All Forum Posts by: Kevin Hart

Bone Dry Roofing or Citadel Roofing do good work

Yes. general liability is not that expensive for a contractor/handyman to get (at least not in KY). Any decent handyman or contractor will know they can get more jobs by having liability insurance so they are pretty willing to get it, especially if you are sending them repeat business. Make a connection with a local insurance agent so you can get a general idea of what a general liability policy would cost, that way you can send your handyman to that agent to get covered for your job if they are not already. You can be added as an additional insured so you are notified if the policy is cancelled. 

My biggest concern when working with my clients is, lawsuits are typically not planned, but come out of opportunity. Better to protect yourself early before you hire the wrong guy and he takes you for all your worth. 

Workers Comp will depend more on what your state law is. That is more expensive than general liability. 

I would make any tenant get their own renter's insurance, but those with a dog especially, make them have at least 500k of liability on their renters insurance. That will cover any liability from a dog. (there isn't any general pet liability, at least not in my state, it is included in renter's insurance)

I would hope you have a rental dwelling insurance policy on your rental already, but if not, go get one asap. Get a policy with at least 1Million of liability that way you are protected against lawsuits.

@David Heath agree with Sean above. most companies offer it, but for sure check with an Indiana agent in your area

Hey BP’ers.

I’ve seen a lot of folks asking questions about insurance on your rentals. I’ve put together a simple Insurance 101 for any newbies looking for answers. As a State Farm Agent in Louisville, KY, I have worked with a good amount of investors, as I work towards becoming an investor myself.

(Disclaimer: Insurance varies state-to-state. For detailed coverage information talk to an insurance agent in your state. Coverage can also vary by company. I am only covering the general coverage’s that should be fairly uniform on every rental dwelling policy)

The Rental Dwelling Policy (or Landlord’s Policy) includes the following coverage’s:

• 1.Dwelling Coverage - To pay for covered repairs or reconstruction of the dwelling. This coverage insures the dwelling and other structures on the property, such as:

Garages, Swimming pools, Fences, Storage buildings, Flooring, Roofing

Mortgage companies will typically require you to have at least enough dwelling coverage to cover the mortgage amount. I would always recommend going with the full replacement cost so that if it burns to the ground you can actually rebuild.

• 2.Personal Property Coverage – Covers any personal property you furnish for a tenant or store at the property. This may include landscaping equipment you keep at the property, kitchen appliances, washer/dryers, and other furniture you purchased and store at the property.
• 3.Loss of Rents Coverage - To reimburse the owner for rental income lost if the rental dwelling is damaged by a covered loss and cannot be rented. ***Very Important if you are living off the cash flow of a property***
• 4.Liability Coverage - ***Very important*** This covers your legal liability for accidental bodily injury, personal injury or property damage resulting from the ownership, use or maintenance of the insured premises. Coverage may also include the cost of legal defense. We live in a sue happy world. Real Estate Investors are easy targets for lawsuits. I always recommend at least 1 Million in liability coverage.

I often see the debate about whether to have properties in your personal name or an LLC. Regardless of which route you choose, Liability insurance is the only thing that will actually pay on your behalf so that you don't have to liquidate your hard earned assets to pay off a lawsuit. If you still have questions about LLC's, talk to an attorney. If you can't afford an attorney, there are monthly legal subscriptions (like Legal Shield that I use) that give you access to attorneys 24/7 for a monthly subscription fee.

Again, these are the 4 primary coverage’s you should have on your rental dwelling policy. There are many other more detailed coverage’s you can have but those vary by company and by state so I will not dive into those.

whatever you decide, talk to your insurance agent about getting a commercial liability umbrella if you don't have one already. Any real estate investor should have one. You can get a personal liability umbrella as well. at a minimum, it gives you an additional 1 million of liability coverage for your business or personally (coverage can be much higher as well depending on the amount of assets you have to protect). one bad lawsuit can take you down either way, just make sure you have the liability protection to cover it. 

@Bradley Davis hey Bradley, I can help you out through State Farm Bank. ill DM you

@Michael Seeker mainly south end. there have been a couple I looked at in clifton and 1 in jtown.

Im interested in the west end but I don't know enough about the area yet to tackle that without a partner who is experienced over there

For investors that have purchased apartments in Louisville, 10 units or more, what has been the safe/conservative numbers you use when you complete your first quick analysis of the deal? (see below). I understand I would need to true-up my numbers once I do my full due diligence. 

cap rate?

repairs & Maintenance?

Cap X? 

Vacancy? 

management fees?

Annual Income growth?

Annual PV growth?

Annual Expense growth?

welcome @Chris Felts! the BP community is awesome!