Most insurance companies now offer some kind of STR coverage.

The best approach is for the HOA to review their insurance policies to see if they have this coverage.

We are using a Debt service coverage ratio (DSCR) loan.Lessons learned?

These loans not only cover the property purchase but also 100% of the renovation costs, allowing you to focus on the project without worrying about securing additional funding.Here’s how our loans work:Loan coverage: We can finance up to 90% of the property purchase price and 100% of the rehab costs.Max ARV (After Repair Value): Depending on your experience level, we offer up to 75% of the ARV, ensuring that your project has strong financial backing.First-time investor friendly: If this is your first fix-and-flip, don’t worry.

You’ll also need owner and lender's title insurance as well as the standard fire and liability coverage, which I assume you already buy.

For this deal, my mother and I secured financing through a Debt Service Coverage Ratio (DSCR) loan, which allowed us to borrow based on the rental income potential of the property.

Unlike DSCR (Debt Service Coverage Ratio) loans for smaller multifamily (i.e. duplexes, fourplexes, etc.) that allow market rents (not actual rents) to help determine if the property covers the mortgage payment, commercial loans look at what is happening today.

And it can change each year.I literally just had a tenant's portion go from ~40% to 100%... that means they completely lost voucher coverage and are on the hook for their entire rent.People don't seem to understand that S8 rents are not guaranteed.

When financing a large-scale fix-and-flip project, assessing and managing risk is crucial for success.Risk Management StrategiesContingency Budgeting:Set aside a contingency fund (typically 10-20% of renovation costs) for unexpected expenses.Time Management:Develop a detailed project timeline to keep renovations on track and avoid extended holding costs.Partnerships:Collaborate with experienced contractors and real estate agents to mitigate risks associated with repairs and market positioning.Insurance:Obtain comprehensive insurance coverage, including builder’s risk insurance and general liability insurance, to protect against unforeseen events.Exit Strategy:Always have an exit strategy.

In my experience the best coverage with the lowest premiums hardly ever come from the big brand name insurance providers like Allstate, Statefarm, Geico, etc.