All Forum Posts by: Daniel Gupta

Hey guys, here's my situation- Would love some input & advice.

I have an apartment house, and one of the tenants had some sort of bathroom party and burst a pipe in the bathroom. It ended up causing flood damage to their apartment, and the apartment below.  When my property manager initially told me about this, they clearly stated it was the tenants fault.

The total bill for damage ended up being $4200. The property manager then emailed me, slightly shifting the blame away from the tenants and asking me if I would just put the bill through my insurance. This is an absolute no-go for me, because of my $2500 deductible, and amount of different insurance policies I carry (would do more harm than good in the long run)

It is in the tenants lease, (property manager's company lease) that tenant must carry renters insurance. This tenant did not have renters insurance.  I was told through my insurance agent that most of the damage would have been covered if they had. My questions is- Is it my property managers job to verify and make sure that they do? If so, I should be able to sue (likely severing relations with PM) through their E/O policy (errors and omissions) 

To my understanding, the tenant does not make very much money, and it would be a long-shot to ever get my money back from him.  Please share your thoughts and opinions, eager to hear the BP response!!

Thank you

Dan

@Jason Bott

Thank you for the response!! 

1- I didn't know its something I could try... I am trying to research and understand the difference between replacement cost vs ACV on claims. At first I thought the only difference would be in a total loss scenario- in which the ACV without question is the way I'd want to go. This apparently might not be the case and they would depreciate claims based upon age ect... My insurance agent is trying to get a full understanding to know to what extent. At first he thought that as long as the claim was 50% or less than the ACV that they would just fully pay it.  

2) These are older buildings, but they are very well kept and updated. I don't know the exact age of roof & all updates, but they are all somewhat modern with nothing needing to be replaced at the moment. Still trying to calculate whether this is a $2500 worth saving!! 

Ken,

Sorry I wasn't more descriptive. They are multi-level and they are apartment houses. They have 13 units in them total, which raises the cost dramatically vs. a single family home. I always search around for a great price!!

Dan

Jeff- Thank you for the reply. Sorry my post was confusing- the numbers were the insurances evaluation, not the assessed tax value. My option is to potentially insure for less which saves me $2500 a year, and still more than covers my initial investment- but covers for a good chunk less might not cover full replacement cost. Dan

Hey guys! Curious what you think on this one.. I have recently obtained a couple houses at a $180k for both purchase price($90k each.) Insuring both of these properties at their assessed value (375k, 285k aprox) would run me 7200 a year. I could also insure them at 'Actual Cash' value and get them insured for $175k each for only 4500 a year. I am into them well, so even at ACV If both would be destroyed, I would still be up on them- but what do you guys think? $2700 is a lot of additional money for insurance!

Thank you

Dan

Hey all- Just wanted to say hi.

I recently stumbled upon this site and it's fantastic and full of very useful information & people, I wish I found this way earlier. I am an investor in Bloomington Indiana. Currently I have primarily single family rental properties, but I am closing at the end of this month on my first multi-family (2 apartment houses, 13 total apartments)  

I primarily enjoy doing 'BRRR' stratigy (although I just realized it was called that) and rehabbing houses. I am not very interested at this time in flipping houses, but who knows maybe someday!! I own a custom car dealership here in town though, so that's enough flipping for now.

I would love to make connections and meet other investors- and ALWAYS looking to find the next great deal on a place here in Bloomington.  Thanks for taking the time to read, and if I can help anyone out I am happy to!

Dan