appartment building insurance

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appartment building insurance

Paul UnderwoodPro Member
Member since 2024 · 4 posts · 0 votes

I am a new investor here in Virginia. We have created a new LLC to invest in multiple family homes for growth and income in Virginia and surrounding areas. I am in negotiations to purchase a 8 unit apartment building and I am having a hard time finding affordable insurance to make this deal profitable. CAN ANYONE POINT ME IN THE RIGHT DIRECTION PLEASE? The building was built in 1949 solid brick apartment, just needs TLC due to deferred maintenance. Does anyone know a good insurance agent that can help? Thanks Paul Underwood

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Alecia LovelessPro Member
Member since 2019 · 3k+ posts · 2k+ votes
1y

@Paul Underwood Part of the expense of the policy comes down to the replacement cost of the building. Or the cost to cover the mortgage. So in a state where buildings are inherently more expensive the insurance is just going to cost more.

I’m in an area with very few natural disasters and my 8 unit runs about $5,000 annually. However the insurance company has deemed it to only be worth around $500K. In reality on the open market I would expect it to be worth closer to $850K. But the insurance company won’t cover that.

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  • Account Closed
    Investor · Toledo-MetroDetroit-Dallas · Member since 2022 · 122 posts · 71 votes
    1y
    Quote from @Paul Underwood:

    I am a new investor here in Virginia. We have created a new LLC to invest in multiple family homes for growth and income in Virginia and surrounding areas. I am in negotiations to purchase a 8 unit apartment building and I am having a hard time finding affordable insurance to make this deal profitable. CAN ANYONE POINT ME IN THE RIGHT DIRECTION PLEASE? The building was built in 1949 solid brick apartment, just needs TLC due to deferred maintenance. Does anyone know a good insurance agent that can help? Thanks Paul Underwood

    @Paul Underwood

    Have you looked into NREIG? Not sure if they do apartment buildings, though, so you'd have to check. They are pretty affordable and actually came through when I made a claim. This was in Toledo and Detroit, though, but I think they are nationwide.

    https://nreig.com/products-overview/rental-property-insuranc...

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  • Owen RosenBusiness Member
    Professional · Clinton Township, MI · Member since 2015 · 689 posts · 260 votes
    1y
    Quote from @Paul Underwood:

    I am a new investor here in Virginia. We have created a new LLC to invest in multiple family homes for growth and income in Virginia and surrounding areas. I am in negotiations to purchase a 8 unit apartment building and I am having a hard time finding affordable insurance to make this deal profitable. CAN ANYONE POINT ME IN THE RIGHT DIRECTION PLEASE? The building was built in 1949 solid brick apartment, just needs TLC due to deferred maintenance. Does anyone know a good insurance agent that can help? Thanks Paul Underwood


     What would you consider affordable?

    What kind of deferred maintenance?

    Royal Oath Insurance Group4.9208 Reviews
    WebsiteView Page
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  • Alecia LovelessPro Member
    Member since 2019 · 3k+ posts · 2k+ votes
    1y

    @Paul Underwood Part of the expense of the policy comes down to the replacement cost of the building. Or the cost to cover the mortgage. So in a state where buildings are inherently more expensive the insurance is just going to cost more.

    I’m in an area with very few natural disasters and my 8 unit runs about $5,000 annually. However the insurance company has deemed it to only be worth around $500K. In reality on the open market I would expect it to be worth closer to $850K. But the insurance company won’t cover that.

    1Reply
  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    1y

    Did you ask the seller who they used for insurance? When you're doing your due diligence did you get from them the T-12 so you could see what they were paying for insurance? 

    7e investments53 Reviews
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