I believe it tends to give me a slightly lower return, because the sponsor is going to be more careful, and if there is a severe downturn will prevent me from taking catastrophic losses.

@Jacob Shumate the purpose of insurance is to save you if something catastrophic happens.

Greetings BP family,I anticipate my amateur story will bring harsh criticism, but I really need some help before the situation snowballs into catastrophe.

It is impossible to predict changing times, structure conditions, insurance costs and local catastrophic abnormalities that can occur.

I don’t believe I can collect enough of a premium for the 1/20 probability of catastrophic $1000+ problem like a dog ripping apart the sofa.

Moreover, the catastrophes these types of properties produce aren't worth any amount of cashflow.6. 

I also have a $175,000 line of credit at the ready if something catastrophic happened.

Finally, the relationship you keep with your property manager will define your ultimate success...my clients all know that if they have a catastrophic loss, a lawsuit, or most recently a lead paint exposure report from the local health department we will work together to resolve the issue professionally and ethically.

When it relates to catastrophic weather event (wind, hail, etc.)

I don't know if that's the best formula, but it's enough that I could pay for about any $5k unplanned emergency at any of my 4 units, plus a couple months of the full mortgage without any rents being collected.I do have access to other money of mine if an even larger catastrophe came up, but the 6 months is what I keep on-hand, at the ready, for those two properties.