networks with people who are in your same boat - ideally in the same community.
2. This truly pains me to share - but most of the disasters I'm seeing across Western NC are going to be considered flood events and if you do not have a separate flood policy you will likely get no coverage. That's what happened to many of the towns in 2018 - entire towns under water - but no one had flood insurance. I know there will be SOME disaster relief - but... Best to call your insurance agent now.
3. File a claim NOW - get in line for adjusting. You can not make repairs until your adjuster from the insurance company comes out to assess your damage and there will be a back log months long. Put your name in the queue NOW. The absolutely best case scenario is a week from now you finally see your home and miraculously have no damage and you call off the adjuster. During Florence we couldn't physically get on the island until a full week later. Most waited to call their insurance companies until then. I called the next morning after the storm hit. I literally had my insurance companies adjuster be one of the very first ones on the island and that made ALL the difference. In this case, speed is your friend.
4. If you can, pay for repairs out of pocket (or on a credit card or with a loan) do so and then submit the actual bills to the insurance. (only after the initial adjuster has been there) After comparing notes with dozens and dozens of owners during Florence I was one of the few that got insurance coverage for the actual repair costs and was "almost" solvent. Most others who got their checks first and then went to get repairs done found that their checks did not even remotely cover their necessary repairs.
5. The longer you wait to make repairs, the worse the damage gets - wet things in hot humid weather grow mold FAST.
6. To hire a public adjustor or not - most will say yes - I say, depends on the person. I personally fired my public adjustor - it's a long story - but I was capable and better able to advocate for myself better than a public adjustor could. But I know I'm in the minority. Understand you're in for a long awful emotional, physical, financial and mental journey. It's not for the faint of heart. I think I have an above average amount of grit and resilience from past adverse events and Florence and the aftermath near broke me. Be prepared.
7. Even if your personal home is only mildly impacted, but your community who relies on tourism has a BIG impact, understand that this will take months or years to recover from and some communities will not recover. If your home is an investment property that you rely on guest stays to pay your mortgage and insurance and other expenses - be prepared for the community impact to you as well.
8. Many mortgage companies will offer mortgage DEFFERALS during this time - it's a great way to manage short term cash flow - however, please keep in mind - this is NOT mortgage forgiveness. If you have a $5k mortgage and you get a 6 month deferral, you will owe the full $30k in 6 months. It doesn't just skip 6 payments and tack it on at the end.
9. When asking questions - ensure you're asking them of people who are knowledgeable in what you are asking. The internet is both a beautiful and a terrible thing. Do not rely on crowdsourcing when the impacts are this big. Pay for professional advice and advocacy when needed.
10. Support each other - you WILL get through this. Likely battle scared and forever changed - but you WILL get through it. Love, peace and prayers to every single person impacted.

I recently switched all three of my properties to USAA as they now do STR insurance. They also have my auto insurance, and I took out an umbrella policy with them as well. One of my properties cost me a little more, but the other two were less than what I was paying with foremost insurance.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $287,000
Cash invested: $100,000

Our newly remodeled 4BR / 2BA mountain villa features all new furniture, 3 King beds and 1 Queen Bed, and plenty of parking for at least 4 vehicles. The villa is located in a quiet neighborhood on Massanutten Resort, making it the perfect place to enjoy all that the area has to offer. We're about 1 mile from all the activities that the resort offers.

What made you interested in investing in this type of deal?

Love the STR arena of investing and providing a place where guests want to pay you their hard-earned money to stay at your place.

How did you find this deal and how did you negotiate it?

Found it through Zillow. It was listed for 258K. We contacted our realtor for a showing and offered what they were asking for with an escalation clause up to 300K. We eventually settled on 278K with no inspection contingency. We were allowed to do an inspection, but wouldn't use that in the negotiation.

How did you finance this deal?

30 yr fixed Vacation/2nd home loan with 10% down.

How did you add value to the deal?

We thought it might be a quick cosmetic flip and be able to get it on the OTAs within 3 months. Well, COVID was going on, supply chain was tight and finding contractors that could get you into their schedule was extremely challenging. The whole remodel ended up taking about 2 years and we put in about 80K in remodel expenses and furniture. Definitely a lesson learned about how to do it better in the future.

What was the outcome?

The property was put on the STR market OTAs in May of 2023. We've had a slow start, but are hopeful for improvement over this coming summer.

Lessons learned? Challenges?

Don't try to do everything yourself in hopes you'll save a bunch of money. It will end up costing you unless you're already a skilled contractor type individual.

Get to know your neighbors that maybe around your property, especially if you're in a HOA situation where there's a mix of STRs and residential properties. It will pay dividends.

Ask for referrals on contractors for everything.

Mike,

just bought 3 of them and will put them in each of our places. I don't even drink the stuff and have no idea what a French press does, but I hear some prefer that method and for this price, I'm willing to experiment with adding this amenity.  Thanks Mike

Paul

I just put 4 of these into our property in Branson. You're exactly right Mike, they are perfect for bedrooms...thanks for sharing

Paul

Are you still able to be profitable even with doing it by the book? Is there an STR meetup in your area where issues like this are discussed? You can't be the only one playing by the rules and so there are probably others fed up too. There's power and weight with numbers. If you're not profitable with STR, then look at another strategy like LTR or consider selling and picking up something in a STR friendly community.

Best of Luck and kudos for doing the right thing!

Paul

Thanks for the response @Mei Li. We've been doing pretty good self managing so not sure I'm willing to part with 20% but they thought they could get our listing up to the high 90s or even over 100k. That got my attention.

Thanks again 

Paul

@Mei Li

Are you happy with Vacasa? They have reached out to us to try and get our Branson Property under their Management for a 20% management fee. Not sure I'm interested, but wanted to check with others that use them to get a feel for them.

Thanks

Paul

@Jason Stoltzfus,

Definitely following...I'm a little more hands on but have just signed on up for Price Labs and are in my 30 day window trying to learn how to best use it.

Will have to look in to this Guesty for Hosts, though again, I like my messages to be a little bit more personalized for each guest. 

We have 3 properties now and our cleaners take care of all supplies for our cabin in TN, Our cleaners in Branson let us know when we're running low on supplies and we send her an Amazon order with all the things she needs. Our property in Virginia is still being set up, so not sure how supplies will go with that one. We're meeting our possible new cleaners next Saturday, so that will be part of the discussion.

We use instant book on both AirbnB and VRBO and haven't ever had any issues thus far after 2.5 years.

We use labels for our cabinets / drawers / light switches, but use a more transparent type of tape that doesn't jump out at you from a distance, and our guests like that as well.

I have yet to send a lease agreement for a guest to sign for staying in any of our properties. When the guest agrees to our rules by booking via AirBnB or VRBO, that's all I've felt I have needed. Again, have never had an issue thus far.

As we grow, I know that automating as much as possible will be crucial, so thanks for starting the thread.

All the Best

Paul

Yep, I wished we had gotten a local contractor to do all the stuff we've been doing over the last 10 months. We had contractors for the major stuff (HVAC, Electrical, Flooring) but man, kick me if I ever want to tackle a fixer upper on my own again.

Congratulations and welcome to the Nut! Have you joined the STR owners Facebook page?