All Forum Posts by: David Collier Jr

Try splitting the coverages with two different carriers. For example windstorm with Citizens and hazard with Tower Hill etc. Can bring the rates down. I have three properties in Broward and that is what I am doing currently. 

Also just keep in mind characteristics of the property that carriers wish to avoid such as roofs 10+ years old, old/recalled electrical panels, no impact windows etc. 

Yes wind insurance costs are up. As far as the hurricanes some areas seem to be more prone than others such as the panhandle and west coast. I am in Broward county and it has been a very long time since we had a real serious named storm hit (knock on wood!). 

One thing that is happening w waterfront homes here is the new seawall code requiring they be at 4' NAVD. If you want to redo your dock you must also bring the seawall up to code. That can run up to $1,000 a foot with most lots here being 75-100' in width. 

The increase in insurance costs definitely hurts those on fixed income especially in condos. As of now, it seems there are plenty of buyers stepping in to take properties off their hands. The older aged condo market is tough with so much new supply coming online and breaking ground. 

I live in and own three properties in Broward county; SF and duplexes (STR). As of July's Broward county YoY report:

Closed sales up 7.5%

Median sale price up 4.2% 

Original list price received down only 1.5% to 96.3%

Inventory and median days to contract up 50% 

Inventory and months supply up 56%

As far as a 20% price drop we are still going in the opposite direction down here. Inventory is growing but has a long way to go. SE FL is a bit of an anomaly however as we have a lot of international investment. 

In regards to interest rate moves, when they drop do we really expect RE prices to trend down? Normally the opposite is true i.e. rates down/asset prices up. We shall see. 

I am always a buyer and anything small multi in my area (Pompano Beach) goes quick and generally all cash. I can't compete as a finance investor in this market. The numbers don't add up. 

I welcome a downturn but as we know from 2008, RE prices did not bottom until 2012 so it takes time. 

I own in Pompano Beach. I watch the market daily and have yet to see any numbers that make sense unless you are paying cash or getting an off market deal. Most of the small multi in my area have been closing cash and still will not cash flow (maybe it's a tax move). 

I agree Palm Beach is interesting with Vandy building a campus there. Also further north such as Port St Lucie where there are many new build res neighborhoods and commercial retail. Those areas will need service workers and duplexes are still in the $400k range. 

Carrier specific. Generally 5. 

14 year old roof isn't too old. The flat roof may prove to be an issue but citizens will have to offer coverage. You might want to put an elastomeric water barrier paint on it but just wait to see what happens. 

The claim you withdrew will show up in your claims history and won't help you cause. 

Pex should be considered an upgrade. 

My opinion, you're worrying about something that may be nothing. Wait to see what happens and go from there. 

You're far from uninsurable from what you stated. I don't know what I don't know of course (prior claims, electrical panel manufacturer, wiring etc.). 

Wind Mitigation and 4 Points within two years are just a new requirement for these carriers. It does not mean they have concerns about the risk. If you are having an insurance inspection done, they'll most likely just walk the outside of the property so clean up any obvious things like trip hazards, broken roof shingles/tiles etc. I just had a carrier make me replace 6 damaged shingles in order to keep my coverage. 

Many carriers are non renewing. Nothing personal or specific to the insured asset. 

Tell your broker to split the coverage for example wind with Citizens and hazard/liability with someone like Tower Hill. 

Background: STR owner/operator and insurance broker.

Hope that helps. 

Had the same issue. I used Aruba permitting services. Not cheap but they will handle its what they specialize in. 

https://www.aruba-services.com/

Owner wants 20% down or owner's says no deal without 20% down? Two different things. I'll assume you tried to negotiate for less and he said no go. 

I'd be trying for 10%. Show him the CoC returns at 20% and ask him if he would put his $140k into a deal like that. The answer is no, so why would you?

$140k cash investment to return couple hundred a month. You 100% will have one or two things happen each year that cost a grand here and there so your cash flow is gone. 

Ok well at least I've got appreciation each year. Nope, you over paid so that's out for some time and the market is trending down/flat.

Paying over appraised value in a mkt like this is concerning. If something happens (big repair, personal/work/life stuff) and you need to offload the property you are not in a great position. The inevitable sh*t will happen that's going to cost a few grand and now your return is even more dismal. 

I agree with Adam, better places for your money. 

I own two duplexes in Broward. Purchased both using 3.5% down FHA loans.

Go low down payment as suggested here. Ignore anyone making a fuss about mortgage insurance of couple hundred bucks a month. If that blows your deal up its not a good deal. 

PMI is a low cost of doing business and the price you pay to keep tens of thousands of your cash allowing you to renovate then REFI out of the loan at a higher value which will then allow you to remove PMI (increase in value lowers loan to value).

Thats what I did. FHA at 3.5%, renovate, REFI 1-2 years later into conventional loan (non FHA) and bye bye PMI.

In Pompano you aren't getting a decent area duplex for under $450k right now. 3.5% down is $74,000 less than 20% down and the higher down payment doesn't do much to your monthly payment. Yes FHA is more expensive loan so consider 5% conventional but that cost is rolled into a loan you are going to REFI out of anyway.

Cash buyers have the edge because they can keep acquisition costs low but also avoid paying very high windstorm insurance. That savings alone can take numbers on a deal from red to black.