All Forum Posts by: Lynzie Mackey

My home was hit by Hurricane Ian 9 months ago.  It's elevated so flood damage was only done to the garage, but my shingles and some siding blew off and caused major water damage to the interior of my home.  At this point, we have no kitchen, or flooring, and about 30% of the walls have been ripped out.  My whole ceiling on the top floor is ripped out as well. 

We initially only got paid $30k from Edison Insurance, so we spent months trying to figure out money with them while moving and repairing other properties that were also damaged from the storm.

Since it's our personal home and there were some weird things about it, we're taking the time to move some walls around, ie make the laundry room bigger than 3 feet by 8 feet and changing a half bath to a whole bath to add value, improving curb appeal etc.  I tried to do owner/builder permitting since I had basically nothing to get my project started and the city rejected the permit saying I need stamped architectural drawings which are supposed to be complete by tomorrow.  We have more money from insurance, but it is probably about only 40% of what we will need to repair our home.

The issues I'm running into are:

1.  The demand for work is insane right now.  There was SO much damage that it has taken me weeks to get quotes back from GC's.

2.  Since I had two really damaged homes, I hired a contractor in January to fix one of them.  It took 4 months to permit (the city is figuring everything out through this as well) and they are now moving slowly (3 weeks for demo). 

What do I do here?

I have a quote to fix the exterior of my house (siding, windows, concrete, garage break away walls), but I'm worried it's going to take forever to even get quotes from a GC to start working on the interior of my home.  I'm finishing my owner/builder permit, since I started that way.  Is it a good idea to sub out the interior myself?  Or will I have just as much of a hard time finding people to work?  I haven't managed a big project like this, but I have some general knowledge of construction from other projects I've done.  

I have about 4 months of runway with Loss of Use from Insurance before money runs out.

Any advice would be greatly appreciated.  It has really been such a hard time for our family that we've tried to make the best out of.  But I struggle every week waiting on people to get back to me so that I can get back into my home.

@michael 

@Michael Baum Yes the 50% rule is from FEMA for flood damage... Good idea about the rebuild rate. I think FEMA just has different rules on flood policies. The 30k is for "Increased Cost of Compliance" and is a FEMA program, but you're right, it might not be easy to get. The 100k is based on the tax collectors

@John 

@John Underwood yes, my wind policy does have rental loss coverage, but they immediately denied me because I had a roof exclusion due to it being a flat roof and the damage was mainly done by flood.  I'm talking to a public adjuster about it now.

I think I agree with not raising it if I don't have to.  The last time the island flooded like this was 60 years ago.  But nothings guaranteed!  Is there risk with having the contractor do this?

@Bob Metry Meeting with one next week... Have you used one before?

On September 28th, my vacation rental, which was set to bring in over 100k this year was flooded with 7.5 feet of water. It's currently gutted and we are just waiting, waiting, waiting on insurance. There's this FEMA 50% rule and we are not sure what to do. I live around the block and my actual home was also damaged, and my two tiny homes also flooded, so we've been dealing with a lot. Basically my whole business was destroyed in 24 hours...

The county has my property (w/o) land valued at $202,207.  It's 1435 sq feet.

I have $100,000 per the 50% rule to fix the whole property up without having to raise it to the current base flood elevation of 11 feet.  My contractor said it would be around $130/sq foot, but that he could mark the permits at 100k and tack the remainder of the balance onto my personal property.  Is this a bad idea?

I am also considering getting an appraisal to re-evaluate the building pre-storm, which I will most likely do.

My question is:

Has anyone been through this before?

Part of me is wondering if it's worth tearing down and rebuilding a new property just in case this happens again so I don't have to deal with possible flooding, and because it will make the property hopefully more valuable.  I applied for an SBA loan, which could potentially help with the additional cost to build.  I have not heard back on how much insurance will be giving me yet, but my total limit is $210,000, and they offer an extra $30k if you have to raise to the current base flood elevation.

What are the things I should consider when making this decision?

What steps should I take next?  I should be hearing back from insurance in the next month.

Anyone with experience in this please HELP! 

I've been thinking and considering all of your advice!  

Here are my main hesitations:

1. Since I bought the home as our primary home the interest rate on the current mortgage is 2.87%. That makes me very hesitant to cash out refi, since I will be upping the mortgage and I'm thinking it won't appraise for what I could sell it for, plus I can only access up to 70 or 80% of that value (depending on the loan terms). I could possibly take out a HELOC once I have two years of STR history. Right now my DTI has to cover both my primary and this home which is limiting me on my options.

2. My primary home is less than a mile (0.4 miles) from this property, making it extremely convenient and easy to manage. 

3. My STR is in phase 3 of the buying, setting up and starting renting (meaning, I've done a LOT of work and now I can sit back and do normal maintenance while collecting the income). So TIME is my last concern. I know I will have to put in time to purchase or exchange.

@Cole Simpson  Where are you planning on putting that money?  I've been thinking a lot this past week and have a lot of options, like what @Alex Olson is saying about buying a multi-family

@Mike D'Arrigo I don't really believe there will be a recession. My main hesitation in wanting to hold on to the property is that I do believe a lot in the area and the future improvements and location, so one of my ideas is selling my 1959 property and putting it into a newer construction home closer to the STR district on my island possibly on water (to capture more opportunity for appreciation), and one not on the ground floor where I pay $7200 in flood insurance a year. What are your thoughts on that?

@Jocelyn Kaufman @Alex Olson What's the best way I could learn more about getting into multifamily?  

Thanks again for your time and responses!

@Mike Dymski  That thought crossed my mind the other day, to move back into the property.  Thanks!

@Jocelyn Kaufman  Thank you!  We have been very thoughtful and lucky.  And that's something to consider with more people working remotely.  Do people usually find a property before doing the 1031 exchange?  We also thought that with that kind of money, we could purchase 5 additional units, but we would have to most likely go out of our market to do that.  I think the 1031 is allowed to be rolled into 3 properties, but from what I understand, it has to be within 6 months?

We purchased a home on an island in September 2020, put about 30k down and about $60k to furnish and do the backyard, new flooring and paint.  A year later, we purchased another home on the island, moved into it, and converted the previous home into a vacation rental.  A comp just a few houses away closed for $880,000 2 months ago.  Our net profit with self-management is between $30-50k (we have not completed a full year).

Purchase Price:  $385,000

Loan Remaining $355,000

Estimated selling price $900,000

When do you decide to sell?  The island we live on is making huge improvements, like a new 5 star resort is being built (which has never been done here) and improvements are being made by the city. At the same time, it seems a recession may be looming, and we're thinking maybe it makes more sense to "buy low, sell high," not "buy lowest, and sell highest."

Need advice from someone with experience!

@Luke Carl just created an account on Trello.  Is there any way you can post a screenshot of your workflow, or how you utilize it for the maintenance?  I would love to see what you're doing!

@Joshua Strickland I like this idea as well.  Any tips on how you found a good handyman?  I have one I use, but he might not sure I would trust him with something like this.  He's great at showing up the day I have a problem, which is why I continually use him. I guess that would be more emergency maintenance?  I want someone more to inspect the properties and deal with the small things.  

Now that I think about it, I'm also wondering if people have a way to get work orders from the guests directly?  Like maybe a google survey or platform where they can report things and it can go directly to that maintenance person.  Any ideas?

Anyone found a way to automate their maintenance for STR's yet? I have 3 STR's and am wanting to scale my business this year with one or two more properties, but am looking for ways to automate the thing I dislike the most (all those small issues like replacing a doorknob that I will be doing tomorrow). Any apps you use? I'm also working on a rolodex for vendors, so looking for suggestions there too.

@Michael Baum I was thinking about asking the insurance broker about adding coverage!  Thank you.  I requested quotes through CBI and Foremost thanks to @John Underwood from another post, but they both told me they weren't writing policies in my area.  

I'm looking into insurance on my vacation rental, which we just started renting out and currently have a normal homeowner's policy on it since we were living in it prior.  We're in Fort Myers Beach, FL, and so Proper Insurance is quoting us $2,500 without wind and $8,000 with wind.  I was quoted $4,000 through Fednat, but noticing it doesn't have all the coverage that Proper does.  I'm thinking about writing a policy with Fednat that includes hurricane, and then the policy with Proper Insurance without wind.  Anyone done this before?  Thoughts?