General business insurance needed for Seller Financing Mobile Homes?

Question

Hi everyone,

I'm really trying to learn as much as I can about flipping mobile homes in parks, John Fedro style.  I think his strategy would work for me as a low capital, low risk way to get started in real estate.  I can even see this approach as a full-time gig.

I understand that I would eventually setup an LLC and trusts for each purchase.  My question is if there is some kind of insurance I should have on my business (other than the temporary insurance on the "properties" as I'm holding them)?

I can imagine a situation in which a buyer doesn't keep up with his insurance, the home is destroyed in a fire, and he probably will not continue making his payments.   Is this a legitimate concern?  There may be a million other reasons why I might need some kind of business umbrella policy as well.

I usually analyze anything to death before I jump in, so this is just one of many questions I have about the business.

Thanks for any advice you can offer!

Clint Barrett · Answer

Yes, that's kind of what I was thinking - general liability.

By the way, I've watched several of your videos on YouTube.  Thanks for sharing this info!

Rachel H. · Answer

Some do opt for the business general liability insurance as an extra blanket of protection. Most times, it comes down to the types of folks you choose to work with.

Hope that helps!

Clint Barrett · Answer

Ok, that makes sense- basically holding it in escrow ensures that it is paid.

Thanks!

Jared Rogers · Answer

@Clint Barrett Since you only have a DOT on the dwelling it is best (in my opinion) to do it like the banks do for homes.  The bank takes care of the taxes and insurance since they too are concerned about it lapsing.  So I would do it just like them and add on insurance to the P&I payment.  That way you get the funds and pay it yourself upon renewal ensuring it does not lapse.  Among other things you also want to be named on the insurance certificate as the first loss payee in case of damage.