All Forum Posts by: Brandon Cao

@Steve Babiak Thanks for your suggestion Steve! I called Mike Mumma and he politely explained my options. He was very unbiased and provided arguments on both sides of either filing a claim vs. hiring a handyman and absorbing the cost. Here's a couple reasons why I won't be filing a claim in case those of you are curious:

1.) Insurance doesn't cover what wasn't there, i.e. if you had no insulation in the first place, they will not cover putting any in

2.) Believe I can hire handyman to repair for slightly more than my deductible

Side Note: Consider getting a Law & Ordinance part of your insurance might help cover any changing laws for your state and city. If there was a peril that causes damage to your property, you might be able to use some of the funds to get your property back to code if the uncoded part was damaged. Insulation obviously in my circumstance are not code, just an FYI for others. YMMV. Thanks everyone!

Hi Everyone, thanks for the responses. I do appreciate the healthy debate between contacting insurance vs. eating the cost. Makes me realize that everything is not black and white, but there is that grey area.

@Steve Babiak Thanks for your reference to Mike Mumma, I'll have to look into him if I do decide to go Public Adjuster. As for the P-trap, I know where the "blockage" or frozen part was not near the P-trap of the sink. Rather it seems that it was maybe 20 - 30 ft into the line within the walls. The strange thing is that it doesn't affect the 1st floor tenants drainage either. I always thought that they placed traps only at the fixtures, but this house is over a 100 years old. Is it possible they placed traps at the end of a 4" waste stack?

@Ed O. I've been reading some of the other forum posts and I agree it seems risky to me IMO to bring in the insurer. Other members were describing how it was difficult to get another property insured after 2 claims within 5 years. That being said I have zero claims right now and also a no-claims discount from the insurance company and I don't want my premiums to rise. Hiring a handyman to handle the job is seeming to be the next best resort. He would do the ripping out of the drywall, possibly insulating the drain pipes if they were in fact frozen. If the pitch or trap was in the wrong place I would hire a plumber to alleviate that situation first before insulating, then have the handyman patch up the drywall.

@Account Closed It's interesting that you mention that the previous owner would be responsible if there were prior claims. This property was the product of a flipper, however, I'm don't believe he actually updated any of the insulation or any plumbing on this side of the house. I may decide to either eat the cost with a handyman or contact my own insurance to keep it simple on my end.

Hi Guys,

Polar Vortex just rolled through [9 degrees with RealFeel -5 degrees] and may have resulted in a clogged drain line (possibly frozen?). The leak went through the 2nd floor tenant's floor, dripped down to the 1st floor and created water seeping along the path of least resistance (i.e. the part that separates the giant drywall pieces). This then dripped on the floor of the 1st floor tenant and into the ceiling of the basement. I'm concerned about the level of insulation (or lack thereof) in the house and may require pipe insulation/house insulation in a four story home. Also, not sure why a drain line would freeze either unless the original builder of 1912 didn't put a proper pitch in the waste line. So that might need to be replaced. I receive a call later from a public adjuster telling me all the pros of filing the claim through his company, should I go to insurance (Allstate) with public adjuster or eat the cost and that of the insulation project? Also, would this increase my premium or ability to get insurance for future properties? Thanks!

Hey Troy,

I can't help you with no-haggle locations but maybe pricing. Mattresses are a tough spot, I ended up going to my local Sleepy's dealer, but you're right I had to negotiate to drop the price of my bed $350 dollars.

Here's the Deal that occurred 4 years ago:

Product: Queen Sleep Series 400 with split-box frame

MSRP: ~$1800

Negotiate $350 off, 2 free 1 <3 My Pillow pillows, pack of sheets. Obviously they "need" to make a call to their manager to get the special code that gives them the discount.

I think it came somewhere around $1650 after tax + shipping.

Good Luck

@Amy C. , I've used ValueGuard in Philadelphia to perform a house inspection on my main triplex. The guy I ended up with used to be a flipper with over 70+ flips so his advice was pretty helpful. I would recommend them if you are planning on living in the property since they tend to be very critical of minor/major issues to give you the best negotiating power. That being said, if you are doing an investment property for as-is condition, they may or may not be helpful. Also I believe they have an adequate amount of knowledge of plumbing and electrical, but obviously not as much as a standalone licensed electrician/plumber.

@Roberto Lobrace My girlfriend and I live in Germantown of Philadelphia. I'm a real estate investor with a couple properties. Definitely would be good to know more REIs in the area and to meet up with others!

Hi Shree,

Make sure you have a business privilege license and get a tax account number before you apply for the rental license. But no, the City does not send out an inspector to your house to make sure its up to code. You will later print out and sign a Certificate of Rental Suitability that is essentially an affadavit stating that your property is suitable for occupancy. The City of Philadelphia barely has enough resources to give you are rental license, let alone send out an inspector to check your property. But do make sure your property is up to code!

Also, I would highly suggest that you go in person with your application to the Municipal Building in Center City, it will take over 5 weeks if you mail it through snail mail. They take care of it that day if you go in person, assuming your house in question is zoned correctly... Unlikely the property I purchased in June that apparently had "2 units and a Sandwich shop" when it in actuality was a duplex.

Good Luck and ask more questions if you want!

Hi Ryan,

This sounds like a perfect opportunity for you to invest in an owner-occupied Duplex, triplex, or quadraplex. Seems like you want the benefit of having a rental and a residence, why not combine the both and pay off your mortgage yourself in the process.

My first property I bought was an investment property while I was still renting. It was a good decision at the time, but the next property I bought was an owner occupied triplex. I love it.

-Brandon

Definitely a good point Steve Babiak. Personally, it kind of goes back to the recent discussion that Brandon Turner had about seeming like the property manager rather than the owner. Also, if the tenant believes that a business is managing the company, I feel some part of them may think that they could hire big time lawyers if rent isn't paid or take them to court.

Thanks for the advice on the single member LLC, you've made me realize this really isn't much different than owning it myself. Thanks Steve!

Steve Babiak
Thanks, I almost forgot about the transfer tax. I heard that some banks can write out your LLC name as the deed owner, but then have the loan in the personal name [portfolio loan]. In this manner you would be forgoing the building up credit phase of the LLC. I assume this would protect the property from lawsuits and still get you the mortgage. If this at all is correct, I will most likely do that on my next investment purchase. Although for the short term, I will definitely get the umbrella policy!

Mehran Kamari
In the near term future, I will go with Steve's solution regarding the high umbrella insurance coverage. Seems to make the most sense at least when my net worth and equity is low!

Thanks for everyone's opinions!