All Forum Posts by: Michael Norris

I’m not here to defend HW in the least they are big boys and can handle themselves. But I have to say some of y’all are getting a little ambitious on the spam/conspiracy accusations. If the random guy in Cali setting up a meet up and he seems shady - don’t go. If he’s somehow a remote shill for HW it’s going to be obvious then flame all you want. If you find yourself on an email list and want off - scroll to the bottom of the email and click the link to unsubscribe. Personally I wouldn’t be happy seeing my business name in a post like that without something more factual to back it up.

Look up Jerry Hallman he’s nationally the #2 agent for Foremost and is in Tacoma

Some carriers will cover the location on a single policy while others will do it on two policies - neither is wrong. I wouldn’t focus so much on 1 vs 2 policies as much as making sure you have the proper coverage for both houses and how that fits your budget.

It’s not that ACV coverage is messy as much as the average person does not understand how claims are handled on an ACV policy and/or what the minimum amount of coverage is required by the carrier on an ACV policy. They just look at cost. First: What is covered? ACV polices will list 8 or so types of loss that will be covered by the policy and if it’s not named...it’s NOT covered. RCV polices are an “all risk” type of policy so it will only list the exceptions that are not covered - as long as the loss isn’t listed as an exception than it will be covered. It’s complicated and is why some people hate the concept of insurance because they end up learning this stuff as part of filing their first claim. Next - how would a claim be handled? Ex: A house with a 15 year old roof sustains enough storm damage requiring it to be replaced and the roof damage is estimated at $20,000 and assume a $1000 Policy deductible. Replacement Cost - will pay out $20k for the roof minus deductible. Payout = $19,000 ACV - will pay out $20k minus a depreciation factor (probably 50% depreciation on a 15 year old roof) then subtract the deductible. Payout = $9000 Leaving the property owner paying out of pocket $11,000 to fix the roof. Big difference right? Replacement Cost is obviously better but... On a Replacement Cost Policy you’ll be required to carry the Dwelling Coverage amount something close to the full estimated cost to rebuild the home. Diff states have vastly different rebuild cost. In my state it averages around $150 per square foot to rebuild x 1000sqft = $150,000 A replacement Cost Policy would require you to carry $150,000 dwelling coverage. But it’s Cleveland Ohio and you bought the house for $35,000. It was built in 1910 and may be a little rough around the edges, tougher part of town, etc. There’s more to it than that but hopefully that helps. An agent who understands investment properties and what your goals are could break it down a lot more than what I just gave.

Hi Michael - If you would like to attend my Cleveland REIA meeting Tue Feb 13 at 6pm I would be happy to add you as my guest. Our main speaker is the head of BNI for NE Ohio and is talking about his new book. There will be a networking session at the beginning and also a buy/sell/trade during the meeting so you'll have plenty of opportunity to chat up other local investors. Let me know if you're interested?

I had a similar situation on my current flip. Although intimidating at first if you find the right company to do the work and build it into the budget you can make it work while other investors run away. We had (the worst part) 40’ of basement wall totally rebuilt and used Foretress Systems carbon straps on another 60’ of basement walls. The straps are paintable and come with a transferable lifetime guarantee. All in I think it came in under $15k

I think between Cuy Falls and N Akron U of A/ Montrose/ Highland Square would be good opportunities for you. I’m Cle west sider so it’s out of the range for me to do flips even though I’ve seen a few that looked interesting. Good luck

Jason Bott hit on the main items you should focus on. Replacement Cost coverage is always the best type of coverage but for many of my NE Ohio investor / insurance clients it’s not necessarily an option. Ex: buying an older 1800 sqft home for $40k and insuring it for over $200 doesn’t make sense for the investor’s budget nor the insurance company underwriters. Don’t get me wrong - I have many older landlord homes insured for full replacement cost but I also have just as many others at Actual Cash Value. A lot of time I’ll start the policy at market value then add to your coverage for improvements such as kitchen, roof, bathrooms, etc with the goal of protecting your principle investment. I always suggest high liability limits and adding on Sewer & Drain backup coverage if there is a basement. If you have any other questions I’d be happy to help.

You’ll “overpay” for Lakewood as compared to nearby areas but that’s to be expected for such a hot area just be careful not to step on a land mine. Most of the available Lakewood properties I’ve seen have neglected maintenance issues so make sure you know what kind of work you’re able to do and/or budget for. Being young / inexperienced he may not be as aggressive on screening tenants (if he goes multifam). That is the biggest issue I see with my investor / insurance clients in NE Ohio...They are so focused on getting the maximum rent that they select a bad tenant and get punished for it.

I’d suggest joining a local REIA group and get exposure to other investors and what they are up to. The one I belong to charges less than $200 a year to join and has a bunch of solid speakers as well as high quality networking opportunities. Whatever question you have the answer is usually in that room.