Real Estate Investors Association of Greater Cincinnati

 

Insurance for “Subject To” properties is a commonly misunderstood challenge.

A “Subject To” deal is when you agree to purchase a property subject to the existing mortgage along with all other liens attached. The existing homeowner deeds the property to you and you take over making the payments to the lending institution. You do not assume the loan through the bank. It’s a popular creative investment strategy for real estate investors.

When it comes to insurance for “subject to” deals, some rules of thumb usually apply:

1. If you (or your entity) own, or have a financial “stake” in the property, be the “first named insured”. The first named insured is the primary recipient of any potential claim benefit or liability protection only.
2. A “loss payee” will have its interests protected in the event the property itself is damaged (a mortgagee is inherently BOTH).
3. If you decide to keep the “homeowner’s” policy in place and be named as the additional insured, be advised: if it is discovered that the ex-owner, the first-named insured
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BreAnn Stephenson, National Real Estate Insurance Group

 

There are many key relationships involved in real estate investing but hiring a proficient Property Manager is critical. A good PM can help you achieve maximum cash-flow from a property or may pave your way to bankruptcy. Many property losses involve “absentee” Property Managers or their tenants, evidencing the need for careful consideration when hiring this service. Today we will discuss 5 crucial qualities a good PM demonstrates and a sample of corresponding questions to help reveal if they possess these 5 C’s.

Crucial “C” Quality #1 – Clear Communication

Communication is the cornerstone of any investor-PM relationship. One pattern we see much more than we’d care to is a decline in communication between the property owner and PM, directly followed by damage at the property. You will want regular reports from your PM about your property’s condition and confirmation the rent is still coming in. You will also want to know immediately if something goes wrong so that it can be fixed, and any further damage minimized. Asking the following questions can help uncover your potential PM’s communication skill level. Read More...