All Forum Posts by: Kevin Hoag

@Account Closed Yes, there is a website that many lending companies use called mycoverageinfo.com this website allows insurance agents to easily see the mortgage documents and add our insurance documents to an individual clients account. Im not sure completely how it works on the lending side but it is not integrated with any insurance platform on our side and requires insurance agents to manually go in to each individual account to upload required documents. If there was a way to get the platform to integrate with the insurance carriers so when the agent binds the business all necessary documents were automatically uploaded and available to the lender this would be a huge help.

@Account Closed As an agent I want to spend all of my energy marketing and quoting. Having to do customer service work or pay someone to do it only cost me time and money. I think one thing that would be great is having a back office system/Lender Portal that allows lenders to log in with client information and the insurance policy number. Give the lender the ability to add their mortgagee clause, loan number, download a dec page and invoice. This is something the lender/loan officer is always going to need for their underwriters to get a refi or new purchase completed. As an insurance agent I want to quote, bind and move on. 

If a new purchase deal has a delay in the closing it would be great to have the flexibility of changing the effective start date without having to create a new policy. Lenders and buyers do not always remember to notify the insurance agent if a deal is delayed by a few weeks and with billing due dates this causes the insurance payment to not get sent out through escrow with enough time to keep a policy from cancelling for non-pay. Lets improve the billing system between insurance carrier and the lender/title company at closing.

I look forward to hearing more about this new company and would love to be on a list to become appointed.
 

@Joel Oh When it comes to insurance companies they are not all created equal and certain companies target specific types of insurance. Even though you may have got quotes with multiple carriers if you did not go to the right insurance carrier that wants to build a landlord book of business you will not be offered the best rates. The more units you have the greater the risks become so the rates do go up. A 3000 sq ft single will always be cheaper than a 3000sq ft 4 unit. If you have a specific questions about a carrier or coverage items let us know. BP family always here to help.

Florida has scene huge rate increases across the board due to many insurance carriers going insolvent and or leaving the state entirely. I know of several individuals who have scene %50+ rate increases yoy with no claims. It it hard to say what the future of insurance will look like in Florida. I would suggest finding an independent agent and taking a look into your options. It never hurts to do a bit of shopping even if you end up not switching companies you will at least have some peace of mind about your rates.

@Chandler Rehbein When it comes to insurance companies they are not all created equal and certain companies target specific types of insurance so while the coverage items may be the same the pricing is far different. You will want to make sure to have several key coverage items. Hopefully this will help you out.

Property coverage - most likely going to be replacement cost coverage

Separate structure coverage - typically built into the policy for detached garages, sheds, barns

Personal Property - typically a low amount $1,000-$5,000

Premises liability - I always recommend maxing this coverage out on your policy

Landlord Personal Injury Liability- This coverage will be equal to you premise liability

Loss of Rents - carriers offer 12 months, 24 months or a specified amount typically 10% of your property coverage (very helpful if you ever have a claim that result in the inability to continue renting out the property for some time)

This is the primary coverage that you will want to make sure that you have. If you have a specific questions about a carrier or coverage item let us know.

@Enrique Villarreal If you work with an independent insurance agent/broker that person should have access to multiple carriers and you wouldn't need to work with several of them. I always recommend finding an insurance agent who specializes in the rental industry. Yes, some independent agents have different access to different carriers but with habitational insurance there are only a handful of carriers that specialize insuring rental properties. The rates will be the same for all agents as that is controlled by the carrier.

I would look into Tower Hill, American Modern, Foremost (single family only effective 10/01/2022) Berkshire Hathaway, and Safeco. They all offer great landlord policies. The big challenge is finding out who is most competitive in your specific area and that is where having one agent who can quote them all is going to be a big help.

Investment Info:

Office Space buy & hold investment.

Purchase price: $640,000
Cash invested: $20,000

I sold off several of my residential properties to purchase a 15unit 15,000 sq ft 100% office space commercial building. The property was 80% occupied when purchased and had many long term tenants in place. The tenant mixture includes and adult daycare, two law firms, tax/accountant, home health care, guidance counselor, and cell phone towers on roof for At&t and T-mobile. I moved in my insurance office to one empty space and rented out the parking lot as well.

What made you interested in investing in this type of deal?

I have done very well in the residential space and wanted to purchase a larger investment that would be a value-add commercial building and allow me to move my insurance office into it. I wanted something that was 100% office space and already cash flowing.

How did you find this deal and how did you negotiate it?

I found the property on the MLS and it had been sitting on the market for almost 500days! I represented myself and worked directly with the seller's agent to put a deal together.

How did you finance this deal?

I got the seller to finance the building with terms of 10% down payment, 15 year balloon payment, amortized at 30 years with a 4% interest rate. Down payment ended up being only 7% after rent and security deposit turn over plus tax prorations.

How did you add value to the deal?

I reduced overhead cost by more than $1250. I was able to get a local brewery and tow truck company to rent out my parking lot as overflow parking creating and additional $475 in gross rent. I then moved my insurance office into the building and pay myself rent at $1200/mnth. Lastly, I rented out one of the 2 empty units for an additional $700/mnth. Will be doing cost segregation for 2022 taxes to receive 150k in depreciation.

What was the outcome?

I couldn't be happier with the building that I purchased. It still needs a lot of work to be done to improve the buildings energy efficiency and reduce overhead cost even more. I have 1 unit that still needs to be rented out and several tenants who are coming up for renewals with price increases. Eventually I will refinance the building and use the surplus cash to purchase another large commercial building.

Lessons learned? Challenges?

I have learned a lot about maintaining an elevator, fire alarm system, public restrooms, boiler system, commercial air conditioners and most of all the different laws for commercial tenants vs residential tenants. This has been a positive change for my portfolio and I look to continue to purchase additional commercial buildings.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I am a licensed real estate agent and insurance agent and represented myself for this deal.

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $64,000
Cash invested: $10,000

4 unit apartment building that has three 1bedroom units and one 2 bedroom unit. Property is a cashflow machine that has had the units and major mechanicals all updated. Any and all repairs/updates have been paid for with collected rents. This was units 10-13 for my portfolio and my third 4unit building.

What made you interested in investing in this type of deal?

large cash flow with low expenses

How did you find this deal and how did you negotiate it?

I found this deal on the MLS and negotiated the deal myself with the sellers real estate agent.

How did you finance this deal?

I purchased this property with cash.

How did you add value to the deal?

I renovated each unit as they were turned over. I also updated 3 out of 4 furnaces and 3 out of 4 hot water tanks. I have done repairs to the siding, windows and roof. All repair/ renovation has been paid for through the collected rents.

What was the outcome?

I currently own the property and I am renting it out as a long term rental. The property is the last building in my residential portfolio and will be sold shortly. It has scene over 100% appreciation since I purchased it.

Lessons learned? Challenges?

This property is located in a much more rough neighborhood than any of my other investments and learning the struggles the tenants have has been a learning curve. I have had to work with tenants and be more forgiving with late rent or allow tenants to make bi-weekly rent payments to be able to collect 100% rent. Work with your tenant before simply going through an eviction.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes, I am a licensed real estate agent and insurance agent and represented myself.

Welcome to the Bigger Pockets Community,

@Valerie Menke I think that the big difference between the short term rental and the long term rental is not just the 30 nights or 12 months time frame. There are many landlords that own long-term rentals but only offer a month to month lease. This provided them the ability to easily remove a bad tenant and not have to suffer for an entire year. You cannot give a tenant a 30-day notice to vacate if they are paying rent and on a 1 year lease. Even though the lease is only for 1 month at a time the idea is that the tenant is moving in long term. In my opinion if you are having a prospect sign a lease then you have a tenant and are looking at a long term rental regardless of the length of the lease. Especially if you do expect a tenant to continuously auto renew the lease. Your intention is not that of a short term rental as you do not sound like you would accept someone to stay for only a week at a time. 

Will you require the renter to purchase renters insurance, sign a lease, go through a tenant screening process? These are all tell tale signs that you are looking for a long term tenant and not providing a short term rental. No one that books through air b n b or verbo purchases renters insurance, signs a lease or goes through a vetting process ahead of time. 

Hope that helps,