All Forum Posts by: Veronica Giggers

Veronica,

What the lender is probably looking for is a Renovation Builders Risk policy.  That type of policy provides coverage for the existing structure and also for the renovations/additions as they are incorporated.  Many also can cover materials at the site or in transit.  It is usually the type of policy I recommend for a flip or buy & hold that involves renovation.  Once you get your CO, you can move to a Dwelling Fire policy (aka Landlord policy) or vacant dwelling policy depending on when it will be occupied. 

Some things to know on the Renovation Builders Risk policies:

1. Generally the companies will cover the existing structure at Actual Cash Value (ACV).  That is the Replacement Cost (rebuilding cost) less the depreciation

2. some companies issue the policies as "Fully Earned".  Meaning no refund.  Other companies will refund if the policy is done prior to the expiration date.

3. Some policies can have the Liability coverage included while others do not (you will need to get a separate Liability policy)

Good luck on the project and PM me if you have any questions on the above info.

Hey Veronica! I have seen builders insurance on fix and flips before 

@Veronica Giggers

It’s called a builder’s risk policy and on $62,000 of renovation it should not be that expensive, but yes it it more expensive than traditional homeowners insurance

This is very common.

AS stated this is just a builders risk  you have to have those they cover you when your under construction.  

Veronica,

What the lender is probably looking for is a Renovation Builders Risk policy.  That type of policy provides coverage for the existing structure and also for the renovations/additions as they are incorporated.  Many also can cover materials at the site or in transit.  It is usually the type of policy I recommend for a flip or buy & hold that involves renovation.  Once you get your CO, you can move to a Dwelling Fire policy (aka Landlord policy) or vacant dwelling policy depending on when it will be occupied. 

Some things to know on the Renovation Builders Risk policies:

1. Generally the companies will cover the existing structure at Actual Cash Value (ACV).  That is the Replacement Cost (rebuilding cost) less the depreciation

2. some companies issue the policies as "Fully Earned".  Meaning no refund.  Other companies will refund if the policy is done prior to the expiration date.

3. Some policies can have the Liability coverage included while others do not (you will need to get a separate Liability policy)

Good luck on the project and PM me if you have any questions on the above info.

Hi @Veronica Giggers - yes HML should be able to help you, I recommend attending a local real estate meetup to get put in touch with different type of lenders. HML are curbing their borrowing due to current rates, so it might be more fruitful for you to partner with a private lender/partner that may be more open to flexible terms if there's enough meat on the deal.

Hi Veronica, 

Foreclosure properties are great flip opportunities. What are your plans with this potential fix and flip? Are you going to hold and rent? We specialize in these types of loans. Please feel free to PM me with any questions. 
Thanks,