All Forum Posts by: Gary Schiefelbein

I want to thank Pat for prompting this gathering.  Very insightful and met a good group of investors, real estate pro's and heard some good ideas.  Hopefully we can make this a regular event.  

Very inspiring.  Congratulations. 

As my wife and I get ready to implement buying more rental properties we are looking for anyone who has experience with Lenders in our area that we can seek out.  We have been talking to lenders, but we are hoping someone on Bigger pockets might be able to narrow the field a little more for us.  

What we are doing is basically the BRRRR strategy, but we are concerned that we won't be able to find a lender that will finance deals like this when the loans are under $50K. Which in our area there are a lot of opportunities like this in SFH market to buy, put some money into and turn around and rent at a decent cashflow margin, to decent renters. We currently own three such homes, but used a cheap funding source for those three that is not available anymore. We have the money to finance the purchases with cash, but we do not want to leave our money in after purchase and rehab. We want to use it for the next one and so on and so on. I know local banks are more flexible than the big boys, but we are looking for specific banks that others have used.

So we are struggling a little with the lender side of the equation and would like to hear from any one who has experience in our area regarding implementing the Brrrr method and who they worked with on financing. 

Thank you in advance for any input and direction.  

As an insurance agent and a landlord I am curious to see if any of my fellow landlords require their tenants to carry insurance as part of their lease agreement.  Since I only own a few properties I have never made this a requirement of my lease.  However I have benefited as a landlord from my renters carrying a rental insurance policy.  I had a renter who set their lampshade on fire in one of the bedrooms. Don't ask me how as I don't really believe the story they fed me.  But anyway, it burned part of the dry wall and charred some of the carpet.  Because they had renters insurance their company came in, did an estimate and wrote me a check for the damages and repairs.  It saved me having to take out of pocket to fix the place, and the hassle of trying to recoup the cost of the damages from the renters.  

As I work to grow the number of rental properties I own its seems like a reasonable addition to the lease as a requirement. I could require the tenant to list the company/LLC as a named insured on the policy with the agent. That way if the policy gets canceled I would be notified by the insurance company.

Interested to hear thoughts on this.  Thanks 

Congratulations Anthony on taking action.  The hardest part is getting started.  

Peter M,

If your policy says "included" on it than the policy will pay up to the coverage A limit on your dwelling. Each carriers policy can vary a little, so double check with your agent that the demolition is covered.  It may be a separate line item that has a limit on it.  I have a spreadsheet that we use to calculate an estimated exposure.  You just plug in some basic information and it spits out an estimate. 

I'd be happy to plug the numbers for you if you would like. Just need year of construction or last upgrades, square feet, building coverage amount and is it sprinklered or not. 

Thanks 

Gary

I know this site mainly focuses on how to buy investment properties, but I thought I would touch on a subject that may help someone down the road avoid a potentially expensive pitfall through the proper insurance coverage. Yes I know insurance is a boring topic, a necessary evil, no one wants to think about it until its needed, but making sure you have the right coverage will protect all your hard work you put into building your real estate empire. I know I sound like an insurance agent, probably because I am one. 

Many of you that own multi unit complexes have a BOP Policy that bundles liability, property coverage etc... If you take a look at your insurance policy there should be a coverage called building ordinance of law.  Basically that is coverage that an insurance company provides in the event you have a covered loss to part of your property and when you go to rebuild you have additional costs due to bringing the property up to current city or county codes.  Like upgraded electrical, heating, ventilating, air conditioning, plumbing, ADA, etc...

Where this comes into play is if say a tenant of one apartment unit sets his unit on fire, burns it up and now you have to go in to rebuild his unit.  City comes in and says when you rebuild, you have to bring it up to current codes, which you think is no big deal, its just one unit. What could and has happened is that they aren't just going to require you to bring the one unit up to code, but the entire complex because of that one unit fire. Now the money starts racking up.  

On some policies this is an optional coverage, on others the standard policy starts at $10,000, but can be increased.  Most people don't really think about this coverage, because most people are trying to get the cheapest insurance they can buy.  Its worth the few minutes it will take to pull out your policy and see what kind of coverage you have for building ordinance of law.  Don't just rely on your agent to verify, because many agents don't fully understand the significance of that coverage, or better yet don't understand the potential risk/cost that could be incurred by you if you don't have the proper coverage. 

Hopefully this little piece of information will help someone avoid a crippling future expense.

Thanks 

Gary

What institutions are giving these rates usually? I know I could call around to all the different lending institutions in my area, but if I can narrow it down it would be a better use of my time.  So I appreciate your feedback.  Thank you very much.

Gary

I am a real estate investor and also own an insurance agency.  If you need help with insurance on your properties or just have insurance related questions email me or give my office a call. Let me know if I can help.  We can write insurance anywhere in Kansas or Missouri.  Thanks Gary   gschief@farmersagent.com/ 417 358 6373

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