All Forum Posts by: Jason Bott

@Suhail Shakir I think the question that needs to be asked is what risks is the investment LLC open to and are you comfortable retaining those risks( self insure).

You can do many things to reduce the risk to the investment llc without purchasing more insurance.

1) make sure the construction llc is adds your inv LLC as an Additional Insured. May cost $50 if you do not have a particular endorsement on your policy.

2) require all the subs of the project to add both of your LLC's as additional insureds on their policies.

3) get a good subcontractor agreement in place.  If written correctly, it will put the burden of a claim on the subcontractors insurance policies, no matter who's fault it is.

4) lately, purchase the property and general liability policy for the building you reference.  This policy will be in the investment  llc's name and will cover for slip and falls, fires, etc.

After you put these risk transfer strategies in place, I think you will find not much can touch the investment llc.  Maybe NJ has some goofy construction laws I am not aware of, but that is up to your local agent to advise you on.

@John Cohen your good, won't be an issue

@Stephen Bell @John Cohen  The fire pit and grilling station issue will depend more on the building structure surrounding the area.  Obviously, if this will be on a wood deck and the exterior of the building is frame/wood siding, then it will be an issue.  IF it's on a concrete pad, natural gas fire pit and direct hook up for the BBQ, then it's probably not going to be an issue.

John, since you are starting from scratch, as long as this is contemplated while designing it, you are good to go.  Chances are, by the time the city has their input into the design, there wont be a piece of flammable material with in a 100'.

@Lucas Pfaff Liability claims.  My clients have settled 3 slip and falls claims this year ($25k, $40k & $50k)  And these are properties they are they are actively maintaining.

If you put this property in with other property you may have, it could drive up the insurance cost for the entire policy/LLC.

@Chris Shepard I have to agree with @Brad Chandler and his marketing advice. 

Do you already have a list of 800 landlords?  If not, hopefully my marketing grunt work can help you out. 

I looked for lists of landlords, called list companies and could not find a good list.   All the lists only had class A monster apartment complexes owned by syndicates or private equity.  Not saying you don't want those, but you mentioned older owners looking to relinquish the day to day or the entire property.

So I created a list by having one of my assistants call the top 50 municipalities assessor offices in WI and ask for lists of 4 units or greater.  80% had them, of those, half were free, and the other half was $10 - $75. Every municipality had a different file/spreadsheet (after all, it is the government).  Once we combine the lists, removing duplicates, we researched the entities to get the phone #'s.

I have done a lot of cold calling and have had cold callers work for me over the last 20 years, and that list was one of the most responsive lists we ever used.  Hopefully this gives you some perspective when finalizing your marketing. 

Good luck and Ill be following along. 

@Shayla Fletcher @Robert Leonardknows his stuff!

 For more info, here is a post I put out in regarding the flood updates that are currently taking place from 4/1/2015-4/1/2016. 

https://www.biggerpockets.com/forums/95/topics/174085-if-you-have-or-need-flood-insurance---fema-raising-fees-and-rates-april-1-2015

Keep in mind the increase in fee from $25 to $250 may not show on those units if the flood policy renewal period is between today and March 31 2016.

Also, I use some specialty flood programs that do not charge the $250 fee. This program does not allow SFR or a single condo unit. But, given there are 8 in one building, my underwriter has been able to classify these are apartment units. So, if the units each have a separate flood policy, with the $250 fee totaling $2,000, it's possible to eliminate this cost. No 100%, but possible.

I'll pm you the info.

@Eric D. @Brad T. to make it even better, some insurance policies will have a "other structures" coverage as a throw in on the policy.  So you could already have coverage at no additional cost.  

Also, from a liability stand point, you may need to add this additional exposure to the policy.  But there is a good chance no additional cost here either.

@Eric Hulstrand Welcome to the site!  If any place on the web has answers to your questions, it here on BP.

@Ashley Chris personal umbrella will not go over an LLC. You will need a commercial Umbrella for that.

What is the limit of insurance you are looking for $1m, $2m, $5m?  A personal policy liability limit usually maxes out at $500,000.  Then the personal umbrella will take you to $1m or $1.5m.  A commercial policy can start at $1m, possibly $2m.  You may not need an umbrella:)

There are some insurance companies in AZ that do this.  PM me if you would like specifics.

@Donnie Mac your renters should be looking to get a farm/ranch policy.  They will then have liability for the horses and can add you as an additional insured on to that policy.  A traditional renters policy probably does not cover the horse exposure.