Builders Risk Insurance is going to cost me more money
As you can probably tell the Hopkins Project house is still on hold. I’m waiting to hear something from the city but my loan will not allow me to wait much longer. Most rehab loans are for one year and mine is no exception. Even if you are using hard money, there is normally a time frame of one year before you will need to refinance or pay in full. This project has been a cluster from the beginning. Each day costs me more money that I may not get back if the city does decide to take this property. I have had some high ranking individuals paying close attention to my situation, so hopefully that will keep the city honest in their negotiations. But that’s a story for another day…
Not only do I have to continue to make mortgage payments each month but my builders risk policy is set to expire soon and it does not come cheap. Builders Risk insurance is required for rehabs and new construction. Because it is not a habitable dwelling, insurance providers will not cover it with a typical home owner’s insurance policy. Builders Risk insurance protects the homeowner against damage to the property. Bank rehab loans also require that house flippers attain builders risk insurance. You may be able to obtain typical home owners insurance on the property in cases where the home is livable or has an occupancy permit. Just make sure it covers the type of damages that occur during a remodel.
posted in Complete Rehabs, Insurance, Real Estate Investing | 0 Comments
