All Forum Posts by: Ryan Zaninovich

Hello everyone,

I'm seeking some information and advice about insuring our rentals. We have a fairly substantial amount of SFRs in our portfolio, many of them lower cost houses in different cities in Michigan. The problem is that these houses are only worth between $25,000 and $50,000 yet the lowest cost insurance I can find is around the $600 to $700/year premium range and that DOESN'T include replacement value. So we are paying $650/year to insure a house that is worth, say, $30,000. Why? Because we want/need liability coverage. To make things even worse, the carrier we are currently insuring with is issuing cancellation letters for various houses based on suspect inspection and findings like roofs etc. I hate that tactic because once they get you to sign the bottom line they go out and cherry pick the best houses that they want to insure. Personally, I think it's unethical.

My question is, can anyone point me in the right direction for an insurance agent/carrier that is better suited for landlords with large portfolios like ours?

And...We would love to take the risk of fire and other issues by self insuring, but we don't want to (and it seems foolish) to self insure the liability portion. I mean, we are willing to self insure the liability up to a certain point but after that point we would like to be covered for any really big issues. I have not been able to find an insurance carrier that is willing to give us an umbrella liability policy without a basic underlying policy on the asset. Is it possible to get a huge umbrella policy on these rentals (and any other areas of our lives) without a basic policy first?

Thanks everyone!

They are covering the original 5 that they ordered. If I successfully win this dispute and get all 4 properties valued at $210,000 then the 2 I paid for will be a drop in the bucket compared to what I gain here. Plus, I got a discount for my 2 because of the fact they are identical properties.

I wanted to give everyone an update. The re-fi company and I agreed that if I felt strongly enough about the value of the properties then we should go ahead with one of the other two identical triplex appraisals from the other appraiser. We just got his appraisal and it came in at $210,000. This means that his other appraisal will also be $210,000 because all 4 properties are identical in every way. 

So, we have the one guy who says they are worth their 4 year old REO price of $165,000 and the other who says $210,000 which is very close to what I think they are actually worth.

I've hired another appraiser to appraise the original two again at my cost. While the UW won't accept her appraisal for this transaction, everyone involved in deciding on if we should toss the $165,000 valuations will at least see them so it should factor into the ultimate decision. I think it will be very hard for them to stick with an extremely questionable appraisal of $165,000 in the face of two different appraisers at a very different valuation of $210,000 (assuming the appraiser I hired will come in at the real value).

I think I'm doing all I can at this point. 

I guess it could be, but there are a whole lot of them if that is the case. I would be surprised. I really think something wonky is going on with my local MLS.

Hi Steven,

I actually hired another appraiser to give me one on those properties for exactly that reason. I know they won't accept her appraisal but at least I can use her approach and numbers as proof of my disputes validity. I will take a look at the cost approach, but he said the rents are in line with the value of $165,000. Each triplex rents for a combined $1900. In my area that does not equate to a property worth $165,000....it did 4 years ago though.

@Ralph. Oh man, don't tell me that. Well, I think I'm doing all I can do right now. Hopefully they won't accept an appraisal based on 4 year old comps. That is straight up ridiculous. For that reason alone they really should do another appraisal. 

I agree, these appraisers can be way too powerful. I've been doing a lot of research and have read horror story after horror story. It's been a decade since the melt down and these appraisers are still tip toeing around as if it happened yesterday. Just seems like there should be a more uniform set of rules to go by and some kind of contingency for when something like what is happening to me happens.

Thanks for the replies guys. 

I didn't think about giving the next appraiser my dispute letter where I lay out all the issues point by point, offer a solution and even listed 5 comps for consideration. I wasn't sure how much contact I could have with the appraisers but I assumed it was close to zero. I know who the next appraiser is. Should I tell them to go ahead with the next appraisal and contact the guy to let him know what happened? Maybe call him to offer an apology for the inconvenience and then do the whole and 'by the way' thing? The first appraiser was from out of town, around 4 hours away and from a completely different environment. The second guy is local and I think he will understand the market better and be more willing to use the nearby community comps somehow. 

Also not a bad idea to sell one to create my own comp. I guess I don't want to break up my nice little 12 unit thing I have going on there. The terms, otherwise, are fantastic. Great price/rates. I hate to let this one go and start over. 

They are certainly making it sound as though once an appraisal has been done there is next to nothing they can do to make it go away or change it short of the appraiser himself offering up revaluation (and I get the feeling these appraisers don't like to admit they are wrong or did a piss poor job). That is why they are reluctant to let the next appraisal happen without figuring something out. They are worried they are going to lose all 4 deals when I tell them to pound sand at $165,000. 

Hello everyone,

We are doing a refi on 4 identical triplexes. The company hired two appraisers to do the valuations, two triplexes for each appraiser. The triplexes are located in a small, sort of, isolated community so the first appraiser could find no comps. In fact, the only comps he could find were the other two triplexes we own. So he went back 4 years ago to our purchase transaction and simply used that value which was $165,000. 

Is this okay to use 4 year old comps and the same (sister) properties that he is appraising? Also, these were verified REO purchases but he didn't even mention that in his report. So he didn't provide for them being purchased as REOs and he didn't provide any appreciation for the 4 years since we purchased the properties (and there has been A LOT of appreciation in this County the last 4 years).

Before we set about doing a refi  we had listed these properties at $240,000 and had interest at $215,000 which we declined. We lowered them to $225,000 and had more interest at $210,000. At this point we realized we weren't going to get what we wanted so after two months we pulled the listing to refinance. We asked for $210,000 thinking it would be a fairly easy target...and then this appraisal comes in at $165,000. 

So I'm super frustrated here. I told the refi company that the appraisal should straight up be stricken from the record and it should be reappraised. We are currently in dispute. I made the case that instead of going back 4 years because of no comps the appraiser should increase the geographical area to include a very similar nearby community with plenty of multi family comps (which also happens to show that I am correct and at the lowest they should be valued at $210,000.) They put the other two units appraisals on hold because they are worried the other appraiser will make a similar mistake and we will be stuck with all 4 being appraised way under value because these appraisers can't seem to value a property without comps. They all seem to agree with us and are pushing this up the chain of command to try and get someone with more authority to make a decision.

Has anyone else dealt with something like this? Any advice on how I should proceed? Are we simply screwed because of one bad appraiser who doesn't know how to do his job?

Hi Everyone,

I'm looking for comps to get an idea of what one of my appraisals may come in at and I found 5 good ones. Here's the thing, I used Zillow's recently sold feature to look for them because they have a really easy interface/map system, but when I later plugged those properties into my MLS they didn't show up as ever being sold or even listed. To make it even stranger, I found the same properties with the same sold information all over the other sites such as realtor.com, trulia etc etc. Basically, they are everywhere except the MLS. I'm pretty certain these properties did in fact sell and for some reason the records on my local MLS are incomplete or something. Anyone know what could be causing this discrepancy?

Hello everyone,

I'm looking for a quote from a  lender who can do a cash out refi on 4 triplexes. Each triplex is a separate loan. They are each valued at $210,000. I have owned them 3 years, they were built in 2008 and owe $84,000 on each. They were just taken off the market. Looking for both 15 year and 30 year options. I have 8 mortgages including these 4 so the mortgage count would not go above 8. My credit is around 770 and I live in and the properties are in California.

Looking to get quotes ASAP so if you have a product and are interested in quoting please let me know. You can also just send me a quote as I have listed all the required information to do so in this ad. Thanks!