Investor · Saint Louis, MO · Member since 2013 · 198 posts · 25 votes
I just purchased a duplex via a tax sale auction this morning. This is all new to me, but I'm already working closely with a lawyer the specializes in the purchase of real estate at tax auction, etc.
Anyway, while I'm waiting to officially confirm ownership and confirm the title is clear, etc. At what point do I need to get insurance coverage? I've only been able to evaluate the outside of the building and cannot confirm the status of the inside. However, it's safe to assume their will at least be some form of rehab/improvements/maintenance made to the property. I'm assuming it would be prudent to attain some type of liablity insurance coverage so I'm covered with contractors, maintenance workers, etc.
I have been told that you can't make a profit by insuring a property but only make up your loss so I'm guessing that you would insure it for what you have in it. There would be a specific type of policy for property being rehabbed.
What exactly does confirm ownership mean? Did you buy the property, or a lien? I don't know the Missouri process, Any redemption periods? If you have title you want insurance, both for liability and for the asset. If you own it, I'd be inside of it now.
@Wayne Brooks I purchased the property. However, I have to wait for a confrontational court hearing (take about 1 month) to officially take ownership of the property. Then, I have no idea whether the property is occupied or not.
I love to get into the building, but not sure how to approach this??
Did you purchase the actual property or a piece of paper that says you will own the property if it's not redeemed in the next 2 years? If you purchased a tax lien, the property can be redeemed via paying you plus 8% interest. I believe that's the rate here in Mo.
You did say it was a tax sale and not a foreclosure purchase.
@Vince Mayer I purchased the actual property, but from what I've learned you have to go in front of a judge to prove the sale was fair and correct procedure was followed.
I'm prepared to initiate a liability and limited property insurance policy once I take ownership of the property. I'm curious what others recommend on the amount of coverage for liability and the property. Do you just insure what estimated amount of money you'' have in the building or what the buildling would potentially ARV at?
I have been told that you can't make a profit by insuring a property but only make up your loss so I'm guessing that you would insure it for what you have in it. There would be a specific type of policy for property being rehabbed.