All Forum Posts by: Kim Hopkins

As it so happens, we are asking for a seller discount, but do need insurance prior to close regardless. The current carrier said they reassessed b/c it's a new acquisition and declined. Many carriers are doing this as I know you're aware.

@Jason Bott Do you want to try on this one with us? We are working with two other brokers, full disclosure, but we are still looking for a new broker in general for our book of business. 

 Thanks. Yes that's exactly what we're doing. But we're literally being declined by them all. What do owners do who have pubs as tenants? 

Hello!

We're in contract to purchase a 20k sf retail center in Phoenix, built in 1976. It has 17 tenants, average 1,000 SF units. LL did major renovations - roof, some electrical, HVAC, store fronts, parking lot. The building is not sprinklered. 

We cannot get property insurance! Our insurance broker has been declined by ALL carriers b/c of either the pub or the age of the building. Everyone is citing a reduced appetite for properties over 30 years old. They all say it's a big issue as well that the building is not sprinklered. 

Does anyone have a referral for an insurance broker that specializes in finding standard carriers to insure this property type? 

Thank you!

Kim

 What kind of vendors are you talking about? I think most of what I post is aimed towards other experienced real estate investors but would be happy to have "vendors" to go to offline if such existed... 

LOL! @Greg Downey Well, I owe you all a drink, and my lawyer a nice $525 or whatever for the hour we wasted discussing this. According to the lender, they have no idea why it's an option to put an LLC as a guarantor and they've never had it approved. What a rabbit hole!

Our broker even said something about this being worse than personally guaranteeing because you would be essentially cross-collateralizing the properties. 

Back to signing over our house and our first born. J/k. I know they can't take the house. ;) 

It's a full recourse loan but apparently an LLC can sometimes be the guarantor. Not the borrowing entity LLC.

FYI, we put this in the LOI and they signed without issue. I think a good broker will respect that a signed LOI means the offer should not be shopped provided all parties reasonably work diligently and quickly to arrive at a signed agreement. We're in contract now so all good. Thanks all!

Thanks all! We negotiated that we could refinance this property with this lender directly (no broker fee) but any other work (including with this lender) in the next 5 years goes through them. 

Yes, I agree we will likely go back to the broker to refinance anyways but this provides for the scenario when rates across the board are dramatically lower, in which case we can refinance with this lender hopefully easily with minimal fees. 

Either way, we intend to give this broker lots of business and I think this is a fair resolution for both. 

Thanks all!

Hello!

We are working with a credit union on a loan for a commercial property acquisition. The loan is full recourse. In the past, we've just listed ourselves as individuals (or maybe our trust, I forget) as the guarantor. 

This time, we noticed there is an option to list an LLC as a guarantor. This seems like it might be advantageous as it might add a layer of protection.

If that's the case, what sort of structure for the LLC would be best? Here's the LLCs we already have:

       • About 15 LLCs that each hold one individual property. I'm sure those are out since they each only have ownership in one property.
       • An asset management LLC that has no interest in any properties. That would be ideal for us but I'm guessing the lender wouldn't allow it since it doesn't have interest in any properties
      • A new holding company LLC but it only has an interest in one smaller property we bought last year (our GP interest). 

Are any of these good candidates? If not, is it worth it to set up a new LLC? Does it actually offer more protection? And if so, what ownership should it have?

Yes I know this is a question for my attorney who I've already asked, but he just said "generally the lender will want to see assets in the LLC" so I'm looking for answers here from experienced investors and their best practices. No, I do not consider this legal advice.

Thank you!

Kim