Latest / The Wealth Vibe Show / Episode #109 Multifamily Insurance Strategies

Transcript

Episode #109 Multifamily Insurance Strategies · The Wealth Vibe Show

• 0:00
  But what I would what I would say is look at the area.
• 0:01
  What is most likely a natural disaster that is going to affect your property.
• 0:07
  I would talk to neighboring communities around maybe if there's like a shopping center close by, go in and talk to the owners there and say, hey, during the last storm, was there a flood here?
• 0:19
  Has it ever flooded here?
• 0:21
  What are your thoughts on that?
• 0:23
  And they'll tell you a lot of times you'll go in and they'll say, oh, no, it there was a flood zone here at one point in time.
• 0:31
  I've never seen it flood what, once and not even get close.
• 0:35
  But then other people will tell you, Oh yeah, it's flooded really bad.
• 0:38
  You want to make sure to get that taken care of.
• 0:40
  So I would ask questions, Do your research, look at different news articles and things like that for the area, and that will give you a good sense of what things have happened in the past and what you could probably look for in the future.
• 0:56
  So think about insurance.
• 1:45
  And today I have a very special guest, my good friend J.T.
• 1:49
  Lynch with me. Welcome, JB.
• 1:51
  Hey, thank you for having me.
• 1:53
  So little, but a little bit about JT.
• 1:54
  JT is a commercial insurance broker at Rainmaking Insurance JT is a commercial insurance broker at Rainmaking Insurance with expertise in commercial lines, coverage, and construction risk insurance.
• 2:04
  And today we'll be talking to JT about multifamily insurance strategies.
• 2:09
  So once again, welcome.
• 2:10
  JT I'm excited to have you with me and I want you to start a small little background.
• 2:18
  Wanted to ask you if you can share your brief background with me and what inspired you to become multifamily insurance broker?
• 2:26
  Sure, sure.
• 2:27
  Well, I'll be a brief background.
• 2:29
  I started out an insurance at personal lines with Liberty Mutual, and it really wasn't for me.
• 2:38
  You know, Liberty Mutual is a great company.
• 2:41
  Nothing against personal lines or anything like that that you can you can do very well at that.
• 2:46
  And people need help with that as well.
• 2:48
  But I to me, I'm in it for relationship, just getting having to get ten, you know, auto or home deals a week and then not really ever talking to your clients again that just didn't really sit real well with me.
• 3:04
  So I met Jeff King at actually at a brewery.
• 3:08
  We were meeting up with realtors and he sat down right next to me and we started talking and I mentioned to him kind of my my thinking of that.
• 3:17
  And he goes, Yeah, I've got a spot for you.
• 3:19
  You'll like. You'll like what we do. So and yeah, the rest is history.
• 3:24
  And it just goes to show you, you never know who you're going to meet.
• 3:26
  And if you think, you know, if, if I was a vendor thinking, Oh, I'm not going to sit next to another insurance guy, you know, that's not going to help me at all.
• 3:34
  Well, it did. Right.
• 3:36
  So you never know who you're going to meet at some of these events.
• 3:40
  But he was definitely right.
• 3:41
  I love the relationship of a longer commercial type.
• 3:49
  I, I guess dealing with lenders and all that and then working with not just this project, but your next project coming up and then seeing you at different groups and things like that.
• 4:01
  So that's what I really like to do.
• 4:01
  And then coming on podcast with you, so that that's, this is definitely my, my area where I need to be.
• 4:11
  That's all right.
• 4:13
  I mean, you said it very well, You know, you do not know who you're going to meet.
• 4:17
  So networking is the key.
• 4:18
  Just go out and meet people, make connections.
• 4:21
  I mean, that's the purpose of life anyways, right?
• 4:24
  So yeah, exactly.
• 4:25
  And then the commercial space, it's a it's a longer, a longer play, you know, and you're going to have fewer, fewer clients and things like that.
• 4:33
  But especially with multifamily, it's such a tight knit family.
• 4:38
  Everybody is so helpful and willing to help each other that, yeah, I couldn't ask for anything more and I'm learning along the way as well.
• 4:47
  And I've got some passive investments myself and it's the only thing that made me money last year was my real estate.
• 4:56
  Everything else, my IRAs, even my kids vanguard accounts for their college savings that they lost money, but my real estate investments didn't.
• 5:05
  So I'm starting to do more self-directed did and getting more into it as I go.
• 5:10
  So that's true.
• 5:11
  That's a I mean, investing in multifamily is a solid vehicle, you know?
• 5:14
  But another day people need a place to live regardless, you know.
• 5:17
  Yeah, I would say this recession resistant asset class, you know, if you look at it that way.
• 5:23
  Well, and I don't know anything about the stock market and so do I feel like I know everything about multifamily.
• 5:29
  No, absolutely not. But I know a lot more than I do the stock market.
• 5:33
  And I know, you know, you and others that can help me if I have questions.
• 5:37
  And so if if you everything's going to be a gamble, right?
• 5:41
  But this is less risky than it would be just telling somebody, hey, put my stuff in the stock market and it could just disappear overnight and there's really no explanation and you just have to take it.
• 5:52
  And with a multifamily, there's a tangible property involved.
• 5:56
  And like you said, the people have to live somewhere.
• 5:59
  So you find a place that people are moving to. And I feel like all my clients there, their properties are at 93% occupied and have been for a couple of years now.
• 6:11
  So it's yeah, it's a great space to be in for sure.
• 6:14
  That's true.
• 6:15
  And then it's more like a calculated risk, I would say, and something more tangible you can touch and feel, you know.
• 6:22
  Yeah, I can drive by it. Yeah. And it's still.
• 6:24
  Exactly, exactly.
• 6:26
  And you know, the operators firsthand as well, because you build the lifelong connections with them.
• 6:31
  And then just like working together, it's like a team sport.
• 6:34
  Yeah, like something unknown, you know, Apple and Google investing money.
• 6:37
  You don't know which way the stock is going to go.
• 6:40
  We have to It could be, you know, 100% down belly up and boom, you're gone, Right?
• 6:46
  Or something.
• 6:47
  Not like that. A little bit more reliable, I would say. Right.
• 6:50
  And I always invest with with my clients on a on a deal that I'm insuring.
• 6:56
  And that just helps me and helps them know that, hey, we're we're in this for the long haul.
• 7:02
  And, you know, I want to make sure to get the best options for you because it reflects on me and it's I want better returns too, right?
• 7:09
  So, yeah, it's all around.
• 7:12
  Yeah. Just a great idea.
• 7:13
  So I'm getting getting more and more into it as we go.
• 7:16
  So it's true.
• 7:17
  More confidence in the deal as well, you know. Yeah. Yeah.
• 7:20
  Coming on board because, because you're underwriting the deal as well.
• 7:24
  When something comes to your table, you're looking at the numbers and that gives more confidence to the investors that they're coming from your side of it.
• 7:31
  So let's talk about a little bit about the multifamily insurance.
• 7:35
  How would you define that?
• 7:38
  Multifamily insurance is insurance on your commercial property.
• 7:45
  It's it's one of those things that's necessary to have because, as you know, these accidents do happen at properties, whether it's physical damage to the actual property or one of your tenants or guests gets hurt on the property, you need protection against that.
• 8:02
  So similar to your home and auto policy that you have, everybody has this is for a commercial, you know, larger, larger space.
• 8:12
  And depending on your loan, your lenders are going to have certain requirements that we need to meet, which is which is kind of nice sometimes because you don't have to guess at which coverages or we're going to be right for, you know, your lender is going to tell you we have to have these period.
• 8:29
  Basically it's our property until you have it paid off.
• 8:31
  And this is the way we want it.
• 8:33
  So we always go out to find policies that meet those lender requirements.
• 8:36
  And honestly, those requirements are good to have anyways.
• 8:40
  You want to make sure you have the correct coverages in place so that you're protected.
• 8:46
  A lot of owners will have different risk tolerances.
• 8:48
  Some will want the highest one hail deductible possible, some want the lowest possible.
• 8:54
  But the good news is the lender requirements really kind of narrow it down and say, look like your risk tolerance might be this or that.
• 9:02
  But no, ours is this and this is what we're going to stick to.
• 9:04
  So that that makes it a little bit easier.
• 9:07
  Even though you may both have seen some lenders that may have they're sticklers and they will not budge at anything.
• 9:13
  And that makes it a little difficult, too.
• 9:14
  But but but fun as well. And challenging.
• 9:17
  So so if you just go with the lender that kind of gives you the confidence that you have adequate coverage.
• 9:23
  You do not have to go beyond that.
• 9:26
  How do you get this is the right policy for me?
• 9:29
  Yeah, sure, you can.
• 9:30
  A good example would be if you have a property that's not in a flood zone, but maybe it's really close.
• 9:36
  Maybe you're in an area like Houston and it's not in a flood zone.
• 9:40
  But we all know during Harvey there were areas that weren't in flood zones that ended up flooding.
• 9:45
  So your lender might not require flood insurance, but you're thinking, Man, I it would be really bad if this property flooded.
• 9:53
  What I mean, what are we going to do?
• 9:54
  So you know what?
• 9:55
  JT know, let's add flood insurance just in case.
• 9:59
  Even though my lender's not requiring it, we as a group decided that we want that as well.
• 10:03
  So yeah, there's times that you could kind of go above and beyond what the lender's requiring.
• 10:08
  You definitely can't do less what they're requiring, but yeah, you can certainly do more.
• 10:14
  So talking about Flood, I have seen that some people in Houston area, you know their properties are listed in the flood zone, but they said no, they can remove that from the flood zone.
• 10:25
  How does that work?
• 10:26
  Like is it like a good idea for people to do that or because that way they don't have to they're not required to have flood insurance. Right, Right, right.
• 10:35
  And so it's it's not always going to be the case for every property.
• 10:39
  But a lot of times these FEMA flood maps or whatever technology you're using to determine these flood zones, a lot of them haven't been updated in quite a while.
• 10:50
  And you may both know that there's been a lot of construction in Houston.
• 10:51
  And you may both know that there's been a lot of construction in Houston.
• 10:54
  Things have changed there.
• 10:55
  So your property that was in a flood zone, well, now upstream, they did a whole bunch of work on this new, you know, 5000 house community or whatever.
• 11:05
  Well, net diverted a lot of the water.
• 11:08
  So now it diverted it away from you.
• 11:10
  And so maybe it isn't in a flood zone anymore and they just haven't updated the flood map.
• 11:16
  And so you can get what's called I think is a Loma alum, Alabama, a letter stating that, yes, this is now out of the flood zone.
• 11:26
  As long as you share that with your lender and everyone agrees that, yeah, we're all good.
• 11:29
  No buildings are within that zone, then yeah, you could be taken out of that zone.
• 11:34
  But again, maybe you still want to have flood insurance as well.
• 11:38
  So it just kind of depends on your risk tolerance and really how close maybe how close you are to the next flood zone is really probably what you want to look at. So. Hmm.
• 11:49
  what you want to look at. So. Hmm.
• 11:51
  So what would you look like?
• 11:52
  What are some most effective risk management strategies from your point of view?
• 11:57
  You know, as you say, all you can decide whether you want the flood insurance.
• 12:01
  So now, even though maybe you were in the flood zone for your bad, but now not anymore.
• 12:08
  But do you know how do you have that kind of, I would say satisfaction or peace of mind that 100% insured, you know.
• 12:16
  Yeah, it's hard to know.
• 12:18
  You know, there's there's probably no way that anybody out there is 100% insured on everything.
• 12:24
  Right.
• 12:25
  You're probably not going to have earthquake insurance in Houston.
• 12:30
  But who knows, Maybe, maybe something does happen.
• 12:33
  I don't know.
• 12:33
  The last time there was a tremor in Houston, but we've seen tremors in the Oklahoma area, not near what you would consider like California.
• 12:45
  Right.
• 12:45
  But some people had been known to get earthquake coverage just because of that.
• 12:50
  So it's really hard to know.
• 12:52
  But what I would what I would say is look at the area.
• 12:54
  But what I would what I would say is look at the area.
• 12:55
  What is most likely a natural disaster that is going to affect your property.
• 13:01
  I would talk to neighboring communities around maybe if there's like a shopping center close by, go in and talk to the owners there and say, hey, during the last storm, was there a flood here?
• 13:13
  Has it ever flooded here?
• 13:16
  What are your thoughts on that?
• 13:17
  And they'll tell you a lot of times you'll go in and they'll say, oh, no, it there was a flood zone here at one point in time.
• 13:26
  I've never seen it flood what, once and not even get close.
• 13:29
  But then other people will tell you, Oh yeah, it's flooded really bad.
• 13:32
  You want to make sure to get that taken care of.
• 13:35
  So I would ask questions, Do your research, look at different news articles and things like that for the area, and that will give you a good sense of what things have happened in the past and what you could probably look for in the future.
• 13:51
  So think about insurance.
• 13:52
  So think about insurance.
• 13:54
  You know, this is like sometimes you don't even get the user up and you just paying so much money, just like you're paying for your fears.
• 14:01
  Yeah, yeah.
• 14:02
  That's the way I look at it for the insurance and whether it's a car insurance, your home insurance or whatever insurance you're buying, you're just fearful about something, you know?
• 14:10
  But for the multiple from the asset class, because we are multiple times there are multiple parties involved and that definitely wanted to have insurance.
• 14:17
  But what could be the most creative or innovative way of doing insurance that you're not paying too much either?
• 14:25
  At the same time, I mean, At the same time, I mean, like I said, you're paying for your fears, but you're not fearful at the same time.
• 14:31
  Damages Right.
• 14:31
  I think a great it's a great question.
• 14:34
  And I think the best example of that would be your wind and hail deductibles, depending on where your property is, especially you're talking about Dallas right now.
• 14:45
  It's that we get hailstorms all the time in Dallas.
• 14:48
  And so these hailstorms sometimes have, you know, a softball sized hail that do a lot of damage to these roofs.
• 14:55
  And we can count three or four storms a year that come through and we'll hit roofs.
• 15:01
  Some won't be, you know, hardly anything and some will be pretty big.
• 15:06
  But knowing that, okay, we need to have good wind and hail coverage and probably a lower deductible in case the storm comes through.
• 15:14
  And I need a new roof.
• 15:15
  I want to pay as little as possible for that new roof. Right.
• 15:18
  So then you pay a lower deductible, get a new roof.
• 15:21
  But what if you just put on a new roof last year?
• 15:23
  Mm hmm.
• 15:24
  Well, these roofs are going to withstand for a good 10 to 15 years.
• 15:29
  If not more nowadays.
• 15:31
  So if you've got a brand new roof last year, maybe you can withstand a little higher tolerance for a higher wind hail deductible.
• 15:40
  And that will save you some money this year.
• 15:42
  So if you have an older roof, though, and you know, the next storm that comes through is going, you're going to need a new roof.
• 15:49
  Then you probably want a lower deductible so that you don't have to pay as much out of pocket to get that new roof.
• 15:55
  So I think knowing your property, knowing the risks that that are that are potential to come through is key and having the peace of mind, but also saving as much money as you can as well.
• 16:09
  So yeah, the thing for me is and please don't get offended and I was just like.
• 16:13
  I don't know. You, you are paying the premium, right?
• 16:17
  And for your insurance and then you're paying the deductible.
• 16:20
  And once your claim made by insurance prices go up.
• 16:24
  Yeah.
• 16:24
  So what do you have to say about that?
• 16:26
  You know, how could be You're so creative that you are saving some money because it's like, you know, if you look at the whole picture holistically, you're end up paying more money.
• 16:36
  And just because you're fearful about something, it might happen and it might not even happen.
• 16:42
  And what if you just take all that money that you're paying to the insurance companies and put in an account, set it aside, or maybe invest in real estate and just get a better capital return on that.
• 16:54
  So and then whenever you need it, use that power that analogy work, because I heard somebody talking about it.
• 17:00
  That's what I wanted to share with you.
• 17:02
  Yeah, I've heard some.
• 17:05
  Usually we'll see it with bigger corporate type firms that are buying a whole a whole bunch of properties.
• 17:10
  And so then they have this huge fund set aside just for insurance.
• 17:16
  I believe in their case, they've not they don't have certain lender requirements that that maybe another multifamily operator might have that they can kind of get away with that.
• 17:28
  I think if you're getting a Fannie or Freddie loan, I don't know if they would would let you do something like that.
• 17:33
  But certainly if you're a bigger operator and you don't have those type of loans, yeah, it would be something to look into for sure.
• 17:39
  I know a lot of people in Florida right now because the deductibles are so high for like your name storm.
• 17:45
  If if a hurricane comes through, they feel like they're self insuring anyways.
• 17:50
  And so.
• 17:50
  All right, well, let's just have a even higher deductible and I'll just set money aside since I'm self assuring insuring anyways so you know it's it's a gamble.
• 18:01
  It really is a gamble.
• 18:02
  I get what you're saying is, you know, I've spent all this money and I don't even use it.
• 18:06
  That's, that's a good thing, right?
• 18:09
  Nothing happened to your property and that's one thing that will, as an agency, you know, we're a full service agency, so we help manage your account after the after its bound.
• 18:21
  So say you have a small kitchen fire and you're at your property.
• 18:26
  It looks really bad.
• 18:27
  We need to make a claim.
• 18:29
  Well, I'll advise you.
• 18:31
  Look, your deductible is $25,000 for this.
• 18:35
  All other perils, you know, claim that you're going to make.
• 18:39
  How much damage is really there?
• 18:41
  I know it looks really bad, but, you know, sometimes you small kitchen fires, it looks really bad.
• 18:46
  But when you sort through things now, actually it's, you know, $15,000 and it will be back in order.
• 18:53
  You know, or maybe it was $25,000 or $30,000.
• 18:58
  And then I'll say, thinking that, you know, you're not you're not going to get much out of this claim once you put it in, and then that that claim is going to be, you know, tied to this property for the next five years.
• 19:10
  It's probably not worth it to put it in there.
• 19:13
  So in that case, no, you would pay out of pocket for that.
• 19:16
  And let's wait and use a claim when ma'am, this is going to cost hundreds of thousands dollars.
• 19:23
  We don't have the money to pay for that out of pocket.
• 19:26
  Let's make the claim and then we'll have the insurance company take care of that. So it's it's a it's kind of a gamble.
• 19:35
  It depends on the situation, but it's definitely something that we help you with if and when that time happens.
• 19:43
  And I think I like that, actually.
• 19:43
  Let's talk about the claims.
• 19:45
  Since we're talking about claims, you know, how do you process the claims or what would you your advice would be for me or my listeners what would you your advice would be for me or my listeners that, you know, when you're filing a claim, what do you should look for that, you know, when you're filing a claim, what do you should look for so that you can make the maximum out of it?
• 20:01
  So one thing that I, you know, I want to stress to everyone is if something happens, you know, make sure that that everything's addressed right away. Right. You've you've got the authorities out there.
• 20:13
  You've got your property management company documenting everything.
• 20:18
  You've got the area roped off and safe.
• 20:21
  You know, make sure to take care of your property first.
• 20:24
  We can put in a claim sometimes, you know, up to more than a year past the occurrence. Right.
• 20:31
  So you don't have to do it the day after, right?
• 20:34
  You want to let me know so I know what's going on.
• 20:38
  But take care of all of that.
• 20:40
  Those things first have everything documented.
• 20:42
  And then I'd even say, get get a contractor out there.
• 20:46
  Take a look at the damage.
• 20:48
  Let's let's assess how much damage there actually is before deciding to put in a claim or not.
• 20:54
  I'm not a contractor.
• 20:56
  So looking at a small kitchen fire, I may go big.
• 21:00
  I think you're right.
• 21:00
  This is this seems like a lot.
• 21:02
  But then a contractor looks at it goes, No, no, we're 20 grand.
• 21:06
  We'll be okay. Right?
• 21:07
  So once you get that estimate, then you'll really know how much damage you're dealing with.
• 21:13
  I'll advise you on what the deductible is if you don't know.
• 21:16
  And then and then we can make an educated decision based off of that and then put in the claim that we need to.
• 21:22
  But there's there's not really no sense to to hurry into that before we we have more information about kind of what happened and what what is going to go into it.
• 21:31
  But then, you know, we decide to put in a claim or notify the carrier that, hey, this incident happened.
• 21:38
  Here's the claims report that you have from the property management company, anything from the fire department or police department or give to them.
• 21:48
  And then at that point, I'm kind of my job is to kind of just make sure that every everybody's in communication with the claims adjuster that would then contact you.
• 22:01
  And I don't have much say from there, but I am there to kind of hold your hand and make sure that everything is communication is going back and forth that way. So.
• 22:12
  You know, when I was talking to our public adjuster, I'll give you this back and then he mentioned that if something happens to your property or whatever, it's always a good idea to have a public adjuster along the side of the insurance agent, you know.
• 22:28
  So what is your thoughts on that?
• 22:30
  Like, would you recommend to have a public adjuster because they can look into things a little bit more minutely?
• 22:36
  Yeah, it's a good question for us.
• 22:41
  You know, we represent you, okay, You're the client and we help bring carriers to you to find the best option.
• 22:49
  Right?
• 22:50
  And so then we kind of represent them both.
• 22:53
  But, you know, I'm not beholden.
• 22:56
  A lot of people think, oh, J.T.
• 22:58
  doesn't like public adjusters because they're anti insurance or whatever.
• 23:02
  I don't know. I don't I don't think one way or the other.
• 23:06
  I think it is a good idea to to know one.
• 23:08
  I've got several here that I can refer you or them to you.
• 23:12
  So I think it depends on the claim because as you know, these public adjusters, they don't they're not working off of charity.
• 23:20
  Right. They're not working for free. So their job is to make sure that the claim works smoothly, but also that you get the maximum amount for that claim out of it.
• 23:33
  Well, that maximum amounts also goes to pay them, too.
• 23:38
  So, I don't know, maybe the claim was going to pay it at $90,000 and they got you $100,000 instead, but now you owe them 15.
• 23:49
  So did you need that person there necessarily?
• 23:53
  Or maybe not, You know, so I think it really depends on the situation.
• 23:56
  I think the larger and more complicated the claim definitely warrants a public adjuster, but something smaller, like the small kitchen fire we were talking about earlier, probably not.
• 24:07
  It probably wouldn't warrant paying somebody else when with this is a pretty simple cut and dry.
• 24:15
  There was a small kitchen fire.
• 24:16
  It's going to cost $50,000 for putting in your deductibles.
• 24:21
  25,000. You get 25,000 back.
• 24:23
  Basically, that that that's pretty simple, right?
• 24:26
  So I think it would depend on the nature of the claim.
• 24:30
  But certainly, yeah, have to have one at the ready that you know and trust and can call in if something gets weird because certainly you want you want all the resources you can on your side when, when unless that happens.
• 24:44
  Mm hmm.
• 24:44
  And I think basically it's like a trade off because if you do not have the time or the bandwidth to do things on your own, you might want to get somebody on board because you're paying somebody else to be your eyes and ears to something great to to work in barter in your favor, but not necessarily.
• 25:05
  It's going to happen all the time.
• 25:06
  So at this point, I'm going to ask you about some of the misconceptions or the myths about the multifamily insurance that people might have or how do you address those? Is somebody bring that up to you there?
• 25:21
  Sure.
• 25:22
  You know, you can share one.
• 25:23
  Yeah, I think the claims adjuster is a good one.
• 25:25
  And to get back to that real quick, I've seen some times where they hire an adjuster and they do help, but when an adjusters hired, I'm kind of I don't know how to explain it at that point.
• 25:39
  don't Questions for me would then need to be addressed towards the adjuster because we try to simplify things.
• 25:46
  And you've hired the suggestion that is now speaking to the claims adjuster on your behalf.
• 25:52
  So I'm kind of taking out of it altogether.
• 25:55
  And I've seen some cases where they hired adjuster and they really didn't do much.
• 25:59
  And it's like I could have answered, I could have done all of these things for you.
• 26:01
  I've got to answer these things.
• 26:04
  And we will go back and forth with the claims adjuster and, you know, plead your case as best we can for you as well.
• 26:12
  Is there a lot there's a lot of things that we do as well for you.
• 26:16
  So the claims adjuster is not always the best option, but, you know, sometimes is definitely necessary.
• 26:24
  We think it's going on.
• 26:25
  The other misconception and it could be, you know, like it's hard to get hold of the insurance company.
• 26:32
  You given, you know, something goes wrong and they're just like not together.
• 26:38
  You know, It's like that's why we wanted to have some mediator or some adjuster in the middle.
• 26:44
  Right. Right.
• 26:45
  And I think a lot of people get that because of their experience with maybe their personal auto.
• 26:51
  You know, they were in Iraq and now it's a nightmare trying to get a hold of somebody that, you know, a lot of that has to do with.
• 27:00
  Well, that's because you have to do it on your personal time.
• 27:03
  And you don't have time because you got to work and you get to do all these other things.
• 27:06
  But for us, this is this is my full time job.
• 27:09
  So, no, we will make sure that you get in touch with the correct people.
• 27:14
  The the carriers that we work with, they're all A-plus rated.
• 27:19
  Really haven't had a ton of issues with communications and things like that.
• 27:25
  Is there sometimes discrepancy of.
• 27:28
  Well, no, I think it should be this.
• 27:30
  My contractor told me this and you're telling me this. Sure.
• 27:33
  That that's going to happen.
• 27:34
  But really, communication is no, these people are pros.
• 27:39
  And yeah, this is a lot different than your, you know, small.
• 27:44
  Claims.
• 27:44
  Auto policy, you know, And yeah, I will say that it seems like nothing in insurance happens very quickly.
• 27:53
  So don't expect things to happen necessarily overnight.
• 27:57
  If you had a claim and you get a payout, you're probably not going to get it overnight, Right.
• 28:02
  So just be patient with the process.
• 28:02
  It's it's being handled.
• 28:06
  It's got so many checks and balances it has to go through.
• 28:10
  And the claims adjuster, a lot of times it may be a third party.
• 28:14
  They just they just enter their report and they send it off.
• 28:18
  And then it's got to go through, you know, the chain of command to to check off different things like that.
• 28:23
  So, you know, and then it a check actually coming to you.
• 28:26
  It may take several months.
• 28:28
  That doesn't mean that it's not going to happen, doesn't mean that there's anything wrong.
• 28:33
  It's just that's kind of how the process is.
• 28:35
  And unfortunately, it's it's longer than what everybody wants.
• 28:39
  And I understand that. So.
• 28:41
  So what would you recommend are tell your clients when somebody comes to you to get a policy, what kind of things they should be paying attention to.
• 28:52
  The policy is basically decided or dictated by the lender because they want certain policy to be in place, because it's understood, because they're the one who are lending the money on it.
• 29:02
  So they want to make sure that their money's covered.
• 29:04
  They're covered so They're covered so but at this point, you know, premium could be high or, you know, there could be a bunch of other things.
• 29:11
  What do you generally recommend?
• 29:14
  So before so say say before you even submit your alloy, Right.
• 29:22
  I want to know what what does this the insurance look like in this area?
• 29:26
  Maybe you're you know, you're looking in Dallas for the first time and you're from Houston investing in Georgia or North Carolina or whatever.
• 29:34
  It's going to be quite different in Texas or Florida than it is in those states.
• 29:42
  I would contact me first.
• 29:45
  I will give you a free insurance estimate on that property you're looking to put an LLC on.
• 29:51
  I just did the rent roll the T 12 and the offering memorandum if you have it.
• 29:55
  And then I can We've been doing this so long that we might insure the property already or we have before probably know the brokers that are on it.
• 30:05
  And so we probably have a little bit more information than you even have.
• 30:09
  But basically the the property that you're looking at all look at like kind of properties that we're we insure in the area and based off of those insurance premiums, I can get you much closer than usually what the T 12 says.
• 30:24
  But then I would also if if I were buying a property, I would make sure to know what are the big natural disasters, what are the risks that that can come through in this area.
• 30:37
  You know, if you're in Phenix, there's there's not many.
• 30:40
  Right.
• 30:41
  But, you know, Dallas, we're looking at hailstorms, tornadoes.
• 30:48
  We don't get hurricanes, but we definitely get the effects from the hurricanes that come in from the Gulf.
• 30:52
  So high winds and things like that, thunderstorms all the time.
• 30:57
  Florida is a mess.
• 30:59
  So you want to make sure to just know the areas that you're looking at.
• 31:04
  And one thing that gets overlooked is, is crime, your general liability, The rate for those are going to be based off of the the crime scores in the area.
• 31:16
  And I know if you're looking anywhere around Atlanta, it seems like anywhere around Atlanta has high crime scores.
• 31:23
  That doesn't mean no by the property.
• 31:24
  Just know that, hey, that the general liability policies that we get are going to be a little bit higher than maybe what you're used to seeing.
• 31:33
  And maybe we need to look into some CapEx items to help the safety of the property, improving the fencing, lighting and things like that for your tenants.
• 31:44
  I think that sometimes and I talk about this all the time, that there's so much to know about underwriting these properties that you get kind of lost in the the spreadsheets.
• 31:55
  There's just numbers going all over the place.
• 31:58
  Well, you also need to look at the property as well.
• 32:01
  I can't tell you how many times somebody has got this property under contract.
• 32:06
  They're going to spend $28 million on this thing.
• 32:09
  And I ask him, you know, congratulations, I need to know a few items.
• 32:13
  You know, how old is the roof? Oh, I have no idea.
• 32:16
  Okay.
• 32:16
  Well, that would you would want to know that, right?
• 32:20
  Because if, like we said before, depending on your deductibles and things like that could be your first $500,000 mistake if you needed a brand new roof, the next storm that comes through.
• 32:30
  So I think taking your nose out of the the spreadsheets, really looking at the property as this somewhere that you would take your family at midnight. Now.
• 32:40
  Okay, Well, let's address that and make sure that the property safe for your tenants Is the roof very old and it's something you're going to have to replace pretty soon after you acquire it, then?
• 32:53
  Yeah, then let's let's have a plan in place for that.
• 32:56
  And a lot of owners, as you know, they'll already put$150,000 aside to fix that roof here in the next couple of years.
• 33:05
  They just have that plan in place already.
• 33:07
  So I really take a look at the property, the future, things that that could go wrong that you may need to fix.
• 33:16
  So it doesn't surprise you later on.
• 33:18
  I think that the biggest thing that I would look to look into before buying a property, awesome.
• 33:24
  I think you've mentioned so many good things.
• 33:26
  So I'm pretty sure people who are listening, they might think about improving their insurance coverage at this point.
• 33:32
  So what kind of advice would you give to the people who might be listening to you wanting to think about improving their insurance coverage or the risk management for themselves?
• 33:43
  Yeah, improving your insurance coverage depending on where you are.
• 33:48
  But, you know, this year has been extremely challenging for insurance.
• 33:52
  We've seen premiums increase for a number of different reasons.
• 33:57
  It seems that it's getting harder and harder for insurance brokers to find the best fit.
• 34:05
  And if you're not, if your agency isn't really it's not really their thing to write multifamily insurance.
• 34:15
  They can do it, but they don't do it all the time.
• 34:18
  Then maybe they don't have the best fit for you, whereas in previous years, Yeah, yeah, this will be fine for us.
• 34:26
  98% of my my clients are all multifamily.
• 34:29
  I do have other clients that we insure contractors, roofing companies, trucking companies, you name it, we can do it all.
• 34:38
  But 98% of my clients are all multifamily.
• 34:42
  And so all day long all I'm doing is multifamily insurance.
• 34:46
  So we've got the relationship with all these carriers that will that will ride it.
• 34:51
  We're another agency that doesn't do that.
• 34:53
  Maybe maybe they don't have the markets for it.
• 34:57
  And it seems like this year especially, it's just getting so much more tough to find the right fit that, yeah, you really need that expert to make sure that they've got the best options for you.
• 35:09
  So I would say find a broker that you know is in the space that you trust them and make sure that you're you're with them and not just with your brother in law that owns an agency.
• 35:22
  Because right now it's it's really hard to find the right policies for you.
• 35:27
  Right.
• 35:28
  So how do you stay on top of the innovations and the insurance So how do you stay on top of the innovations and the insurance or some kind of emerging trends, like I heard about cyber insurance, or some kind of emerging trends, like I heard about cyber insurance, you know, there's so many cyber attacks, is part of the general policy as a like something add on are if you heard about that if you can you.
• 35:46
  Know a lot of times that will be a part of the policy, but there'll be disclaimers in there.
• 35:53
  So it'll have, you know, maybe a $25,000 for your cyber data.
• 36:00
  But there's an exclusion if a member of your team were to steal money or steal data from you.
• 36:07
  So it'll protect from outside sources, but won't protect you if there's theft from inside the group.
• 36:11
  And it just depends on the policy.
• 36:15
  But a lot of times, yeah, that is included nowadays.
• 36:20
  And yeah, it's something that you want to ask.
• 36:23
  But then, you know, if you've got a good property management company that that's, that hired and it's, you know, a pretty big outfit, they're going to have protection as well.
• 36:33
  And they're usually the ones that deal with a lot of the, the data and the money changing hands.
• 36:37
  So maybe it's not as important to you because, you know, the property management company has has that coverage.
• 36:45
  Yeah.
• 36:46
  And we have to you want to you know, you want to make sure that you're added as an additional insured onto their policy and that they're properly insured as well.
• 36:57
  So that's that's another big piece of the pie there too.
• 37:01
  So the question was like how do you stay on top of all these changes in the insurance policy or the insurance companies?
• 37:09
  Yes, day to day.
• 37:11
  That is a great question.
• 37:12
  And that's the answer is it's very hard.
• 37:15
  It seems like it changes all the time, but just like you and I go to conferences to to meet investors, there will be other insurance brokerages.
• 37:27
  There as well.
• 37:29
  And again, you would think, oh, it's what, 80 doesn't he doesn't want to see them there, right?
• 37:33
  He doesn't it's not good for his business sometimes.
• 37:37
  That's the first boost that I go to are the other insurance guys and gals, because they we share information just like everybody else in the space.
• 37:47
  There's enough business to go around and we actually help each other as well.
• 37:51
  There's an agency in Georgia and they've got access to somewhere that that for some reason I can't get a hold of or I've never heard of this small carrier that does this or that.
• 38:01
  I can call them and see if they can help me. Right. So I'll use them for just to see what they're hearing.
• 38:10
  Listen to a lot of articles and then we just like anything else, stay close to our underwriters that the different carriers would go to.
• 38:19
  We'll take them out to dinners, wine and dine them and pick their brains because they're the real ones.
• 38:26
  Taking a look at these risks for us.
• 38:29
  And they're the boots on the ground really, to know what kind of trends are coming.
• 38:34
  So we try to stay as close as we can using every possible resource we can as well.
• 38:40
  And it's yeah, sometimes it's a moving target, it feels like.
• 38:44
  But you know, at the end of the day, it makes it challenging and fun.
• 38:47
  And if it were just the same every day, then, you know, it would be be kind of boring. So it is kind of neat to see things changing in different markets that open up and we get all excited.
• 39:01
  Now they're in Texas now let's call them.
• 39:04
  Remember, they're in Texas.
• 39:04
  So that's that's neat as well.
• 39:07
  Oh, nice. Thank you.
• 39:07
  So we are out of time.
• 39:10
  I'm going to ask you one golden nugget for my audience.
• 39:13
  Okay.
• 39:13
  My one golden nugget for my audience.
• 39:15
  Let me think.
• 39:17
  Let me think.
• 39:17
  So here's something that's pretty interesting.
• 39:19
  So right now, we've been kind of doing this for years, but right now it is almost standard in almost standard in coastal markets that carriers, they just do not want to write certain properties.
• 39:34
  So they it limits the amount of places that we can go.
• 39:37
  Maybe there's only usually five carriers that we can even talk to.
• 39:41
  But most of these carriers, they'll say, I'll write it, but I won't write the whole thing.
• 39:46
  I will write the property coverage without wind and hail.
• 39:50
  So then we have to go to somewhere else that will write the wind and hail coverage and maybe they'll say, I'll write the wind and hail coverage, but not all of it.
• 39:57
  I'll just write the first 50% or the first, you know, first hundred thousand dollars worth of coverage.
• 40:03
  And then we got to find somewhere else to go to cover that.
• 40:07
  Then we had to find somewhere else to go for the general liability. And so so that that is mind boggling to some people when I explain that to them.
• 40:16
  Yeah, sometimes there is, you know, seven different carriers that are insuring this one property because that's that's what we have to do now.
• 40:25
  It is so tight that we have to get insanely creative to find the right fit and piece this all together to make it work.
• 40:33
  So that that's my golden nugget of the day and that's what's keeping us busy for sure.
• 40:37
  That's good.
• 40:39
  So this brings us to our rapid fire round.
• 40:41
  I'm going to ask you five questions you have to answer in one word or one sentence only.
• 40:47
  Okay, I'm ready.
• 40:49
  So the first question is what is one of the what?
• 40:51
  or is the one most important thing that you learn in life?
• 40:55
  And it always work for you after learning it.
• 41:00
  And it always work for you after learning it.
• 41:00
  Be happy in the moment.
• 41:03
  I love that.
• 41:04
  That's awesome because every moment, if you're happy, the next moment is going to be happy too, because your present moment is dictating your next moment.
• 41:13
  My so my son plays basketball and I was sitting next to his teammates grandfather he's got to be late eighties nineties but just a joy to talk to and he told me that growing up he had like five daughters and they were you know all within a year of each other.
• 41:38
  And he said, I don't know how I did.
• 41:40
  I've been to so many basketball games and volleyball games and all these things.
• 41:45
  I don't know how we managed to do it.
• 41:47
  I don't know how we managed to afford it.
• 41:49
  And it seemed so hard then.
• 41:51
  And he said, looking back now, it was the best time of my life.
• 41:56
  And I wish then I knew that this would be the best time of my life and I would have appreciated a little bit more so that just it always gets to me.
• 42:06
  It's like, now, now this.
• 42:08
  These are the good times.
• 42:09
  And I always keep reminding myself, you, no, don't look for the good times.
• 42:13
  These are the good times.
• 42:14
  I agree with you 100%, because the present moment is the best time that you have.
• 42:19
  That's the only time that you have actually in there.
• 42:21
  Like because the past is gone, you have no control over future.
• 42:25
  You don't know or you think that you have a present right now, right this minute.
• 42:30
  These are yeah, these are the good old days.
• 42:32
  So yeah, let's live like it.
• 42:34
  So if you, if you miss this moment, you miss the whole life, you miss living that moment right.
• 42:40
  What's going to happen is in the next moment, you're going to be regretting the past.
• 42:42
  Oh, I didn't do this.
• 42:45
  Yeah, I think there's. In future I will do that again.
• 42:45
  Yeah, there's.
• 42:45
  There's some more important things.
• 42:47
  There's times where we regret so much that we don't live in the present.
• 42:52
  And then there's times we look forward to.
• 42:55
  Or I can't wait til you know.
• 42:55
  And you don't live in the present.
• 42:58
  What about now? You know most you know.
• 43:01
  So share one good book that you have read and you feel like, you know, you wanted to recommend this to my audience.
• 43:08
  you know, you wanted to recommend this to my audience.
• 43:09
  I'm trying to not to be so cliche, but I think how to win friends and influence people.
• 43:15
  It's an old one. But but a great book.
• 43:18
  It is a great book.
• 43:19
  In one word, what does life mean to you, Joy?
• 43:22
  In one word, what does life mean to you, Joy?
• 43:24
  I like that.
• 43:25
  What is your biggest passion?
• 43:29
  My family, my kids.
• 43:31
  I like that.
• 43:32
  If you could turn back in time and talk to your younger self, what would that be and why?
• 43:35
  and talk to your younger self, what would that be and why?
• 43:39
  I would tell myself not to sacrifice my my happiness for for a certain job.
• 43:44
  I would say, Go, go find out what you want to do.
• 43:48
  If you're not happy in what you're doing, get out of there. Go find something else.
• 43:51
  Be happy too.
• 43:52
  Life's too short, not too to be doing something you don't want to do.
• 43:56
  No, I like that.
• 43:58
  You always should do whatever you love.
• 44:00
  Not otherwise, you know.
• 44:01
  You just cannot be miserable all your life.
• 44:04
  And you do what you love.
• 44:04
  You're never working.
• 44:07
  Yeah, and I don't.
• 44:09
  I don't necessarily like the whole, you know.
• 44:12
  Well, what's your what's your hobby?
• 44:12
  What do you like to do?
• 44:16
  And then just go do that. Well, now, what is your hobby? Basketball.
• 44:20
  Why can't go play basketball for a living?
• 44:22
  So that that's not a good, good answer, right?
• 44:24
  I think finding something that you actually enjoy doing and you don't regret, work it.
• 44:29
  You know, if you're on Sundays, if you're getting those pits in your stomach because you don't want to go to work on Monday, there was something's wrong.
• 44:36
  Maybe you need to find something where you don't feel that way, you know, and life's too short just to do that because of a paycheck.
• 44:42
  Go find something else.
• 44:43
  There's there's so many things out there that you you have no idea that you might love.
• 44:49
  And just don't be afraid to find something better.
• 44:52
  Yeah, you said it very well, because the thing is, in this whole race, people forget to laugh.
• 44:58
  Yeah, And there comes your end and you just feel like, Oh, I didn't even live.
• 45:02
  I was just chasing the money.
• 45:02
  I knew that all my life.
• 45:05
  You be 87 years old at your grandkids basketball game. Go.
• 45:09
  What was I doing?
• 45:09
  I should trust this or that. Yeah.
• 45:13
  So, Jamie, how can people reach out to you?
• 45:16
  The easiest way is through my email at Lynch Y and at Ray meeting dot com.
• 45:22
  Thanks, Judy.
• 45:23
  It was a wonderful conversation today.
• 45:25
  Yeah, I had fun. Thank you for having me.