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fozzy
realtor/investor
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insurance policy
Saturday, October 14 2006 03:18 PM
im just about to do my first sub 2 deal, what do we do about the insurance policy. i have been told 2 things. 1- add my name as addtionaly insured. i have been told to get a new policy and cancel the old one and get a landlord policy, which do you recommend on doing, what name do i put down on the policy, the name of the trust or my name or my company. also with a new policy and it being a landlord policy wont this trigger the bank? any help?
also im getting alot of deals where people have over 100,000 grand equity and their willing to wait 3 to 4 years for it, is anyone interested in being a private lender?
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KaosProperties
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Re:insurance policy
Saturday, October 14 2006 08:04 PM
Assuming the owner stays at the property......
If you have entity (ie c-corp, llc), have your entity as a co-beneficiary instead of your personal name on the owner's existing policy.
If no entity, then add your name as a co-beneficiary to the owner's exisiting policy.
No need to change policy at all.
Nothing more, nothing less.
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fozzy
realtor/investor
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Re:Re:insurance policy
Sunday, October 15 2006 08:48 PM
what about if the owner is not staying in the property? im going to take over sub 2 and do a rent to own, then how does the insurance policy work?
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KaosProperties
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Re:Re:Re:insurance policy
Monday, October 16 2006 12:44 AM
Well, that changes things.....
Whose name(s) will be on your sub2 contract that should include an insurance clause?
Some states/insurance have different criterias/laws on how it should be handled for sub2 and insurance.
To ease your concern, make a few random phone calls to the insurance companies. Pose your question (without divulging your name) and see what they say. Be sure to talk to an experienced agent, not agent in training.
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Jim Hughes
Investor
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Re:Re:Re:insurance policy
Tuesday, October 17 2006 05:41 PM
A sub 2 deal is tricky with the homeowners insurance.
The seller has a homeowner policy for occupancy of a residential dwelling. When you buy as an investor you need a fird dwelling policy. I would suggest you buy a second policy on the sub 2 deals and protect your interests with the right kind of policy with the named insured stated correctly.
Hope this helps.
Jim Hughes
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Jim Hughes
Investor
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Re:insurance policy
Tuesday, October 17 2006 05:42 PM
I answered this question for you on the other question you posted.
Jim Hughes
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Jim Hughes
Investor
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Re:Re:insurance policy
Tuesday, October 17 2006 05:48 PM
I would like to make some suggestions:
1) Dont rent back to a seller -- period
2) Each rental property should be placed in a land trust before an entity is considered in the line of ownership or control
3) You shouldnt be adding you name as a named or additional named insured on the sellers policy.
4) If you dont change the coverage on this property you will not have your interests insured properly. Buy the second policy with the property coverage form used to insure as an investment property.
Regards,
Jim Hughes
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fozzy
realtor/investor
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Re:Re:Re:insurance policy
Tuesday, October 17 2006 07:26 PM
jim thank you for the reply this is helping me out very much. one more question i have is you said to buy a second policy, we would cancel the other one then right? also with this house im going to move into myself, is there anything i should do differnt here. what name should i put on the new policy? also this house is going into my LLC, does this change anything here? if im supposed to put my own name on the new policy wont the bank will see this, what happens here?
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Jim Hughes
Investor
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Re:Re:Re:Re:insurance policy
Tuesday, October 17 2006 10:14 PM
You should have a HO-3 homeowners policy issued to protect your interestes as a resident of the houses. The named insured should be on the policy reflecting the name on the deed whether that be a trustee of a land trust or your own name.
You should put in a land trust first before using any entity. Study our LAND TRUST MADE SIMPLE - BASIC home study course for the details.
Keep the sellers policy enforce and have your own issued to reflect you residence in the house.
I recommend you study our land trust material.
Sincerely,
Jim Hughes
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