Hi all, I'm looking at a Subject To deal at the moment in TX and one question I have is whether or not you typically need to change the home insurance policy when the property is subsequently occupied by someone who has a rental agreement and lease option.

Remember to confirm that you can get insurance on it (lots of redlisted areas) and how bad the property taxes will be with no exemption.Forget the "benefits of leverage" angle.

This is what it looks like.6plex Sales Price $325,000 Loan Amount $260,000 Interest Rate 7.125%Term in Years 30Loan to Value 80.00%P & I $1,751.67(This loan is through an Alaska housing program for which both this property and I qualify for.)Total Rental Income $57,600 Less Vacancy 10.00% -$5,760Adjusted Gross Income $51,840EXPENSESTaxes $4,584 Insurance $2,580 Utilities including Refuse/Cable $9,661 Management $4,725 Maintenance & Repairs $1,000 Replacement Reserves $1,800 Miscellaneous $1,000 Total Expenses $25,350 Net Operating Income $26,490 Total P & I $21,020 Net Cash Flow $5,470 = $455 per monthI know that the cash flow doesn't look that great with the property management cost but it is required to be factored in for this program.

But I am fairly certain that if you buy a house where you can pay 50% of the rent in expenses, and then pay your P&I payment (note that the taxes and insurance often included in the payment are actually expenses), and then have money left over you're likely to do OK in the rental business.My take on the long term picture is that over time rents and expenses are going to go up.

When I have an LLC what kind of extra insurance will I need?

This is why it is often hard to get "title insurance" necessary to build anything or even sell the property for XXX number of years after purchasing the property.

I saved a lot of money on my car insurance from Geico.com!

Also us that method for identifying the real estate attorney, insurance and real estate agent (s).

To the OP: Double closings aren't illegal, and title companies will still insure such transactions.

Add on taxes, insurance (this is hurricane territory, remember, and certainly in a flood zone, too), maintenance (they may have built roads and houses but this is ultimately a swamp), and property management (typically 10%, plus more everytime you have a vacancy), and you're certainly looking at close to two grand a month.