Insurance or protection for fix and flipper

Insurance or protection for fix and flipper

Rental Property Investor · San Francisco, CA · Member since 2020 · 78 posts · 23 votes

Flippers and California flippers — how do you protect yourself after the sale?

Since buyers can sue years later for nondisclosure, I’m curious what investors actually do in practice:

• LLC structure — one per property or umbrella?

• Any insurance that protects AFTER closing (completed ops, E&O, etc.)?

• How long do you assume liability exposure lasts?

• Do pre-listing inspections and documentation really help?

• What protects personal assets if a claim happens?

Looking for real-world experiences, not legal advice. Thanks

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  • Peter MckernanBusiness Member
    Residential Real Estate Agent · Irvine, CA · Member since 2013 · 2k+ posts · 1k+ votes
    7mo

    You really should just disclose everything upfront, use a licensed agent due to the broker having E&O insurance. The people can come back for anything within any time if it is something they found out that should have been disclosed to them by the seller (I.e. foundation issue, or pool leak etc.). Just tell them all the stuff you know. I would not waste you time with pre-inspection, just share all inspections that have been done on the place even if it was an escrow that fell out and they shared the inspection (this is to CYA). Any termite reports, sewer reports and all, share it.. Old disclosures from the prior owner that you bought it from 3 months ago, share those, and HOA docs/demands. Share it all, if it falls out due to something in that it is what it is, you would rather fallout verse covering up one small thing and then getting sued 2 years later and nothing covering you.

    Oh and yes, LLC is always good for flipping.

    The McKernan Group4.957 Reviews
  • Rental Property Investor · San Francisco, CA · Member since 2020 · 78 posts · 23 votes
    7mo

    @Peter Mckernan Thank you. This was helpful.

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