All Forum Posts by: James Krusmark

What I'm saying is the insurance companies dont care if I call it a rooming house, a boarding house, or a brothel. They are telling me that I can not insure an owner occupied single familiy residence with more than two boarders/renters/roommates/tenants.

I can I sure it as a 6 unit apartment building without issue, IF it wasn't owner occupied.

I found a couple of agents that can write a policy that will work, I just want to get all the possible options and choose the best one. 

Can you elaborate on how an LLC could change the status of what I'm doing and make it insurable?

According to the city, its a rooming house. It would be a boarding house if I provided meals. The insurance companies so far have not cared what I call the house. Their main concerns are the number of unrelated people living here, shared facilities, and owner occupancy. I've tried calling it a rooming house, a boarding house, a house share.  I've asked about roommates vs renters. 

I suppose I could go the same route a bed and breakfast would go for insurance. Then I run into the sort term long term rental situation and have to deal with different licensing with the city and the state, and I'm not looking for that kind of tenant turn over.

Thanks Jeff.  Had I known insurance was going to be so difficult, I might have went with a different strategy to get started in real estate investing.

So, Im house hacking.  In August I bought a 6 bedroom house in Tacoma.  My intentions from the get-go were to rent 5 rooms and live in one until my 1 year seasoning period is over, then rent my room and move into the next house hack.  Im finding out that my current insurance is not adequate for this.  In the last 2 days, I have called no less than 20 insurance companies, agent, brokers, etc.  They are all telling me the same thing 'We won't touch it!'.  Im hearing various reasons for not being able to insure it, but the common theme is the amount of tenants (up to 6 at any given time), and the fact that the kitchen and bathrooms are shared.  The fact that I am living here as my primary residence is only complicating things.

It seems like regular homeowners insurance is, for the most part, OK with up to two boarders at a time.  

I don't qualify for a regular landlord policy because I live here and the number of potential unrelated tenants. 

I don't qualify for a commercial policy because each "unit" doesn't have its own kitchen and bathroom.  

I don't qualify for a short term rental policy because my leases are at least 30 days, and for the number of potential unrelated tenants.

I know that I am not the only one using this house hacking strategy, and that somewhere out there in the big blue yonder, there is an agent that can help me.

Since I know it's going to come up... My leases are month to month because the city has different requirements for short term rentals vs long term rentals.  I'm currently looking into the city requirements for short term rentals, but I would like to stick with longer term tenants to minimize turnover.

The one work around that I got from a reputable agent with one of the bigger companies, was to get a regular homeowners policy with higher limits and require renters to get a renters liability policy( which I already do) of at least $500k with me listed as additional insured AND the renter polices need to be with him.  It makes sense and the agent is willing to put it in writing.  I just feel like a policy that is specific to my situation would help me sleep at night.

What change in the RCW are you referring to?

Can anyone reccomend a good CPA in Tacoma? I've called a few, they say they work with landlords, but without using them for a bit, I have no idea who is really on top of their game.

Thanks for the replies. You guys gave me some good things to think about.

As far as the city is concerned, I talked to the landlord-tenant coordinator, the Tacoma Housing Authority, and the Business licensing office. They all said that other than having a rental business license(no local taxes by the way), and meeting code and safety requirements, I'm good to go.

@David Tsedaka Cash for keys is always an option.

I'm very close to having a single family home in Tacoma under contract.  I plan to house hack it by renting out most of the bedrooms.  The home will have communal bathrooms, kitchen, and laundry areas.  I haven't been able to find solid answers on the legalities of renting out a single family home this way.  Does anyone have tips or experience in dealing with the City of Tacoma for this house hack?  

I also welcome any ideas on how to structure the leasing paperwork to account for the fact that multiple strangers will be sharing the bathrooms, kitchen. and the rest of the common areas?