All Forum Posts by: Jack Smith

ACV doesn't always come close to market value / purchase price. The price difference sounds great on the front-end, but a payout on a claim could be much less than ideal. Depreciation can certainly get the best of you.

Congratulations on the investment, Allison!

I know that the areas such as Highland Park, Red Bank, East Ridge, and Rossville (GA) are pretty popular areas for investing. What other areas/neighborhoods are prime for investing in Chattanooga? What about neighborhoods in the surrounding counties such as Bradley, Rhea, Catoosa (GA), Walker (GA), etc? 

Would love to hear where you've seen or found success investing!

Bravo. This is impressive. Congratulations on the successful transaction.

I don't think it is fair to write any property off solely based on location. However, Matt is correct that the flood insurance could be pretty steep. You can get your insurance agent to quote the flood insurance to see what you are up against. If this is a hold property, you will want to make sure your "Loss of Rents" coverage is strong since this area is susceptible to flooding. After a flood, you may need to have the tenant relocate while you clean up and repair. 

Speaking on the insurance piece, some insurance carriers will give a discount if you pay for the insurance as opposed to putting it in the Escrow account-- less paperwork for the insurance company. Most will also give you a discount if you pay the insurance yearly. Obviously, this is a total cash-flow decision, but sometimes we are talking about a 10-15% reduction in premium if paid annually.

@Edmund Amoye I would check out the Hixson and Red Bank areas. As Chattanooga grows, these areas are becoming more and more desired.

Hey Snehann,

While it would be super nice to have a rule-of-thumb or quick calculation, insurance can vary so great between properties. Things like fire protection class, age of dwelling, age of roof, construction material, square footage, # of families, and more come into play when determining a final premium.

As Fred said, it is best to establish a relationship with an insurance agent you trust. You can have the agent pull a quick premium indication to see if the deal is worth it after the cost of insurance is factored into the equation.

Jack

I am in full agreement as well. ACV is cheaper, but that is the absolute only benefit of it. 

As far as liability insurance is concerned, I would recommend the highest limits offered. Liability insurance is cheap and it can go a long way towards protecting the financial standing of you and/or your business. 

I would also recommend adding an umbrella on top of this liability limits-- especially as you build a sizable portfolio.