All Forum Posts by: Derek Lacy

If she moves it and as result avoids paying a creditor the transaction was not arms length (meaning gave her the same cash as any other transfer). Yep the transfer is full game to be reversed. Now she sells the house for full market value, then that’s a different story, but a judge will reverse transfer to a trust or LLC. Now what’s tricky is that it depends on the homestead exemption in your state. In FL, they cannot touch your personal residence. But in IN they can take everything but $2,500. A lawyer will be pennies on the dollar for her to hire.

Oh geez. You can’t say just a soft tissue injury, that’s one of the worst. No way to medically prove anything specific on the injury so judgement is completely subjective. You can’t buy insurance for a claim that has already occurred. Moving property into anything will be reversed by the court. Her only bet is an attorney, if suit is filed.

Caleb Heimsoth it happens across the US. Especially high crime areas with NREIG policies and similar (not their fault, they disclose their limitations, maybe in insuranc-ese but it’s clearly on the application) but it’s price that sells these investors. It happens more on turnkey. Because they lowball the insurance estimate. So if the turnkey says $450 on that and the decent insurance comes back $900. The investor says what can I do to move it closer to $450. The insurance agent strips coverage and raises deductible and it’s now $550. ...but it cashflows at 12%.

With all things insurance, the solution depends on scale. Yes the individual property investor needs a renovators risk policy. (Builders risk hybrid with a special form policy policy that waives coinsurance). They also need a special form property policy for their occupied. Then at turn price well and market aggressively. Quite frankly, insurance is poorly understood and poorly represented. And the brokers that do understand... don’t mess with one house at a time. For bigger guys, 50+ houses (well Indy might be 75 with lower values) you can get a one-size-fits-all solution. So a large turnkey could have all houses just bought at the courthouse, all under rehab before purchase, all under rehab while owned by third party (the customer), and occupied, etc. Cover EQ, Flood, while vacant, etc. But you need size. The biggest hurdle is most consumers think (are brainwashed) cheap insurance is the best insurance. We’ve personally talked since your claim denial, I know you don’t feel that way. I’m speaking to the other readers here. And yes, adjusters are well trained. Had a pipe just pop on one of my rentals in Indy during the -13 weather. First question he asked too. I then said George, it was the tenant that alerted me at 4 in the morning. I winter in Florida, that’s how I even know about this at 8 am.

Jay Hinrichs The vacancy clause is actually not 60 days of vacancy while owned by you. Its 60 days of vacancy period. Buy a house vacant 60 days prior, your starting with the vacancy clause in effect. Common misperception.

COA means Condo Owners Association. Otherwise yes. Feel free to email or call whenever.

I never got to the first point. Some agents don’t sell excess. So if you have 5 units in a $1.1mm building, they convert to COA to get $1.25 from NFIP. When really they would be better with the NFIP amount and excess flood over.

Robert Murphy Thanks, but just an insurance nerd. The reason to usually convert to condo is not so unit owners can get coverage, but to increase the nfip max. Flood should always be carried by the COA, not the unit owner. It’s an odd duck. COA’s can cover $250k per unit. It includes the contents and interior of the units. COA flood breaks all normal insurance rules. So here in Florida the land of towering coastal COA’s, you can easily have an ITV of $60,000,000 on 80 units. So max nfip value on that is $20mm. Then they’re buying 40mm in excess. And I get to here from the smartest guy in the room that the first or second floor would only flood. Then I explain that the sand that the building is on can just leave in a major storm ending in a total loss. But excess is penny’s on the dollar compared to nfip (they get to write a $20mm deductible). By no means am I saying it didn’t happen, but those guys split up the risk to raise the total cost of insurance (NFIP charges more on base premium and fees per policy). If you find those guys, easy sale for you. Recombine to NFIP rules, add excess.

Per building. Be careful flood insurance is increasing at about 20% per year, should continue for 6-8 years. So $1000 in premium today could be $4,000 before the full rate hikes are over. (Government declared no more subsidies for flood insurance and actuarial rates will apply). May be able to get a private market policy, but still seeing similar increases.

What’s being built and what is the finished value?