All Forum Posts by: Tom Harkins

@Jacob Beg Some pitfalls are the amount of work it took to be thorough (it was like having another full-time job at points), and potentially missing things that a public adjuster would catch. I also chose to hire a contractor who specialized in insurance restorations. They used the exact same estimation software for construction labor & materials as my insurance, and got together to agree on the scope before work started. Because of their experience, I was able to get parts of the work covered under code upgrades for things that I did not build back exactly as they were before the claim (e.g. moving plumbing to expand a bathroom).

At the end of the day, no one is going to care more about your property than you. I personally wasn’t comfortable handing over the management of the claim process to someone else. I also rented nearby and could be at the property frequently. Given that you are out of state and your adjuster is playing hardball (mine didn't), it may make sense to interview a few public adjusters and see if their cost is worth what they can provide in your situation.

@Felipe Ocampo Reference this thread, I had the same question: https://www.biggerpockets.com/...

It is up to you to pay the 1.5% interest rate. I use a Bank of America savings account, just so it earns more than 0%.

@Marko Boricich @Alex Talcott  Another Notre Dame grad here. I’m in the market for a short term rental near campus. Let’s connect!

@Caleb Mitchum 

1. 1.  If the insurance company didn’t mention this already, the lease will most likely be a shorter term than you are expecting. It is determined by the construction timeline to rebuild the family's home. Probably 6 or 9 months, depending on how bad the fire was. Because of this, as you noted they offer a rent premium.
2. 2. The family signs the lease and is responsible for maintaining the condition of the property (and abiding by all other lease terms), but the insurance company pays rent directly to you. They usually handle the security deposit as well, so if anything gets damaged you will work with the insurance company, and they will later square up with the family for any damages they caused.
3. 3. Yes, the family should fill out the exact same application that any tenant would, and meet all your minimum criteria to qualify (credit score, evictions, background check, etc)

One minor point - you referred to the insurance company throughout your post, but from my experience it is likely not the insurance company directly, but a 3rd party relocation services company, who contacted you and will be your interface through the process (should you decide to go this route).

Lastly, I recommend having a conversation with the insurance company and the family about how you will handle a situation where the renovation schedule runs long, since that is what usually happens. Relocation services companies make their money by eeking every last dollar out of the family’s Loss of Use coverage limit. Between the rent premium they’re paying you, the family's furniture rental, their fees, etc the family may have very little insurance money left at the end of the agreed lease term. In that situation, the family would have to decide whether to continue living in your property and paying the rent premium out of their own pocket, or finding another place to live. 2 difficult options, and you'll be in the middle. I had that conversation up front before stress ran high and it was too late, and was glad I did.

Best of luck!

@Scott Greenberg I did the same thing - converted our first house into a rental, and have been self-managing it for the past couple years.

Montgomery County provides a template lease here: https://montgomerycountymd.gov...

The office of landlord-tenant affairs is also good resource: https://montgomerycountymd.gov...

You'll also need to get a lead inspection and register through MDE if the house was built before 1978: https://mde.maryland.gov/progr...

@Laleh Omaraie The other condition which would force repayment is selling the house. I assume this is standard practice, since MAFCU did the same thing- $0 closing costs unless the HELOC is closed within 3 years.

@Slaiman Atayee I'm sorry that Tower FCU strung you along for 3 months only to reject you for a question you probably answered on the initial intake application. That's a big breakdown in their process.

Thanks for sharing this information though. I was suspicious of the intent behind that question ("What do you plan to use the HELOC for?"). On my HELOCs, I answered it as generically as possible, or put Other. They don't need to know what I plan to use it for, not to mention the answer will change over time.

@Travelle Mason I second @Jack Seiden. Montgomery County provides a boilerplate lease - check if you need anything different in Rockville. Self-managing also allows gives you control of screening the tenants. I used Cozy which was acquired by Apartments.com for free.

If you want to interview PM's, check out Goldberg and Streamline. I had good impressions of both when I was considering hiring someone, but ultimately decided to self-manage my rental in Silver Spring.

@Steffany Kluttz Udemy has some good stuff - search on Real Estate Financial Modeling, some of them start with super basics in Excel, all the way up to building an advanced UW model from scratch.

@Patrick Thomas Dickinson Here are some options that helped me: Enroll in an online courses that focuses on underwriting commercial RE deals, some start with super Excel basics. Join underwriting-focused Zoom calls/meetups, and network with people focused on the same thing you are. Read underwriting-focused books, in particular I recommend Rob Beardsley's.