A question to anyone that buys at auction - Posted by swolf

import · February 18, 2002, 4:16pm

Posted by Mark (WV) on February 19, 2002 at 14:17:32:

You know thats not really what causes the fire, it simply a storage problem.
The need to stop storing the policy so close to the flue, paper catches on fire quickly when exposed to that much heat !!

import · February 18, 2002, 4:16pm

Posted by swolf on February 18, 2002 at 17:16:51:

I was wondering how to get properties insured if they are bought at a foreclosure auction. I have called about 5 different insurerance companies and no one wants to do it. Just wondering what some of you more experienced investors are doing for insurance, and if possible how much you pay.

import · February 19, 2002, 9:28am

Re: A question to anyone that buys at auction - Posted by Tim (NY Upstate)

Posted by Tim (NY Upstate) on February 19, 2002 at 10:28:14:

My State Farm agent would not touch my decrepit 12K rehab… but referred me to an inependant company who did insure it. I got a One year policy for the appraised value 68K and also 100k liability for about $280. They accepted payments so only cost me 70 bucks for 3 months. and when its occupied I can cancel (when it qualifies for standard rental insurance). I think I got a decent deal… lets me sleep and protects my growing investment.

So… ask your current agent… maybe he will give you a referral.

import · February 19, 2002, 7:07am

Re: A question to anyone that buys at auction - Posted by JT-IN

Posted by JT-IN on February 19, 2002 at 08:07:41:

Rather than shopping for a company or a rate, you should be shopping for a well experienced comm’l agent. Trouble is, that if you are not well experienced in the RE business, you may have difficulty landing an agent that wants to gamble their “experience rating” on an unknown commodity.

It is best to attempt to establish this relationship far in advance of when you actually intend on needing this coverage. This will prevent you from coming up short, if and when you make a purchase at auction.

I have a Builders Risk policy, and when I make a purchase, it is nothing more than a phone call to my agent, and coverage is in place. He has authority to add these with immediate coverage. As for cost, I couldn’t tell you specifically. I do know it is not cheap, but the risk is extroardinary, on a vacant and sometimes distressed property, so you would expect a higher premium. The issue is more pertinent to find a good agent that can deliver upon demand, than what it costs. The cost of not having the coverage when needed, is always much more expensive, no matter what the cost.

Just the way that I view things…

JT-IN

import · February 18, 2002, 9:01pm

Re: A question to anyone that buys at auction - Posted by Bud Branstetter

Posted by Bud Branstetter on February 18, 2002 at 22:01:39:

If you have a commercial policy it is as easy as they say. Fax in the info and it is covered. Most policies have 30 to 60 days before it has to be occupied. If it is going to be a rehab then you want a builders risk policy. Unless you have a crew that can knock it out you want a builders risk policy from Zurich. Last one I had was .20 per hundred. Earned premium but good for up to a year. If you rehab real fast then they have a monthly inspection builders risk at .40 per hundred/annual but you only pay for the time until you get it occupied. Rental rates here in Texas have skyrocketed. Used to be .40-.50. at least a .20 per hundred increase lately when you can find someone to write it. Vacant property rates can be twice that. An independent agent or commercial type company is where you want to look.

Just get confirmation of your fax.

import · February 18, 2002, 7:17pm

Re: A question to anyone that buys at auction - Posted by garrison

Posted by garrison on February 18, 2002 at 20:17:55:

ask some local rehabbers what insurance co. they use. i use a co. that i found from another investor that will insure a property in a matter of 15 mins. fax all the paper work over and i sign it along w/ paying for it at closing.

i tell them if the property is vacant/rented, if it needs work or is in move in condition, and how much i want to insure it for (a little above the mortgage or how much i think its worth to me if i pay all cash)

good luck

garrison

import · February 18, 2002, 7:08pm

Re: A question to anyone that buys at auction - Posted by JoeKaiser

Posted by JoeKaiser on February 18, 2002 at 20:08:58:

This is not a small matter . . .

A couple years ago a property came up for sale, unexpectedly, at a local tax sale, a cold storage warehouse. This was, as I recall, a multi-million dollar property, and the opening bid was $250k . . . and we had twenty minutes to come up with the cash.

We begged the assessor to delay the process so we’d have time to get the money together, but to no avail and the property went back to the state with no one having bid. D@mn.

And then it burned down the next day.

I suspect that there was a 50/50 chance at best that we’d have had insurance in place by then. A house, no problem, our insurance guy will do that over the phone and bind it on the spot. But a huge warehouse is another story and had the assessor acquiesced, we’d have been out a bunch.

Interestingly, a couple months ago we foreclosed on a loan we’d made on a restaruant, Bill’s Rite Spot Cafe, in Tacoma. It burned down in an arson fire the very next day. The former owner swears he didn’t burn it down, but I can’t figure out who else might have a reason to do so.

So, while it’s not a common thing, it’s certainly not unheard of for a disgruntled homeowner to light the thing up on his last trip out the door. Getting insured is mandatory in these matters and locating an agent who won’t balk at getting you insured in an instant is a top priority.

Joe

import · February 18, 2002, 6:58pm

Re: A question to anyone that buys at auction - Posted by JoeKaiser

Posted by JoeKaiser on February 18, 2002 at 19:58:22:

This is not a small matter . . .

A couple years ago a property came up for sale, unexpectedly, at a local tax sale, a cold storage warehouse. This was, as I recall, a multi-million dollar property, and the opening bid was $250k . . . and we had twenty minutes to come up with the cash.

We begged the assessor to delay the process so we’d have time to get the money together, but to no avail and the property went back to the state with no one having bid. D@mn.

And then it burned down the next day.

I suspect that there was a 50/50 chance at best that we’d have had insurance in place by then. A house, no problem, our insurance guy will do that over the phone and bind it on the spot. But a huge warehouse is another story and had the assessor acquiesced, we’d have been out a bunch.

Interestingly, a couple months ago we foreclosed on a loan we’d made on a restaruant, Bill’s Rite Spot Cafe, in Tacoma. It burned down in an arson fire the very next day. The former owner swears he didn’t burn it down, but I can’t figure out who else might have a reason to do so.

So, while it’s not a common thing, it’s certainly not unheard of for a disgruntled homeowner to light the thing up on his last trip out the door. Getting insured is mandatory in these matters and locating an agent who won’t balk at getting you insured in an instant is a top priority.

Joe

import · February 19, 2002, 2:09pm

Re: A question to anyone that buys at auction - Posted by Ron (MD)

Posted by Ron (MD) on February 19, 2002 at 15:09:17:

Tim,

Who is the insurer? Your annual premium is better than mine (Zurich) and I get no refund if I own less than a year.

Thx.

Ron Guy

import · February 19, 2002, 8:20am

Re: A question to anyone that buys at auction - Posted by Michel (TX)

Posted by Michel (TX) on February 19, 2002 at 09:20:00:

Hey Bud,

Where do you get Zurich? I’m in Arlington.

Thanks!.

Michel

import · February 18, 2002, 7:48pm

hmmm I wonder if … - Posted by Redline

Posted by Redline on February 18, 2002 at 20:48:46:

that company you’re dealing with insures property in NJ. Are they a national company, do you know?

Thanks,
RL

import · February 18, 2002, 7:33pm

Anyone in IL with a good insurance company - Posted by swolf

Posted by swolf on February 18, 2002 at 20:33:04:

Thank you for your response.

I was wondering if you could say how much you pay for the insurance on these properties. If it is not too much trouble to give a few examples like a house in good condition and a house needing a lot of repairs. I would really appreciate it.

If anyone knows a good insurance company in IL that they use it would be greatly appreciated, and I’ll be sure to tell them who sent me as that they will appreciate it.

import · February 19, 2002, 8:46am

Fire strikes in strange places… - Posted by David Krulac

Posted by David Krulac on February 19, 2002 at 09:46:08:

A ski resort was foreclosed, and shortly thereafter burnt to the ground, funny thing the owners personal residence also burned to the ground after foreclosure.
It just a coincidence, but is seems that foreclosure causes fire damage.

David Krulac

import · February 19, 2002, 8:21am

Re: A question to anyone that buys at auction - Posted by Michel (TX)

Posted by Michel (TX) on February 19, 2002 at 09:21:40:

Hi Joe!

Welcome back. You’ve been missed on this board!

import · February 20, 2002, 8:39am

Re: A question to anyone that buys at auction - Posted by Tim (Upstate NY)

Posted by Tim (Upstate NY) on February 20, 2002 at 09:39:06:

Eastern Mutual Insurance Company out of Greenville NY.
I think this is a small local independant so they may not be able to help out of staters… dunno.
My actual cost was 289/yr. or 4 payments of 72.25 plus $5 fee per payment for the installment billing plan.