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13 NovBonds versus Insurance Policies
Bonds may be sold by licensed insurance agents, but they aren’t the same thing as insurance polices. In fact, they aren’t even similar. Obtaining routine permit and license bonds is relatively easy, but unfortunately, bid and performance bonds (among others) require detailed underwriting and company financial records.
Read More ...20 OctLegal Title versus Equitable Title
Because the insurance industry is founded on the principals of risk, contract law, and civil liability, properly insuring properties purchased with a wrap-around mortgage can be a challenge, especially when titled in a trust, and the issue of ‘legal‘ title versus ‘equitable‘ title often arises with regards to who has an ‘insurable interest‘ and who doesn’t.
Read More ...01 Oct1099 ‘Subcontractor’ vs. W2 ‘Employee’
As a business owner or investor, you probably hire people on a fairly regular basis either for part-time or seasonal assistance or as full time help, and like many small employers, you want to avoid paying payroll taxes, you don’t want the ‘responsibility’ of an ‘employee’ and you choose to pay on a 1099 basis and then call these workers ‘subcontractors’ – but are they really – or do you simply assume they are ‘subcontractors’ because you don’t pay their taxes? What’s the real difference between a W2-employee and someone paid on a ‘1099’ basis?
Read More ...15 JanHow To Insure Vacant and Properties That Are For Sale
To get right to the point, there is no one-size-fits-all policy and properties which are either vacant or held for sale at the time an insurance policy is applied for cannot be written with a standard-market insurance carrier and they require different types of coverages. The following information may seem overwhelming if you are not familiar with the insurance industry, but it is intended to give you a basic understanding of why coverage for vacant property is more expensive and how it differs from the other property policies you may be more familiar with.
Read More ...15 JanHow to Insure Properties Taken ‘Subject To’ the Existing Loan
Prior to the late 1980’s, mortgages were written differently than they are today and investors and homeowner’s purchasing new property commonly used the ‘Subject To’ method of assuming the seller’s underlying loan as a main-stream and accepted purchasing method. However, after the Savings and Loan debacle, and the subsequent removal of popular NENQ (Non-Escalating Non-Qualifying) loans, the method of using ‘Subject-To’ financing was swiftly brought to an end. That said, however, with the new ‘credit crunch’, the record-high number of foreclosures, a declining housing market, and the recent changes in loan programs; investors are locating bargains and, although technically not allowed, the ‘Subject-To’ method is again alive and doing very well.
Read More ...15 JanDwelling Policies vs. Builder’s Risk
Not all houses are created equal – and neither are insurance policies. If you are an investor and you have ever purchased a rehab property using only ‘builder’s risk’ insurance – you’d better continue reading. Few people, including investors and full-time real estate professionals, have any real understanding of what property insurance is, the various coverages used, endorsements, and, most important, exclusions.
Read More ...14 JanClaims Made vs. Occurrence Policies
What you don’t know can hurt you. As an investor, especially a commercial buyer or general contractor, there are some things you should definitely be aware of regarding your liability insurance. The same holds true if you are a licensed Realtor or mortgage professional.
Read More ...14 JanProblems with Insuring Seller-Financed Properties
Seller-financing a property is a great alternative to traditional mortgages and the difficulties that they involve; however, insuring these seller-financed properties is complicated at best and somewhat risky.
Read More ...14 JanHow a Property’s Reconstruction Cost is Determined
When it comes to determining how much value you should insure your property for, one issue that seems to continually cause confusion and misunderstanding is that of a property’s reconstruction amount, also commonly referred to as its replacement cost.
Read More ...14 JanInsuring Vacant and Actively For-Sale Properties
To get right to the point, there is no one-size-fits-all policy and properties which are either vacant or held for sale at the time an insurance policy is applied for cannot be written with a standard-market insurance carrier and they require different types of coverages.
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