All Forum Posts by: Tony P.

If the property is solely tenant occupied, you will be looking for a Dwelling/Fire Policy (may be called a Landlord policy or similar name) or a commercial policy such as a Businessowners or Package policy.

Most homeowners or dwelling/fire policies include:
1. Dwelling (Building coverage)
The limit should be based on the Replacement Cost of the building (cost to rebuild with
the same kind and quality excluding the foundation)
2. Contents (Personal Property): most homeowners policies give a set % of the Building
limit for Contents. Dwelling/Fire policies require that you request a limit for contents.
3. Detached Structures: for other buildings on the property (i.e. sheds & detached garages)
Again, there is normally an included limit of 10% of the building limit. That can be increased
if needed.
4. Loss of Use / Loss of Rents: Normally, there is a 20% included limit. Loss of use is for
your additional expenses if you cannot live there due to a covered claim (i.e. Fire). The
Loss of Rents is for the loss of Rental income if the tenants cannot occupy the house
after a covered loss.
5. Personal Liability: For claims due to Bodily Injury or Property Damage that you become
Liable for and which is covered under the policy. Companies normally offer limits up to
$500,000 but some offer $1,000,000. Buy the max.
6. Medical Payments: Provides coverage for an injury suffered on the premises. Does not
require proof that you were at fault. Used to keep small loses into becoming lawsuits.
Normally offered up to $5,000 but check to see if higher limits are available.
7. Deductible: This is not a coverage but rather your portion of a claim. Most better policies
will not have a deductible for either the Liability or Medical payments coverage. It will
apply to the other 4 coverages. You can select the amount of the deductible, usually
ranges from $500 to $5,000. The higher the deductible the lower your overall premium
but get quotes on all the deductibles you are interested in. Sometimes the incremental
savings from $1,000 to $2,500 or from $2,500 to $5,000 are too small to make the higher
deductible worthwhile. ***depending on how far the house is from the coast, you may
also be required to have a separate Wind or Hurricane deductible. Most times, the
deductible will be 2% to 5% of the building value. That is a significant amount
(on a $500,000 building that comes to $10,000 for 2% or $25,000 for 5%). A policy
with a higher premium may be a better deal if it does not have a wind deductible.
There are many endorsements that are available on the homeowner policy. Without
knowing the details, I cannot suggest which would be right to add on.

Several you should
pay attention to are:
- Ordinance & Law: Provides additional building coverage to deal with rebuilding cost
Increases due to changes in Zoning or Building laws
- Personal Injury Liability: Libel, defamation of character, wrongful imprisonment, etc.
(normally recommended, especially if you are a landlord)
- Water Backup: For water damage due to the backup of Sewers or Drains.
- Personal Articles: Coverage for belongings that have a special or collectors’ value
such as Jewelry, Furs, Fine Arts, Collectibles, etc...
Your age should not be a factor on the pricing but, depending on the company these other factors may get you credits:
- Insurance Score (company pulls certain info out of your credit report)
It is not your credit score, but generally better credit will result in a better score
- Time at your job
- Education level
- time at current residence

Here are some things to look for from an Insurance prospective:
1. Any in-ground tanks (active or inactive)
2. Any Knob & Tube or Aluminum Wiring
3. If built before 1978, does the building have a Lead Safe certification
4. Any wood stoves or secondary heating units. If so, were permits pulled & were they installed by a professional
5. Are any of the homes rented to students?
6. Is there a flat roof?
7. are there asbestos shingles?

The Year that the following were updated (either partially or fully) would be good to know:
- Heating systems
- Roof
- Plumbing
- electrical
Some companies will not write properties with systems that have not been updated.

Hey Tony- welcome! Yep, there are investor friendly realtors out there. Keep in mind any realtor you speak with is probably going to tell you that they know all about investing- ask them a few simple, but specific questions and you will be able to sort out the jokers pretty quickly. 

Beyond that- my personal advice: don't rely solely on what anyone else tells you is a "good" investment or the proper way to calculate any expenses or returns. Sure, there are standards, but real estate is hyper local and what works in LA might not work in Baton Rouge. Also, every investor has different goals, resources and financial knowledge, these items play the biggest role in whether a deal is a good one or not. 

I've worked with many partners and clients on deals that other investors, especially here on BP, told them were not good, but those deals have put cash in their pockets and leveraged them in to more properties with no cash out of pocket. 

Do what works for you- the only advice I have for you is to make sure you have at least two viable exit strategies. If you do can do that, the rest is just noise!

@Tony P.

You should work with a realtor/agent who is familiar with real estate investments and one who focuses on being a buyer agent instead of a seller agent.
This agent will be better suited to distinguish which property will make a better investment. He should also have a network of contractors, lenders, etc that you can tap into.

A mortgage broker is normally a middleman who will connect you with the lender. You may potentially have to pay a broker a fee for his search.