Off market house tied up in litigation

Real Estate Investor · Longview, TX · Member since 2009 · 111 posts · 28 votes

Hello BP brain trust. I've got a lead on an off market coastal beach house property that the owner wants to sell. The house is a fixer upper from a hurricane last year. I'm being told there's currently litigation going on between private insurance adjuster and the insurance company for the hurricane damage and that they wont be able to sell until after the litigation is complete. But they're open to any loop holes. Does anyone have suggestions how I can buy this property sooner? Any suggestions are appreciated.

Thanks,

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Sergey A. Petrov
Real Estate Consultant · Seattle, WA · Member since 2022 · 1k+ posts · 784 votes
4y
Wouldn’t you want the litigation to be resolved so the owner is paid the insurance proceeds? Or has the owner already received the bulk of the proceeds and the litigation is over the remainder? If paid, those should go towards the repairs. Can’t really collect on insurance, do nothing with the damages and then sell as is…
There is probably more to this than what is in the original post, but in some cases insurance proceeds / claim can be assigned to the buyer and a bond can be purchased to wrap around the active litigation. May or may not be worth the hassle on a wholesale deal…
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Rod HanksBusiness Member
Insurance Agent · Dallas, TX · Member since 2013 · 743 posts · 462 votes
4y
Quote from @Nick Dunin:

Hello BP brain trust. I've got a lead on an off market coastal beach house property that the owner wants to sell. The house is a fixer upper from a hurricane last year. I'm being told there's currently litigation going on between private insurance adjuster and the insurance company for the hurricane damage and that they wont be able to sell until after the litigation is complete. But they're open to any loop holes. Does anyone have suggestions how I can buy this property sooner? Any suggestions are appreciated.
Thanks,
ND
The seller can accept whatever the insurance company is offering for damages and sell the house as is.
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Nick Dunin
OP
Real Estate Investor · Longview, TX · Member since 2009 · 111 posts · 28 votes
4y
Quote from @Sergey A. Petrov:

Wouldn’t you want the litigation to be resolved so the owner is paid the insurance proceeds? Or has the owner already received the bulk of the proceeds and the litigation is over the remainder? If paid, those should go towards the repairs. Can’t really collect on insurance, do nothing with the damages and then sell as is…
There is probably more to this than what is in the original post, but in some cases insurance proceeds / claim can be assigned to the buyer and a bond can be purchased to wrap around the active litigation. May or may not be worth the hassle on a wholesale deal…
I was under the assumption that they could just pocket the money. The price we’ve discussed reflects seller not doing any rehab.
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Nick Dunin
OP
Real Estate Investor · Longview, TX · Member since 2009 · 111 posts · 28 votes
4y
Quote from @Rod Hanks:

Quote from @Nick Dunin:

Hello BP brain trust. I've got a lead on an off market coastal beach house property that the owner wants to sell. The house is a fixer upper from a hurricane last year. I'm being told there's currently litigation going on between private insurance adjuster and the insurance company for the hurricane damage and that they wont be able to sell until after the litigation is complete. But they're open to any loop holes. Does anyone have suggestions how I can buy this property sooner? Any suggestions are appreciated.
Thanks,
ND
The seller can accept whatever the insurance company is offering for damages and sell the house as is.

That’s what I was thinking as well
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Sergey A. Petrov
Real Estate Consultant · Seattle, WA · Member since 2022 · 1k+ posts · 784 votes
4y
Check with someone who understand insurance in TX. I am not familiar but have seen multiple posts on this forum that TX apparently prohibits keeping insurance proceeds to the point where if your insurance paid $10k and you only spent $8k on repairs, the $2k gap (account for the deductible as well) is not yours to keep… I am sure there is more to it. Check with someone who knows before you get yourself and both the buyer and the seller in trouble with you as an intermediary
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