Want to get into the business of repositioning apartment buildings? You’re going to spend a ton of time working with insurance brokers.
Why?
Well, consider what happens when you buy a building:
- You need a standard policy for the period between closing on the building and the beginning of construction;
- Then, you need a construction policy for the period during which you’re doing the work; then
- You need a new, standard policy once lease-up begins, one that reflects the new (hopefully enhanced) value of the building
Doing the above for one or two buildings at a time is no big deal. But try doing it for 10-15 projects simultaneously and you learn, very quickly, how hard it is to keep everything straight.
Very fortunately for us, we stumbled upon a great brokerage on our very first deal and have been using them (together with a few others) ever since.
Will I give you the name? No, I will not… in this business, every little 1% advantage is important.
But I will tell you that you should absolutely interview several brokers and, once you choose one, periodically get some quotes from competing brokers to make sure your guy stays honest.