All Forum Posts by: Annchen Knodt

Hi BP,

I have a rental that I deeded over to my LLC after getting financing in my personal name (the strategy I've learned here for getting better loan rates/terms). I'm having some trouble now with the home insurance policy, since the insurance company (State Farm) wants the name on the policy to match the deed (my LLC), and the lender wants the name on the policy to match the loan (my name). Apparently using my name plus the LLC as "additional insured" isn't passing through underwriting at the insurance company.

Have others faced this issue, and how have you handled it?

Thanks!

Annchen

I wanted to follow up on this thread since the DTI question is also looming large in my mind right now because I am looking to purchase a personal residence and concerned with how it will affect my ability to qualify for a cash-out refinance on a property I am in the process of BRRR-ing.

I've seen in a couple of places that lenders won't count rental income until after 2 years of the income being reported on your tax return, but @Cameron Tope and @Whitney Hutten, your responses here are encouraging me that it might not be too difficult to get that cash-out refi on this rental after getting a lease in place (even with new debt from this personal residence). The only other debt I have is a rental with a DSCR > 2, but I've had it for less than a year so I'm not sure if it will help or hurt me!

I'll ask my lender of course, but curious to hear any further details of your experiences.

Thanks so much @Maria G.!!! I am still working out the level of coverage I need and what's covered by the HOA. Since your main concern is your appliances, are the other interior elements (flooring, kitchen cabinets and counters, etc) covered by the HOA then?

Hi @Maria G. (and @Matt Moylan and @Rod Hanks), Did you get your questions answered?  I'm finding myself wondering the same things!

Hi @Account Closed, you may also be interested in this post by Andrew Postell on a creative cash-out strategy.  Congrats on getting started and best of luck pursuing your goals!!

@Dawn Young, mine's through Lloyds of London as Robert says.  I ended up finding it through this site: https://nationalfloodinsurance.org/  I had a fantastic experience working with one of their brokers - he got me set up with a plan through a company called Argenia that's backed by Lloyds of London (I guess I don't know exactly how it's all structured, but that's how my experience played out FWIW!)

I also have a Lloyd's of London plan (through a company called Argenia).  My lender (a local credit union) didn't have an issue with it, and it saved me tons of money.  My house is in zone AE and I know that it hasn't flooded for at least the past 25 years, so not sure what the policy would look like for one that's flooded somewhat recently. 

Hi @Cameron Wilson, the triangle area is certainly a great place to live!  And as far as real estate meetups go, Josh Rathbun organizes a BP meetup that was usually the second Wednesday of the month but has been on a hiatus with COVID.  There are plans to start it up again so be sure have alerts set up for Raleigh/Durham etc and check out BP's events page.  You can also check out TREIA and see if any of the programs interest you - I find that some of the subgroups are worth attending.  Hope to see you in NC soon!

Hi @Chad Kiel, @Eddie Brady, and @Mike D'Arrigo,

I'm in the process of deeding a property over to my LLC myself after obtaining conventional financing. One attorney (in Texas) has told me not to worry about the loan being called due at all - investors do this all the time and lenders never seem to care as long as you are paying your mortgage. He reminded me that worst case scenario is that I put the deed back in my name and make sure I have a good umbrella liability policy (I've been convinced that insurance can be sufficient in most cases, see e.g. this post by Matt Faircloth).  I've also heard of plenty of folks who have had no issues getting the ok from their lender to do the deed transfer, so that they can feel more secure about it.

One thing that I'm still not clear on is whether a quit claim deed may be ill-advised in that it can void your title insurance, and should any title issues arise down the line, you'll be on the hook for it.  I think that using a Warranty Deed to transfer the title may solve this but I have yet to confirm that. Would love to hear any thoughts you guys have on that!

Have you looked into private insurance?  I own a rental where flood insurance through the NFIP was a deal breaker, and I was about to go the elevation certificate route (I think the estimates I got for that were ~$500) when I discovered that I could get insured through a private company at a fraction of the cost, and the lender was fine with it.