Insurance messing up my L/O deal
I was with a seller and we where hammering out the details on a L/O deal. When we got to maintenance the subject of insurance came up. I told him he would probably need to have his policy changed to a landlords policy. There was concern about the policy going up because we where making the payment just enough to cover his payment. So the seller called his insurance co to check.
Here is the problem:
His insurance co will not give him a landlord policy, furthermore, if he is not occupying the house they will cancel his policy.
I figure, no problem, I’ll call my agent and check on a new policy. He has been put on a quota and can only write landlord policies for existing clients, furthermore, he has checked with other agents and it is the same deal everywhere, he said maybe Allstate if the seller has excellent credit, no past claims and moves over his auto policies.
Q1- Has anyone else run into this problem?
Q2- How would a subject-to change this situation?
Call your insurance agent and see what the cost of the insurance would be if you took it out. Tell your agent that you will be entering into a "net lease" and will have the responsibilty for the insurance on the property. Then, after your agent tells you the monthyly premium, subtract that amount from the monthly rent you had figured you would pay to the owner. If you carry the insurance and his mortgage company is added as an insured to your policy, there should be no problem. This will get the owner the same amount he was hoping to get previously.
Taxjunkie
That's a new idea. I like it
Thank You.
here's the box ----------------------------------------------->here is taxjunkie
way outside the box
-Tony-[ Edited by Tonyy on Date 05/22/2003 ]
when tonyy said taxjunkie was way outside the box-does that mean he is right or what-explain? thanks
He meant that taxjunkie was thinking creatively rather than conventionally, looking for the solution to the problem.
By offering to take out insurance himself and reducing the payment by that amount, the investor has solved the seller's problem and still kept the same amount of money going to the seller.
Roger
Taxjunkie thats an EXTRAORDINARY solution! I am going to do exactly what you suggested from here on out....one less irritation to worry about.
If this place had a "Tip of the Month" award, you'd get my vote.
I ran into a similar problem once, but I eventually found an independent agent that found a company who would issue the necessary insurance. Just persist and you'll find someone.