Podcast 70 - Insurance
I recently had attempted to connect with you on Biggerpockets.com. I had a question for Grant on the podcast 70 or anyone that could explain my question. I recently had met with an attorney regarding a business plan that was based upon the business is some regard. I am in San Antonio and just picked up house to flip - It's 70K renovation which I am accustomed to being in the construction business for many years. My attorney had sent this to me:
I am working with a wrap-seller/lender right now on trying to fix a mess: 1. Property is in buyer’s name and seller still carries the insurance so if there is a total loss lender gets paid off and neither, seller/wrap lender gets nothing, and buyer gets nothing. Can’t get seller to understand. 2. Buyer did not pay the taxes one year or paid late, so underlying lender imposed tax escrow. So now the seller/wrap lender is paying the taxes and has to chase the buyer every year to get reimbursed. So seller is now paying more on the payment than the buyer pays her. 3. Now flood insurance is required and buyer will not pay it.It appears to me that the deal was not structured properly, but the question still comes up on how the wrap buyer can get insurance since it's insured by the original mortgagee. Insurance companies are aware how the property is insured due to the technology. I don't see how it can be doubled down on insurance to protect the new buyer.
Anyway if you could lend some insight it would be really be appreciated.Mike Jones