All Forum Posts by: Ivan Oberon

 You bet!  I'm happy to help in any way I can.

Ivan

 Calvin, you definitely want to keep your two operations separate.  You also must realize that you have two "business" exposures and you should insure your rentals on a commercial policy form, preferably on a Master Policy with easy monthly reporting capabilities.

Using a loss control formula of whatever your "Actual Net Worth, Perceived Net Worth and Potential Future Net Worth", you would carry enough liability coverage to ensure your insurance coverage is more attractive than whatever that figure is.  So if your real estate investing "business" is worth more than $1,000,000 (income, assets, etc) then the easiest and most cost effective thing to do is to simply increase your occurrence limit to $2,000,000.  You can do this on a commercial policy form, even though  you're investing in residential properties.  Only when your needs exceed $2,000,000, would you need to begin purchasing an "umbrella" policy in increments of $1,000,000.

I would also recommend working with and agent/company that is licensed to do business in all 50 states and can handle your needs regardless of the stage of renovation your properties might be in.. Meaning, vacant, occupied or under renovation.

I have been in the insurance business for 11 years and actively investing since 2011 and from my experience, this set up serves investors the best.

I hope that helps.

Ivan

 Welcome to the forums.

Since you are a new investor and still unsure which direction you will choose, let me recommend that once you do decide, you stick with it until you begin experiencing successes and do not fall prey to the shiny object syndrome.

Hi @Ryan Galasso,

That is a pretty good basic package of coverage.

The main thing I would be concerned about is the potential pollution exclusion and the ability to scale in the future.

Most companies have a total pollution exclusion and in the case of tenants, the biggest thing to worry about in that regard is carbon monoxide poisoning from a furnace or water heater.  I would only obtain a policy which has that coverage available to me.

@David Roberts

I opt out for my personal dwelling but feel it is easier to scale on income properties by having it escrowed and not having to worry about another payment 2 times per year.  It all depends on the systems you have in place I suppose.

 As real estate investors, we have a very unique set of needs and most companies and agents out there are limited in their ability to structure things properly and even offer the right coverage in many cases.

One thing everyone needs to understand is that anything having to do with rental or any other form of passive/residual income, is considered a business exposure and absolutely needs to be separated from any of your "personal" activities.

I've been in the insurance business for 11 years and as an independent agent prior to becoming a real estate investor, I made this mistake all the time because I simply did not know, and most don't.  So what typically happens is they "bundle" your homeowners and auto and then they start adding "personal dwelling" policies for your rentals, typically with a max limit of 10 properties.  And then of course, you add a "personal umbrella" over everything.

The issue that I learned years ago after becoming a real estate investor and after spending months searching for the "right" coverage and company, is that this leaves your personal assets wide open due to you commingling "business" activities with personal, creates limitations in the way a liability claim may be adjusted and paid and also doesn't even save you money.  

What everyone needs are products, services and policy structures designed by real estate investors, for real estate investors and one of those features is a portfolio type master policy, with no location limits, with the ability to insure multiple controlling entities and properties in any stage of renovation, in all 50 states, offering agreed value, special form coverage with theft and vandalism, the ability to actually reduce premiums incrementally by aggregating locations AND do it all on a monthly reporting basis so that you and your CPA can easily see the breakdown in coverage and premium for every location.  Just to name a few little things.

That is how I have all of my deals set up, mostly flips and turn-keys, and have have done so since 2011.  If you read my about section, you can see how I got into it and my mission to help all my fellow real estate investors find the right education, coverage and company, no matter what kind of investor they are or where in the nation they are investing.

 I feel your pain!

I have been in the insurance business for over 11 years now.  I became a real estate investor about 8 years into my insurance career and quickly realized coverage being offered by most for rehabs, rentals, vacant properties and notes was very inadequate.  I insured the best I could but continued searching as I knew the coverage I had was not the best it could be.  After about 3 months, I finally found the right company with the right products and within the next 40 days I had 12 rehab projects insured with them.  Not much later, I met the owner, quite by accident, at a networking event and two years later, I agreed to partner with them and consult for the American Association of Private Lenders on their behalf and add real value to all my fellow real estate investors.  We service the real estate investor community exclusively and every product and feature has been structured by real estate investors, for real estate investors.  We offer coverage in all 50 states and it is my mission to go out and educate and offer access to all real estate investors to what we do.

I am happy to discuss further with you or anyone and I can even give you a link to one of my pages for more info, I am just not sure if I am allowed to do it here publicly.

Welcome @Joel Craig !

Atlanta is a good market. I have flipped some properties there and also create turn-key rentals for investors.  My other main business is Insurance for investors exclusively, so when you are ready I can also offer some guidance there.  I would also be happy to make recommendations to CPA's & Attorneys I work with that are happy to consult you for free and get you going in the right direction.

There is a lot to navigate as you learn the business so take your time and learn what it is you truly want to do and how passive or active you want to be.  You also have to decide how much of your own time and money you want to invest.

My best!

Ivan

 @Derek Martin although your situation is somewhat unique, it is not an uncommon concern for real estate investors who have multiple properties or projects going at one time, in one or more states and with multiple controlling entities.  There are very few, what you referred to as "real estate investor friendly" agents out there because most are not real estate investors themselves and therefore do not understand the many intricacies of this business and the ones that do, typically do not have access to the right companies and products.  I know this because I was an independent agent for more than 8 years before I got into real estate investing and I had to go outside of my own agency to find appropriate coverage and I was only able to find it with one nationwide agency.

We are real estate investors and every product we have created over the decades is by real estate investors for real estate investors.  The best way I know to answer your question is by letting you know that we can accommodate all of your properties, in any stage of renovation or occupation, include all of your entities as named insureds, add coverage in any state and do it all under 1 simple, monthly reporting policy schedule, managed and billed from one location and free from the need of having to make multiple down payments, multiple policies or location limits.  No one else does what we do so I cannot advise you as to how to have your current agent do it, because I know he cannot.

I am new to these forums so I want to offer as much value, service and assistance as possible but I am not sure how much info I can give publicly, etc.  I'm not sure if I can offer my contact info but I'd be happy to help.

 Thank you Elizabeth!  I look forward to connecting with you and adding value to your investing business.