All Forum Posts by: Chris Long

@Josh Copeland both North and South Hampton neighborhoods face an obsticle in the lack of proximity to a major interstate (64, 44 and 270) and unlike Tower Grove which has seen significant increases in property value due to substantial commercial redevelopment property prices are relatively flat. I would not expect any material increases in property value from these investments so would require a higher cap rate than alot of neighboring areas. 

 I am a huge can of the area you are talking about. It is great for those commuting to St. Charles County (fastest growing area in the region), the expansion of Westport Plaza has reinvigortated the nightlife in the area and the new World Wide Technologies headquarters is going to be great for the region.  Convienant access to major job centers and a much lower price point than suburbs directly to the south make it very attractive to renters and great for cash flow.  I have three thoughts I think anyone investing in this area should consider. 

1.  Proximity to highway 70 and 270 has a huge impact on demand and large effect on rental rates/home prices. 

2. Part of Maryland Heights and the unincorporated areas surrounding it are in the Parkway School District which is signifcantly better than Pattonville making this the most attractive place for flips in my opinion.

3. St. Ann has safe, well maintained great areas. There is a high crime section 8 type neighborhood within a few blocks of all of the good neighborhoods and knowing the area is super important. Comparable sales in the area can be very misleading unless you know the area. 

I am surprised how confused people on this forum are regarding LLCs and personal umbrella policies. If a random person slips and falls on property owned in your name personal umbrella proves coverage and if the llc is an additional insured on the umbrella there is coverage if the llc is named in that suit. However, personal umbrellas Exclude business activities meaning a claim resulting from your operation of a rental property (negligence in maintaining rental property or failure to do background check) is not covered if the property is in your personal name or an llc. 

If commercial insurance is not purchased for the llc (property worth $1 million) and the plaintiff wins a $1 million judgement he can take ownership of the property as compensation and you lose that revenue stream. Commercials liability insurance for the llc of $1 million would cover that judgement allowing you to keep the property. A commercial umbrella provides additional protection in case of judgements greater than $1 million and can cover losses from other properties in the LLC. Large commercial umbrellas make sense if they are protecting your primary source of income but at some point insuring a rental property for 5x the value of the llc gets silly and the likelihood of that kind of judgement in the absence of criminal activity is very unlikely.

To conclude, personal umbrellas and LLCs are both good risk management tools but they are almost completely unrelated.

I am an insurance broker from St. Louis with apartment investments in the side.