I’m curious to hear from private real estate investors who’ve faced unexpected insurance claims and were protected by an umbrella insurance policy.We often see discussions whether investors should use an LLC or an umbrella insurance policy.

They specialize in uncovering all encumbrances and can save you from unexpected surprises.

Set aside reserves for unexpected repairs or vacancies.

Everytime i engage in a product its more unexpected money being required and I just do not like that.Good information.

Its this sharp depreciating component which has always prevented such a purchase.  

It takes the pressure off as deadlines approach and gives you room to solve unexpected issues.

But during the buyer’s due diligence, several unexpected issues surfaced, each cutting deeper into the profit I had worked years to earn.The first issue was with the water lines.

Your clients should focus on properties with significant equity potential and work with experienced contractors to stay within budget and timeline—especially with borrowed funds on the line.Avoiding Bad Deals - Encourage them to work with experienced agents, contractors, or mentors and always run multiple scenarios, including worst-case outcomes, to stress-test their numbers.Reserves - Advise your clients to keep a reserve fund separate from their loan for emergencies, unexpected expenses, or delays.

I just worry about some worst case scenario where a tree falls on the property or the property unexpectedly floods 

Here's the key components to calculate your tax liabilityAdjusted cost basis - Is the purchase price, plus capital improvements, minus depreciation.