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Showing posts with label investors. Show all posts
Showing posts with label investors. Show all posts

Friday, June 28, 2013

Insurance for Real Estate Investors

Distressed Property Insurance

As our group started out as specialists in distressed properties, one of the problems we came across was insurance coverage for asset and worker protection. We thought if the Bank won't insure it, no one else will. But let’s look at it from the Lenders point of view.

167 Street Living Room Unit 2 Rehab Duplex
Why would you Insure this Property?

Investors always preach, leverage someone else's money not yours. That's true but Lenders are taking a risk. What happens if an injury occurred on the property or the asset burns down? The Lender is either stuck with court costs, fines, hospital bills or his money is gone due to the lack of insurance. So FYI...Lenders are going to make you insure the property. We rather get our own policy than make forced payments to the Lender's insurance policy.

Depending on your exit strategy, you will eventually need some type of insurance.

Front View 1184 Rehab Duplex
Would You Insure This Property?

Below is an outline of some of the coverage’s we implemented while bringing properties back online:

Types of Insurance Coverage or Services

  • Builders Risk Renovation Policy - Provides coverage that protects a person's or company's interest in materials, supplies and equipment used in the rehab or construction of an asset should these items become lost or damaged.
  • Liability Insurance - It protects the property owner in the event he or she is sued for claims that come within property boundaries. The policy is designed to offer protection against third-party insurance claims, like contracted workers or tenants.
  • Windstorm - Most policies issued today DO NOT cover damage from high winds. It is very difficult to get a windstorm rider due to the size of the deducible, ranges from 10K to 15K.
  • Flood - Damaged caused by rising water. Broken pipe or hoses causes damage to interior of unit or building. Flooding caused by storm surge.
  • Fire, Theft and Vandalism - During rehab you can expect one of these three items to occur. Are you protected from these likely events?
  • Insurance Loss Consultants - Provides Claims Representation to Policyholders. If you experience an event that financial hardship will occur, the insurance company is going to use every resource available to limit the payout amount and the policyholder is expecting the repairs to be done with no out-of-pocket expense, including the deductible. Insurance Loss Consultants make sure that the investor receives the largest benefit to which they are entitled under the insurance policy.
  • 4 Point Inspection is required if an investment property that your company or contractor is restoring is older than 30 years or being refinanced. Insurance companies will want to check the following four systems before issuing a Homeowners policy:
    • Roof
    • HVAC - Heat, Ventilation and Air Conditioning
    • Electrical
    • Plumbing
  • Our Contacts - These are companies that specialize in issuing policies that are going to protect you against the hazards of being a real estate investor.

In the beginning of the rehab depending on your exit strategy, insurance might not be needed but you will eventually. Remember, any property has value even if you can't see it. Are you prepared to lose that value if you don't insure it?

Related Links, Blog Postings, Presentations or Articles:

Written by Bob Burns.
 
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+Real Estate Investor
about.me/RobertKBurns
Telephone #: 305-586-5280
sec8@planocho.com

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Thursday, November 22, 2012

Homestead Housing Authority Miami-Dade County Florida New Section 8 Offices

Homestead no longer Strawberry Fields!

The Homestead Housing Authority in Miami-Dade County Florida has undergone some major changes since the real estate market began heating up several years ago. The City of Homestead enjoyed a good 10 years of expansion. Work force housing communities began springing up where strawberry fields, nurseries, orchards and farm land once occupied a majority of the acreage now developed. Major retailers like Wal-Mart, Nike and Home Depot, discovered that Homestead was the last stop for travelers and tourists before they entered the Florida Keys.

I discovered the Homestead Housing Authority back in 1998 when it was just a small office. I found the agency was very willing to work with Landlords and Real Estate Investors by making the Section 8 processing cycle very easy for owners and tenants. What I didn't find was a lot of investors or Land Lords using Section 8 or Plan Ocho as an additional marketing channel for finding tenants to occupy their investment properties in South Miami-Dade.

That was Then, This is NOW!

The Homestead Housing Authority has just completed a new building and road modifications to their facilities. HHA and the rest of Homestead has grown and caught up with the rest of Miami-Dade county.

During the recent real estate bust, investors have picked up bargin properties in Southern Dade County. If you are a Landlord or a property owner looking for tenants, the Homestead Housing Authority HHA is one source for potential tenants in Southern Miami-Dade County.

Related Links, Blog Postings, Presentations or Articles:

Written by Blog posting Author +Bob Burns.
 
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Bob Burns and air filter maskBring It Baby!
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Real Estate Investor
about.me/RobertKBurns
Telephone #: 305-586-5280
email: sec8@planocho.com
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Tuesday, February 21, 2012

Determining Your Investment Property Value

A good Real Estate Investor is constantly looking for motivated sellers that are offering deals they can make a substantial profit on. Investors have to determine what they are willing to pay for this asset without losing money in the process. There are several problems that can occur with this investment objective :

  • Finding Motivated Sellers. In order to make a substantial profit, investors must offer a purchase price substantially lower than the Seller is willing to accept. If the Seller doesn't negotiate with you on price or terms you are wasting your time. Move On!
  • Determining the Maximum Allowable Offer MAO. This formula allows real estate investors to determine the MAXIMUM price they can offer the seller and still make a profit.
  • Determining the Property's Repairs Costs. Sellers are usually motivated to sell their property because the asset or themselves are in a state of distress. As investors purchase multiple properties they get pretty good at determining the cost to bring the property back online.
  • What is the After Repair Value APR? What will be the property's value be after cleanup and repairs are done? You need comparables to assess the property's value. The Multiple Listing Service MLS is a fantastic source for retrieving sale and property information but:
    • MLS is only available to Realtor Associations.
    • You have to be a Realtor Association Member.
    • Costs money to be a member:
      • Realtor License Fee.
      • Association Membership Fees.
      • Continuing Education Fees.

What if you don't have access to the MLS to determine property comparables or COMPS? How are you going to determine a property's value if you don't have access to information about the neighborhood?

Don't Worry!

There is plenty of information on the internet. Most counties in the United States provide free data concerning all the properties they currently have on their tax rolls. We provide a page on our web site that lists Property Information and Clerk of the Court data for each of Florida's counties.

Once you have determined the following items:

  • Repair Costs.
  • If you are financing the deal, Principle and Interest or P&I and closing costs.
  • Monthly Fees like:
    • Electricity and Water Access.
    • Insurance.
    • Taxes.
  • Determine the After Repair Value APR.
you will need to plug in these numbers into the MAO formula to determine your MAXIMUM Offer Price.

YOU MUST never, never, never, ever go beyond that price or you will lose money and the MAO price is only good for 90 days! It is based on a three month window.

Related Links, Blog Postings, Presentations or Articles:

  • In the very near future we will provided a short video below this blog posting that will help determine a property's After Repair Value APR in Miami-Dade County, Florida.

Written by +Bob Burns.
 
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The caricature of Bob BurnsNever Quit!
Bob Burns Print Signature Photo
Real Estate Investor
about.me/RobertKBurns
Telephone #: 305-586-5280
email: sec8@planocho.com
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