All Forum Posts by: Jer Yeung

oh - as for the coverage, there has to be an interest in the property insured in order for insurance to pay a claim on a property.  Either of the options will get that job done.  In many cases, if it's a matter of Dan Trinh vs Dan Trinh, trustee of the Dan Trinh Trust, insurance companies will overlook it and pay a claim to the trust (legal owner of the property), as that was the intent of the policy purchased.  I have run into a situation where an insurance company has been a real stickler on something like this though... best to get it straightened out the way you did.

It matters, but likely not to anything that would make a difference.  Not every company will name a trust as the Named Insured.  Oftentimes, it will be Dan Trinh, trustee of the Dan Trinh Trust... ... ...

The Named Insured has the rights to the policy (specifically the First Named Insured), including making changes to the policy, etc.  Additional Insureds (or Additional Interests, as there is a difference), are entities that have some sort of coverage with regards to the policy.  In a situation where you manage the trust and are the trustee (an assumption I'm making), either way works.  We set up policies both ways, more with the individual as the Named Insured for personal lines policies, and more with the Trust as the Named Insured for commercial (5+units) policies.

hope that helps!

Depends on the size and scope, but at least in CA, Foremost and USLI are both good options - we also use a program that specializes in Builder's Risk as well through Zurich. The key is to make sure the construction is disclosed, and there is coverage for builder's risk (or COC). You could also do a specialized Builder's Risk type policy - depending on what you need, that may be better / broader coverage, as it could include coverage for soft costs, property off-site, etc. Probably fewer problems with different types of entities that could be involved as well.

@Nicole Lee you might want to chat with a local agent, as the carriers have different offerings and filings in each state.  Foremost may not do the same thing in your state, or there could be other carriers that might be a viable option.  

Either way, most will want to look for an independent agent that can get out and market across many carriers, especially when it comes to more specialized coverage.

Agree with Chris to an extent.  It also has to make sense within the scope of the property / replacement cost.  a $3k deductible on a $3mm property is low, a $3k deductible on a $100k property is high... 

May have to check out FIBI - not able to make it this week, but will put it on the calendar for February!

that depends on your lender.  Are you living in either of the units?  did you tell them that you were going to live in a unit when in fact you weren't?  That is something that only your lender can answer, as it's based on your specific application for a loan.

Short of specific adverse conditions on the property or prior loss history, getting a Non-OO landlord policy shouldn't be an issue. Getting an OO policy for a duplex shouldn't be an issue either. If it's going to be vacant for a while, then you might want to get a vacant property policy.

If you're going to look at a city like Memphis, you should look long and hard at Memphis Invest.  I went with them because of their operations and how the property management is looked at from a business perspective.  The detail in their metrics and how they are used to define their procedures is impressive to say the least.  I think of it as akin to investing in multi family as far as the scale of operations with the ability to scale and manage your own portfolio without having to worry about the rest of the investors or rest of the units.  There is flexibility and diversification all in one. 

Clearly there's more to it, but if you're looking at turnkey, don't just go by the numbers - get a feel for the actual operation that you'll be working with for management hopefully for the next 10-20-30+ years.  

# of doors / scale matters.  Even if you're talking about 1 home versus 3-4 homes that net the exact same cash flow, having 3-4 doors gives you diversification and puts less at risk at any given time.  The downside is that you end up with multiple houses to keep up and multiple tenants to deal with (which could be a hassle).

I'm all for scale if done properly!

The step up is there regardless of sold now, sold later, or sold with seller backed financing.  There is also the possibility of a step up being passed from mother to daughter down the line as well depending on how it's structured if they don't need to have the property right away and can just pay the aunt and mom rent... there are... a lot of options!

@Brian McPheeters - the spreadsheets include a plug for vacancy as well as maintenance & repairs.  There isn't a capex line item, but that's also something they address up front with the extent of the rehab (at least for the common capex items).  You can always modify the spreadsheet to goose the repair numbers with what you want as the capex number, but I'm not sure that's necessary.  

They also include the management fee, lease fees, etc.  Not sure if they were different in the past, but they seem to be pretty comprehensive now.