Episode #39: How Home Insurance Shock is Hurting Residential Investors

[00:00:00] [SPEAKER_02]: Who would have thought that insurance would be such a sexy topic?

[00:00:04] [SPEAKER_02]: And they're like, do you know Sean Mooney and I said I do and they're like, is that who you're working with?

[00:00:09] [SPEAKER_02]: I'm like, it is. They're like, now I really don't want to talk to you.

[00:00:15] [SPEAKER_00]: If I wasn't, could holy committed of getting out of this deal?

[00:00:18] [SPEAKER_02]: I'm like, oh my gosh, I'm totally, I said this.

[00:00:21] [SPEAKER_02]: I talked to my client on my office so sorry.

[00:00:23] [SPEAKER_02]: I can't believe I suggested this.

[00:00:24] [SPEAKER_02]: Oh, no, Shane, Mooney, insurance.

[00:00:28] [SPEAKER_02]: There's two ease at the end. It's not EY.

[00:00:39] [SPEAKER_02]: Welcome to the podcast dedicated to real estate insurance and building your business.

[00:00:45] [SPEAKER_02]: Join us as we take you along our own business building journeys with additional wisdom from our network of local and national experts.

[00:00:54] [SPEAKER_02]: Welcome to Bricks and Risk.

[00:01:00] [SPEAKER_02]: Hey everyone, welcome to another episode of Bricks and Risk.

[00:01:05] [SPEAKER_02]: Optimum. Guarity.

[00:01:06] [SPEAKER_02]: And I'm Sean Mooney.

[00:01:08] [SPEAKER_02]: What's up, man? How are we doing? Good.

[00:01:11] [SPEAKER_02]: And before we get into it today, we're going to read another review.

[00:01:18] [SPEAKER_02]: Ooh, one of our fans.

[00:01:20] [SPEAKER_00]: One of our acclaimed listeners.

[00:01:23] [SPEAKER_02]: Yes. And if you're watching under a listening,

[00:01:25] [SPEAKER_02]: you can actually write in reviews.

[00:01:27] [SPEAKER_02]: If you go to Apple Podcasts, other places a little bit harder.

[00:01:29] [SPEAKER_02]: So I'm going to read it.

[00:01:30] [SPEAKER_02]: This is from Gump to 15.

[00:01:34] [SPEAKER_02]: Gump.

[00:01:34] [SPEAKER_02]: You got one.

[00:01:35] [SPEAKER_00]: Sounds like a very, um, right man.

[00:01:38] [SPEAKER_00]: Sounds like it was made up like an intellectual type.

[00:01:41] [SPEAKER_02]: So it says, listening into the first few podcasts and I'm laughing a ton, but learning a lot.

[00:01:48] [SPEAKER_02]: Great listen for anyone trying to grow their business or influence.

[00:01:52] [SPEAKER_02]: Might be focused on real estate and insurance,

[00:01:55] [SPEAKER_02]: but relevant perspective for any industry.

[00:01:58] [SPEAKER_02]: Get an iPhone, Sean.

[00:02:00] [SPEAKER_02]: So this is a really Gump to 15.

[00:02:05] [SPEAKER_02]: Yes, fortunately it's true.

[00:02:06] [SPEAKER_00]: Oh, he did write that.

[00:02:08] [SPEAKER_00]: All right. What do we get into today?

[00:02:09] [SPEAKER_00]: Did I say best listener?

[00:02:11] [SPEAKER_00]: I meant worst listener.

[00:02:15] [SPEAKER_00]: I love it.

[00:02:17] [SPEAKER_00]: Today's episode is brought to you by...

[00:02:22] [SPEAKER_00]: I don't know.

[00:02:23] [SPEAKER_00]: Oh, Bay.

[00:02:24] [SPEAKER_02]: Oh, Bay.

[00:02:25] [SPEAKER_02]: And lock alone.

[00:02:26] [SPEAKER_02]: Yo, Bay, if you're watching under a listening,

[00:02:29] [SPEAKER_02]: this guy's a walking billboard for you.

[00:02:31] [SPEAKER_02]: Once or twice, I think I've just a few times.

[00:02:36] [SPEAKER_00]: Today's episode, we are going to go heels in on a duo.

[00:02:42] [SPEAKER_00]: How nice.

[00:02:44] [SPEAKER_00]: I love this.

[00:02:45] [SPEAKER_00]: So what we're going to talk about is insurance and real estate.

[00:02:52] [SPEAKER_00]: And both markets and how they're intersecting specifically around the topic of

[00:02:59] [SPEAKER_00]: investments and building portfolios, and kind of how the two are going to play off of

[00:03:03] [SPEAKER_00]: the other.

[00:03:04] [SPEAKER_00]: Awesome.

[00:03:05] [SPEAKER_02]: Yeah.

[00:03:06] [SPEAKER_02]: Cool.

[00:03:06] [SPEAKER_02]: This is probably one of our first episodes where we're literally taking both of our respective

[00:03:11] [SPEAKER_02]: industries.

[00:03:12] [SPEAKER_02]: We found a really great topic.

[00:03:14] [SPEAKER_02]: We're trying to meld them together so that people can learn a little bit about both.

[00:03:17] [SPEAKER_02]: And I love this one because it really focuses on real estate investors in the US

[00:03:24] [SPEAKER_02]: and how insurance is starting to affect their portfolio.

[00:03:30] [SPEAKER_02]: Not only that, this is for people looking to buy real estate today.

[00:03:34] [SPEAKER_02]: When you purchase real estate again, we're always running numbers, at least I'm helping

[00:03:38] [SPEAKER_02]: investor clients run numbers most of the time they're running their own numbers.

[00:03:41] [SPEAKER_02]: And insurance is going to be a line item because when they look at their carrying costs

[00:03:45] [SPEAKER_02]: for whatever they're looking to buy insurance is part of it.

[00:03:50] [SPEAKER_02]: And I will say, I'm guilty of this that when I do closing cost estimates whether they're

[00:03:55] [SPEAKER_02]: investor client or buyer.

[00:03:56] [SPEAKER_02]: I just thrown a rough number.

[00:03:58] [SPEAKER_02]: One fifty two hundred a month for insurance and that's not the case these don't do that.

[00:04:03] [SPEAKER_00]: Make it out an exercise or a practice.

[00:04:08] [SPEAKER_00]: If you don't want to reach out to someone and you don't want to do the legwork because

[00:04:13] [SPEAKER_00]: it's either step on someone else's toes or for whatever reason, have your client

[00:04:19] [SPEAKER_00]: do the diligence beforehand.

[00:04:23] [SPEAKER_00]: Because you don't want that surprise where it's, oh Tim, you have a line item here for

[00:04:31] [SPEAKER_00]: $1,200 a year and it winds up being 2850 a year.

[00:04:37] [SPEAKER_00]: I mean, and what we're seeing now is like, here's a go, you could come to me with a property.

[00:04:43] [SPEAKER_00]: And I tell me where it's at, tell me what the purchase price is and a couple other

[00:04:48] [SPEAKER_00]: items and I would get you into a real tight circle of where that's going to land.

[00:04:55] [SPEAKER_00]: Right, and what the amount is right now it's like it could be in between this and

[00:05:01] [SPEAKER_02]: it can be in between that scale based on those little details of the deal itself,

[00:05:07] [SPEAKER_02]: the home let's call because this is more we're talking about residential homes here.

[00:05:10] [SPEAKER_02]: When I'm really even talking about huge apartment buildings, that's where it gets even

[00:05:13] [SPEAKER_02]: a lot of information.

[00:05:14] [SPEAKER_02]: Why that's, while that's being affected, let's focus on this survey, which there

[00:05:19] [SPEAKER_02]: was a recent survey through Rezy Club, which focuses on US housing data and ground floor,

[00:05:26] [SPEAKER_02]: which is an investor syndication platform.

[00:05:30] [SPEAKER_02]: This people looking to like invest smaller amounts of money and bigger projects all throughout

[00:05:34] [SPEAKER_02]: the country.

[00:05:34] [SPEAKER_02]: Yep, and they want to make returns on it.

[00:05:36] [SPEAKER_02]: So look at in a real estate exposure for anyone.

[00:05:40] [SPEAKER_02]: Like, if you've ever heard of fund rise, it's basically like, hey, I got $3,000, $10,000.

[00:05:46] [SPEAKER_02]: I want to put it into fund rise or ground floor and want to be part of a development

[00:05:50] [SPEAKER_02]: or a building or a project that pays me returns every year.

[00:05:56] [SPEAKER_02]: So in the survey, it said 80% of investors are concerned about home insurance increases.

[00:06:03] [SPEAKER_02]: This is like 80% that we're surveyed, say, while maybe it was one or two at a

[00:06:09] [SPEAKER_02]: 10, let's say two years ago, 80% now say they're concerned about the increases from insurance

[00:06:18] [SPEAKER_02]: affecting their residential investment.

[00:06:21] [SPEAKER_02]: Like, that's insane.

[00:06:23] [SPEAKER_00]: And that's a national number and I even looked at it the other day and I was looking at it.

[00:06:28] [SPEAKER_00]: The northeast is like the most dramatic.

[00:06:31] [SPEAKER_02]: So on top of the 80% of investors being concerned about home insurance increases,

[00:06:40] [SPEAKER_02]: 37% said they're very concerned about insurance increases.

[00:06:46] [SPEAKER_02]: Let me let me just put a scenario out there from my perspective.

[00:06:48] [SPEAKER_02]: We're doing the duo John here.

[00:06:50] [SPEAKER_02]: So from my perspective, let's say I have an investor client and let's just say they're

[00:06:55] [SPEAKER_02]: family, they own a home in and around Philadelphia and they're like, I want to go by a rental property.

[00:07:00] [SPEAKER_02]: I have $50,000 a hundred thousand dollars.

[00:07:03] [SPEAKER_02]: I just want to go invest it in something where it's a good investment to own the property.

[00:07:08] [SPEAKER_02]: I make some cash flow from the rent.

[00:07:10] [SPEAKER_02]: I get a tax right off.

[00:07:11] [SPEAKER_02]: Maybe maybe not higher property manager.

[00:07:14] [SPEAKER_02]: Those are really the people we're talking about here.

[00:07:17] [SPEAKER_02]: So like normally if someone's looking at like, I don't know.

[00:07:19] [SPEAKER_02]: Let's call it like a 400,000 dollar property.

[00:07:20] [SPEAKER_02]: I might say hey, you know, normally like 200 bucks a month for your home insurance.

[00:07:25] [SPEAKER_02]: But now what I would probably do before or while we're looking at things that they like,

[00:07:32] [SPEAKER_02]: I'd probably just have them call you.

[00:07:34] [SPEAKER_02]: They do me a favor run this address by Sean because I want Sean to give us an accurate quote for this particular property in this particular area.

[00:07:42] [SPEAKER_02]: Because there's lots of things that are going to play into it to understand if 200 is a fair number or if it's too low.

[00:07:49] [SPEAKER_00]: And what we're seeing now is everything changes, right?

[00:07:53] [SPEAKER_00]: Like these increases are one part of the puzzle, but obviously the appetite for some of these carriers is also changing.

[00:08:05] [SPEAKER_00]: So like we had always helping Evan Seagull.

[00:08:10] [SPEAKER_00]: Yeah.

[00:08:10] [SPEAKER_00]: With Beth with a risk this morning that he came to me and it was like the 11th hour.

[00:08:19] [SPEAKER_00]: And he was like, you know, this bank wants this and this insurance company is not given him that.

[00:08:26] [SPEAKER_00]: And you know, it's it's like a fight like a standoff.

[00:08:29] [SPEAKER_00]: And so that really wouldn't have happened years ago.

[00:08:32] [SPEAKER_00]: So it's just the environment of where things are now.

[00:08:36] [SPEAKER_00]: And pricing is one but also underwriting, right?

[00:08:41] [SPEAKER_00]: So like a lot of times too is some people will just write the account and not care about what's happening on the back.

[00:08:51] [SPEAKER_02]: That's crazy.

[00:08:52] [SPEAKER_02]: So the deal that you're looking at through Evan at Seagull Financial, great company if you're looking for financing on a commercial property or help.

[00:09:00] [SPEAKER_00]: Like he is just a wealth of knowledge and knows so much because he'd been doing it so long.

[00:09:06] [SPEAKER_00]: Just a great person to have a conversation with was that more like business insurance or was it for like a building itself.

[00:09:14] [SPEAKER_00]: It was an investment property.

[00:09:16] [SPEAKER_02]: Wow.

[00:09:16] [SPEAKER_02]: Residents for units.

[00:09:19] [SPEAKER_02]: Yeah, but that's considered technically you know, I think it's like five or less is considered like residential and anything above that you're getting into more.

[00:09:26] [SPEAKER_02]: Yeah.

[00:09:26] [SPEAKER_02]: The built.

[00:09:28] [SPEAKER_00]: Yep.

[00:09:28] [SPEAKER_00]: Interesting.

[00:09:28] [SPEAKER_00]: And so and then I also got my eyes on like you know what was what they were trying to do to go to the table and I was like shocked.

[00:09:39] [SPEAKER_00]: I was like oh, this is you know.

[00:09:43] [SPEAKER_00]: The coverage and the premium and everything so it like even from my position it's like I see things that I'm like whoa like yeah.

[00:09:51] [SPEAKER_00]: Take me back a little bit in terms of where the market is right now.

[00:09:56] [SPEAKER_02]: Dude, I got a good story too. So I have a client right now for some home buyer who's looking in.

[00:10:02] [SPEAKER_02]: Kanchi.

[00:10:03] [SPEAKER_02]: Yeah, Kancha Hawk and if you're not from Pennsylvania.

[00:10:05] [SPEAKER_02]: Dylan, how do you spell that?

[00:10:08] [SPEAKER_02]: Yeah, you know, I call a conch and hock and force or do you call it.

[00:10:12] [SPEAKER_02]: Kanchi as well with two ease.

[00:10:15] [SPEAKER_01]: I think it's a kind of.

[00:10:18] [SPEAKER_01]: You could just do conch a hot dog.

[00:10:19] [SPEAKER_00]: Go to the Google machine.

[00:10:21] [SPEAKER_00]: We stopped.

[00:10:22] [SPEAKER_02]: I love it.

[00:10:23] [SPEAKER_02]: Well, listen.

[00:10:25] [SPEAKER_02]: So I have a client looking in Kancha Hawk and yep.

[00:10:28] [SPEAKER_02]: We've looked at a number of properties now and he made his first offer on a property with sitting on the market for a little bit.

[00:10:35] [SPEAKER_02]: A little bit over price based on condition that's our opinion.

[00:10:38] [SPEAKER_02]: We put the offer together and we have you know the offer was a little under asking but he had all his contingencies.

[00:10:44] [SPEAKER_02]: Most of the time even years ago, five, 10, 15 years ago I would put property insurance and flood insurance is one of the elected contingencies in every agreement.

[00:10:56] [SPEAKER_02]: No one really ever cared because they're like they're just going to go get a home or it's like automatic.

[00:11:01] [SPEAKER_02]: So we put this offer in.

[00:11:03] [SPEAKER_02]: It's got home termite rate on and insurance.

[00:11:07] [SPEAKER_02]: And then the agent gets back to me.

[00:11:09] [SPEAKER_00]: Anyway, can you explain that? Just take it one step further.

[00:11:12] [SPEAKER_00]: Yeah for people out there that are like well, what's the contingency and how would that play into the execution of the deal?

[00:11:19] [SPEAKER_02]: Yeah. So like if you buy a house, you can say I'll pay cash and have no contingencies.

[00:11:23] [SPEAKER_02]: It means like you're just going to buy it and you have no way out of the contract.

[00:11:27] [SPEAKER_02]: But a lot of people when they buy houses, they have mortgages that they need to get.

[00:11:32] [SPEAKER_02]: So if they don't get the mortgage, that's a contingency they can get out.

[00:11:35] [SPEAKER_02]: So when it comes to insurance insurance is part of what's called due diligence inspections contingency.

[00:11:42] [SPEAKER_02]: And in that instance, they get the opportunity to research the condition of the home, you know, termite rate on and also research.

[00:11:51] [SPEAKER_02]: Hey, what's the homeowners insurance going to be like on this property?

[00:11:54] [SPEAKER_02]: Whether you're going to live there, it's investment property doesn't matter.

[00:11:56] [SPEAKER_02]: So we submit this offer.

[00:11:58] [SPEAKER_02]: Insurance is part of it.

[00:12:00] [SPEAKER_02]: I got a call back from the agent and she says to me,

[00:12:04] [SPEAKER_02]: We're not even going to counter.

[00:12:06] [SPEAKER_02]: And I'm like, okay, is it because we're under asking?

[00:12:10] [SPEAKER_02]: He's like, well, yeah, you're a little bit lower than where we want to be, but we don't like all these contingencies.

[00:12:17] [SPEAKER_02]: Namely insurance.

[00:12:19] [SPEAKER_02]: I'm like, get out of here.

[00:12:21] [SPEAKER_02]: It's kind of like what I said. She's like, no, that's a little bit of a risk.

[00:12:25] [SPEAKER_02]: What if you guys go ahead and get insurance, quote, and it's twice as high, then you think it's going to be.

[00:12:29] [SPEAKER_02]: And then your client pulls out because that, no, we don't want to say so.

[00:12:34] [SPEAKER_00]: So that's pretty subjective. So yeah, so insurance contingency.

[00:12:39] [SPEAKER_00]: It's not defined as like can you get insurance or can you not get it?

[00:12:44] [SPEAKER_02]: It's like the court insurance.

[00:12:46] [SPEAKER_02]: They can get out.

[00:12:47] [SPEAKER_02]: If you gave him a if I said it's 200 bucks and they can put them you and it's like forever using 400 bucks.

[00:12:52] [SPEAKER_02]: Yeah, condition of home, whatever it is, then they can say, I don't want by us house in words.

[00:12:57] [SPEAKER_00]: 200 more than I thought, I can see how that's interpreted.

[00:13:00] [SPEAKER_00]: Yeah, right?

[00:13:01] [SPEAKER_00]: Because it's it is in a scapeach that if you do want to get out of the deal, yeah.

[00:13:08] [SPEAKER_00]: It's good for us.

[00:13:09] [SPEAKER_00]: It's bad for the seller.

[00:13:10] [SPEAKER_00]: Yeah, and especially because if your buying in as an investment property,

[00:13:16] [SPEAKER_00]: you really have a calculation of what the rents are.

[00:13:20] [SPEAKER_00]: Exactly.

[00:13:20] [SPEAKER_00]: What the repairs are going to be, what the insurance is going to cost you.

[00:13:24] [SPEAKER_00]: And if that changes for whatever reason, you can be out.

[00:13:29] [SPEAKER_00]: I mean, I can understand from an investor's point of view.

[00:13:34] [SPEAKER_00]: Why that would be?

[00:13:35] [SPEAKER_02]: Yeah, and it's in 15 years never been an issue.

[00:13:38] [SPEAKER_02]: Never come up.

[00:13:39] [SPEAKER_02]: Yeah, never.

[00:13:40] [SPEAKER_02]: And first time was just like, I think it was the package of what we all were there just like, okay,

[00:13:46] [SPEAKER_02]: we're just going to, it's only been the market like a week and a half.

[00:13:48] [SPEAKER_02]: We're going to give it more time.

[00:13:49] [SPEAKER_02]: Going to have an open house.

[00:13:50] [SPEAKER_02]: I'm going to see if anyone else is interested.

[00:13:52] [SPEAKER_02]: Yeah, but the last time I checked it wasn't sold and we're just patiently waiting for the second conversation.

[00:13:56] [SPEAKER_02]: And when I talked to my client, I said, hey, you know, you can get insurance quote now.

[00:14:00] [SPEAKER_02]: If you want on that property, just understand what it is.

[00:14:03] [SPEAKER_02]: And then if they come back to us, we don't need.

[00:14:05] [SPEAKER_02]: It doesn't need to be contingent because you are already in the way that you know.

[00:14:08] [SPEAKER_02]: Go through that out there and we just said, let's just sit back.

[00:14:11] [SPEAKER_02]: Let's go look at some more stuff.

[00:14:12] [SPEAKER_02]: But isn't that interesting?

[00:14:13] [SPEAKER_02]: First time 15 years someone said, namely insurance.

[00:14:17] [SPEAKER_02]: We don't like that.

[00:14:18] [SPEAKER_02]: And who would have thought that insurance would be such a sexy topic?

[00:14:23] [SPEAKER_02]: And they're like, do you know Sean Mooney and I said, I do.

[00:14:26] [SPEAKER_02]: And they're like, is that who you're working with?

[00:14:28] [SPEAKER_02]: I'm like, it is.

[00:14:30] [SPEAKER_02]: They're like, now I really don't want to talk to you.

[00:14:33] [SPEAKER_00]: If I wasn't totally committed of getting out of this deal, I'm like, oh my gosh,

[00:14:39] [SPEAKER_02]: I'm gosh, legally I said this.

[00:14:40] [SPEAKER_02]: I talked to my client.

[00:14:41] [SPEAKER_02]: I'm like, I'm so sorry.

[00:14:42] [SPEAKER_02]: I can't believe I suggested this.

[00:14:43] [SPEAKER_02]: Oh, no, Shane, Mooney, insurance.

[00:14:47] [SPEAKER_02]: There's two ease at the end.

[00:14:49] [SPEAKER_02]: It's not EY.

[00:14:52] [SPEAKER_02]: E-E?

[00:14:53] [SPEAKER_02]: Hey everyone, this is Tim.

[00:14:56] [SPEAKER_02]: Your favorite bricks and risk co-hosts.

[00:14:58] [SPEAKER_02]: But don't tell Sean.

[00:15:00] [SPEAKER_02]: I hope you're enjoying this episode.

[00:15:01] [SPEAKER_02]: And I'll get right back to it in a moment.

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[00:15:22] [SPEAKER_02]: Now, back to the show.

[00:15:28] [SPEAKER_02]: All right, let's go to the next part of this.

[00:15:30] [SPEAKER_02]: Was also in the survey and some of the stats they were talking about.

[00:15:36] [SPEAKER_02]: They were talking about the average increases

[00:15:39] [SPEAKER_02]: for US home insurance premiums.

[00:15:43] [SPEAKER_02]: I think this is really on single families.

[00:15:44] [SPEAKER_02]: They're talking about so the whole country,

[00:15:46] [SPEAKER_02]: what's the average insurance has gone up.

[00:15:48] [SPEAKER_02]: And remember we did a pass episode.

[00:15:50] [SPEAKER_02]: I don't know if it's out yet,

[00:15:51] [SPEAKER_02]: where we were talking about you're like,

[00:15:52] [SPEAKER_02]: hey, insurance always goes up in some way, shape or form.

[00:15:55] [SPEAKER_02]: Yeah.

[00:15:55] [SPEAKER_02]: A couple points, moderate.

[00:15:57] [SPEAKER_02]: Two points, five points, whatever.

[00:15:59] [SPEAKER_02]: Like the single digits.

[00:16:00] [SPEAKER_02]: Okay, so this is interesting.

[00:16:02] [SPEAKER_02]: So in 2019,

[00:16:05] [SPEAKER_02]: it was 2.5% was the increase.

[00:16:09] [SPEAKER_02]: So again, probably pretty normal.

[00:16:11] [SPEAKER_02]: Historical averages.

[00:16:12] [SPEAKER_02]: It's probably something close to that.

[00:16:14] [SPEAKER_02]: Prior to COVID.

[00:16:15] [SPEAKER_02]: Yeah.

[00:16:16] [SPEAKER_02]: In 2022,

[00:16:18] [SPEAKER_02]: 6.6%

[00:16:20] [SPEAKER_02]: Yep, was the increase across the US.

[00:16:24] [SPEAKER_02]: 2023,

[00:16:26] [SPEAKER_02]: 11% is the average.

[00:16:29] [SPEAKER_02]: Meaning like you said,

[00:16:30] [SPEAKER_02]: some people, their insurance might not even go up at all.

[00:16:32] [SPEAKER_02]: Maybe they're just low risk and they're just leave it.

[00:16:35] [SPEAKER_02]: Maybe because up one or two points,

[00:16:36] [SPEAKER_02]: but some people were going up 20%.

[00:16:38] [SPEAKER_02]: Like you would said before in a previous episode.

[00:16:41] [SPEAKER_00]: Like I'm telling you so that's not so if you look at that number

[00:16:44] [SPEAKER_00]: and you think that that 11% number is high, which it is.

[00:16:51] [SPEAKER_00]: We'd until 24 comes through because in this period,

[00:16:57] [SPEAKER_00]: for the last couple years,

[00:16:59] [SPEAKER_00]: 204 is by far the largest that we've seen.

[00:17:03] [SPEAKER_02]: That's crazy.

[00:17:04] [SPEAKER_02]: I mean, I'm telling you,

[00:17:05] [SPEAKER_02]: I think it's going to be,

[00:17:07] [SPEAKER_02]: what do you think it's going to be in 20?

[00:17:08] [SPEAKER_02]: So if they were dropping stats,

[00:17:10] [SPEAKER_00]: what would you predict if you were on or if it was 15%.

[00:17:13] [SPEAKER_00]: Now it take the over.

[00:17:14] [SPEAKER_02]: Wow.

[00:17:15] [SPEAKER_02]: Yeah.

[00:17:15] [SPEAKER_02]: So you think it might be 15%, maybe.

[00:17:18] [SPEAKER_02]: Yeah.

[00:17:19] [SPEAKER_02]: That would seem going to be like almost double,

[00:17:21] [SPEAKER_02]: possibly that number.

[00:17:23] [SPEAKER_00]: I mean,

[00:17:24] [SPEAKER_00]: and I could probably pull some recent statistics

[00:17:29] [SPEAKER_00]: that would show like that trend line.

[00:17:32] [SPEAKER_00]: And they do like,

[00:17:34] [SPEAKER_00]: quarter one for this year,

[00:17:37] [SPEAKER_02]: quarter two,

[00:17:37] [SPEAKER_02]: bar graph or whatever,

[00:17:39] [SPEAKER_02]: just kind of like looking at line graph.

[00:17:40] [SPEAKER_00]: Yeah.

[00:17:41] [SPEAKER_00]: And because I mean,

[00:17:42] [SPEAKER_00]: I see it every day.

[00:17:43] [SPEAKER_00]: And it,

[00:17:43] [SPEAKER_00]: you know,

[00:17:43] [SPEAKER_00]: nationally is broad brush increases.

[00:17:47] [SPEAKER_00]: So where I think we are is,

[00:17:50] [SPEAKER_00]: you know,

[00:17:51] [SPEAKER_00]: not as bad as Florida,

[00:17:53] [SPEAKER_00]: California and,

[00:17:55] [SPEAKER_00]: you know,

[00:17:55] [SPEAKER_00]: Oklahoma and those types.

[00:17:57] [SPEAKER_00]: But comparatively speaking,

[00:18:00] [SPEAKER_00]: I think that we're seeing some of the heavier increases

[00:18:03] [SPEAKER_00]: when you're looking at it.

[00:18:04] [SPEAKER_00]: We see 30,

[00:18:06] [SPEAKER_00]: 40%,

[00:18:07] [SPEAKER_00]: 30,

[00:18:08] [SPEAKER_00]: 40% on homeowners.

[00:18:10] [SPEAKER_00]: Yeah.

[00:18:12] [SPEAKER_02]: All right,

[00:18:12] [SPEAKER_02]: let me ask you this.

[00:18:13] [SPEAKER_02]: Not going to put you on the spot too much,

[00:18:15] [SPEAKER_02]: but go ahead,

[00:18:16] [SPEAKER_02]: kind of.

[00:18:17] [SPEAKER_02]: If you had to predict

[00:18:21] [SPEAKER_02]: when insurance companies are going to start feeling a little bit better

[00:18:25] [SPEAKER_02]: about where they are with like inflation,

[00:18:27] [SPEAKER_02]: with like weather risk,

[00:18:29] [SPEAKER_02]: the infot,

[00:18:29] [SPEAKER_02]: all these things we talked about before in the insurance episode.

[00:18:32] [SPEAKER_02]: If you haven't seen it,

[00:18:33] [SPEAKER_02]: it's fantastic.

[00:18:34] [SPEAKER_02]: Watch on YouTube,

[00:18:35] [SPEAKER_02]: listen on Spotify,

[00:18:36] [SPEAKER_02]: Apple or Amazon.

[00:18:38] [SPEAKER_02]: When would you think

[00:18:39] [SPEAKER_02]: this might kind of settle down?

[00:18:43] [SPEAKER_02]: Like if you had to predict,

[00:18:44] [SPEAKER_02]: again,

[00:18:44] [SPEAKER_02]: you don't know.

[00:18:45] [SPEAKER_02]: You don't have a crystal ball,

[00:18:46] [SPEAKER_02]: but if you had to predict.

[00:18:46] [SPEAKER_00]: If I was no stradomas,

[00:18:49] [SPEAKER_00]: yes,

[00:18:50] [SPEAKER_00]: or Karnak,

[00:18:53] [SPEAKER_00]: I would say that it's probably going to be into the second quarter of 25.

[00:19:01] [SPEAKER_00]: Okay.

[00:19:02] [SPEAKER_02]: So you think there's an end in sight?

[00:19:03] [SPEAKER_02]: I do.

[00:19:04] [SPEAKER_02]: I do.

[00:19:04] [SPEAKER_02]: I think at that point,

[00:19:05] [SPEAKER_02]: they'll either stabilize or be like,

[00:19:08] [SPEAKER_02]: now we can kind of retreat back a little bit.

[00:19:11] [SPEAKER_02]: Maybe it's not 15 seconds.

[00:19:13] [SPEAKER_00]: No, I think it's going to plateau.

[00:19:15] [SPEAKER_00]: Yeah.

[00:19:15] [SPEAKER_00]: I don't think there's going to be much of a retreat.

[00:19:17] [SPEAKER_00]: Oh, so you just think it'll just stop going.

[00:19:19] [SPEAKER_00]: Cool off.

[00:19:20] [SPEAKER_00]: Yeah.

[00:19:21] [SPEAKER_00]: And then they'll figure out.

[00:19:22] [SPEAKER_00]: So what's been happening over the last year or two is they've been taking rate.

[00:19:26] [SPEAKER_00]: So the premiums are up.

[00:19:27] [SPEAKER_00]: Right?

[00:19:28] [SPEAKER_00]: And before I think it was,

[00:19:30] [SPEAKER_00]: they were artificially under where they should have been.

[00:19:34] [SPEAKER_00]: Like you know where exactly homeowners rates should be.

[00:19:39] [SPEAKER_00]: So when you see some carriers that are,

[00:19:42] [SPEAKER_00]: you know,

[00:19:42] [SPEAKER_00]: half million our home for like 800 bucks.

[00:19:45] [SPEAKER_00]: Like they're not making money on that right?

[00:19:48] [SPEAKER_00]: But they try to sell,

[00:19:50] [SPEAKER_00]: you know,

[00:19:50] [SPEAKER_00]: thousands of policies and,

[00:19:53] [SPEAKER_00]: you know,

[00:19:53] [SPEAKER_00]: just make the numbers work.

[00:19:56] [SPEAKER_00]: In addition to the rate increases,

[00:19:58] [SPEAKER_00]: they're getting very selective on who they're going to write.

[00:20:01] [SPEAKER_00]: Like their their appetites have changed.

[00:20:03] [SPEAKER_00]: Right?

[00:20:03] [SPEAKER_00]: So that's kind of a component of why

[00:20:07] [SPEAKER_00]: it's allowing these companies to get more profitable.

[00:20:12] [SPEAKER_00]: And that's the goal is to like,

[00:20:14] [SPEAKER_00]: yeah, get more profitable.

[00:20:16] [SPEAKER_00]: That's losing.

[00:20:16] [SPEAKER_00]: Yeah.

[00:20:17] [SPEAKER_00]: Like they have been.

[00:20:19] [SPEAKER_00]: And then in addition to that is they're getting very strict on like,

[00:20:24] [SPEAKER_00]: inspection of homes.

[00:20:26] [SPEAKER_00]: Yeah.

[00:20:27] [SPEAKER_00]: Saying before we didn't really care and if there was a loss,

[00:20:31] [SPEAKER_00]: we're good.

[00:20:31] [SPEAKER_00]: Like now it's like I'm telling you.

[00:20:34] [SPEAKER_00]: So like if you say 2019 and you issued 20 policies,

[00:20:41] [SPEAKER_00]: you might have had like one or two policies that would have had a follow-up recommendation

[00:20:48] [SPEAKER_00]: or requirement steps,

[00:20:51] [SPEAKER_00]: railings,

[00:20:51] [SPEAKER_00]: windows,

[00:20:52] [SPEAKER_00]: roof,

[00:20:53] [SPEAKER_00]: yeah,

[00:20:53] [SPEAKER_00]: sidewalk,

[00:20:54] [SPEAKER_00]: stuff like that where they're looking at a property.

[00:20:57] [SPEAKER_00]: And they're saying this could be the potential for a claim down the road.

[00:21:03] [SPEAKER_00]: Right.

[00:21:04] [SPEAKER_00]: From an insurance perspective.

[00:21:06] [SPEAKER_02]: He's sidewalks raised a little bit.

[00:21:07] [SPEAKER_02]: They're like, some could trip, some could to you.

[00:21:10] [SPEAKER_00]: And so 20 policies issued,

[00:21:13] [SPEAKER_00]: you know, two or three that might have recommendations requirement.

[00:21:17] [SPEAKER_00]: Now,

[00:21:20] [SPEAKER_00]: 15 homes out of 20.

[00:21:22] [SPEAKER_00]: You need to do this.

[00:21:23] [SPEAKER_00]: You need to do that.

[00:21:25] [SPEAKER_00]: And it's funny because I see around my neighborhood even,

[00:21:30] [SPEAKER_00]: I see a house that will sell.

[00:21:33] [SPEAKER_00]: And then shortly thereafter getting worked on.

[00:21:35] [SPEAKER_00]: Oh wow.

[00:21:36] [SPEAKER_00]: So I'm like, you see someone dinged him.

[00:21:39] [SPEAKER_00]: Yep.

[00:21:39] [SPEAKER_00]: The insurance company's like, hey, if we're going to continue on this risk,

[00:21:42] [SPEAKER_00]: you need to do X, Y and Z.

[00:21:44] [SPEAKER_00]: You need to like get the shingles repaired.

[00:21:47] [SPEAKER_00]: You need to cut back the trees on the tree line.

[00:21:49] [SPEAKER_00]: They don't want trees hanging over the houses.

[00:21:52] [SPEAKER_00]: So we literally driving around.

[00:21:55] [SPEAKER_00]: I can tell you that I've seen it first.

[00:21:56] [SPEAKER_00]: And I said, that household, they didn't inspection.

[00:22:00] [SPEAKER_00]: And now they're requiring this work to be done.

[00:22:03] [SPEAKER_00]: And it has to be done quick.

[00:22:05] [SPEAKER_00]: So in the state of Pennsylvania,

[00:22:07] [SPEAKER_00]: the Department of Insurance requires if you want off of a risk

[00:22:10] [SPEAKER_00]: if you issue coverage and you say,

[00:22:13] [SPEAKER_00]: we want off this.

[00:22:15] [SPEAKER_00]: There's a window of 60 days to be off that risk.

[00:22:21] [SPEAKER_00]: And it's a 30 day window of notification to the client.

[00:22:27] [SPEAKER_00]: So you issue coverage, June 1st.

[00:22:31] [SPEAKER_00]: You got to inspect it in two weeks so that you can have the letter out

[00:22:35] [SPEAKER_00]: in four weeks so you can be off of this risk in eight weeks.

[00:22:39] [SPEAKER_00]: Wow.

[00:22:40] [SPEAKER_00]: It's literally baboon baboon.

[00:22:43] [SPEAKER_00]: That's crazy.

[00:22:43] [SPEAKER_00]: And trying to get a contract right there.

[00:22:45] [SPEAKER_00]: Yeah.

[00:22:45] [SPEAKER_02]: This is busy still or labor's tied.

[00:22:48] [SPEAKER_02]: There's just too much demand.

[00:22:51] [SPEAKER_00]: So yes, prices are there and prices are dramatically impacting the rates on insurance.

[00:22:57] [SPEAKER_00]: But it's also these insurance companies saying, hey,

[00:23:02] [SPEAKER_00]: we're not going to just look past that potential risk that hazard at the house.

[00:23:08] [SPEAKER_00]: If we can try to avoid a risk that we see is coming,

[00:23:14] [SPEAKER_00]: we're going to go and do that.

[00:23:15] [SPEAKER_02]: It will.

[00:23:16] [SPEAKER_02]: Do you currently have car insurance?

[00:23:18] [SPEAKER_02]: No, I don't even have a license.

[00:23:22] [SPEAKER_02]: Oh, yeah.

[00:23:23] [SPEAKER_02]: I was going to ask you a question, but we're just going to go on this way.

[00:23:27] [SPEAKER_02]: Let's win it.

[00:23:28] [SPEAKER_02]: Let's go and do it.

[00:23:29] [SPEAKER_02]: I was going to say if you have car insurance has your car insurance gone up.

[00:23:37] [SPEAKER_01]: Well, no, my car insurance has been pretty consistent.

[00:23:42] [SPEAKER_01]: Yeah.

[00:23:43] [SPEAKER_01]: No, I, yeah, my parents were always very straightforward about like, hey, you get your license

[00:23:51] [SPEAKER_01]: and you're driving your cars, you're paying for insurance.

[00:23:54] [SPEAKER_01]: Nice.

[00:23:55] [SPEAKER_01]: And I was a kind of, yeah, so I kind of, yeah, absolutely.

[00:23:59] [SPEAKER_01]: A lot of respect to that, like ideal.

[00:24:02] [SPEAKER_01]: But I'm just being from blind side or something.

[00:24:05] [SPEAKER_00]: It must be something in the water.

[00:24:06] [SPEAKER_00]: I know three eight.

[00:24:07] [SPEAKER_00]: Good parenting.

[00:24:08] [SPEAKER_00]: Yeah.

[00:24:09] [SPEAKER_01]: But I, so I just, I saved up my money and I ended up moving to the city anyway.

[00:24:14] [SPEAKER_01]: So I fell in need of, you know, I just never got it.

[00:24:17] [SPEAKER_01]: I don't know.

[00:24:17] [SPEAKER_02]: Wow, interesting.

[00:24:18] [SPEAKER_02]: Cool.

[00:24:19] [SPEAKER_02]: Thanks, man.

[00:24:19] [SPEAKER_00]: I'm going to have him clip up.

[00:24:21] [SPEAKER_00]: There's a recent study that it was looking at CPI and super price index.

[00:24:27] [SPEAKER_00]: Yep.

[00:24:27] [SPEAKER_00]: And they kind of indexed all of the inflationary impacts for what people deal with day-to-day.

[00:24:33] [SPEAKER_00]: Yep.

[00:24:33] [SPEAKER_00]: Like groceries and, you know, everything else.

[00:24:36] [SPEAKER_00]: Yeah.

[00:24:37] [SPEAKER_00]: And so it was a recent study and on the bottom, you know, stuff was actually going down, like maybe like two three four percent.

[00:24:46] [SPEAKER_00]: And then you'd have groceries, brand new car, use car.

[00:24:52] [SPEAKER_00]: And everything was in the realm of like minus four to like plus four or five.

[00:24:59] [SPEAKER_00]: So that was like the, like, neutral.

[00:25:01] [SPEAKER_00]: Yeah.

[00:25:03] [SPEAKER_02]: At the very top, the only one we're going to put this in.

[00:25:06] [SPEAKER_02]: And it says, moody insurance brokers with your face like this.

[00:25:12] [SPEAKER_00]: With an arrow going up and up with your hand just going like this.

[00:25:19] [SPEAKER_00]: 22 percent year over year auto insurance increase nationally.

[00:25:25] [SPEAKER_00]: Damn.

[00:25:26] [SPEAKER_00]: That's crazy.

[00:25:27] [SPEAKER_00]: So it's like a borgrif so you can see it.

[00:25:29] [SPEAKER_00]: So it's like a little bit like this.

[00:25:30] [SPEAKER_00]: And then you hit the auto insurance and it's like,

[00:25:33] [SPEAKER_02]: Oh, there's a, all right.

[00:25:33] [SPEAKER_02]: Here's a good question.

[00:25:34] [SPEAKER_02]: Doesn't matter if you own the car versus like least the car doesn't matter.

[00:25:38] [SPEAKER_02]: I was too insure.

[00:25:39] [SPEAKER_02]: Yeah.

[00:25:39] [SPEAKER_02]: Got you.

[00:25:40] [SPEAKER_00]: Now the bank might require different things.

[00:25:42] [SPEAKER_00]: So if you lease the car, the banks going to have a different requirement than a finance company.

[00:25:46] [SPEAKER_00]: But got it.

[00:25:47] [SPEAKER_00]: You're not talking much different there.

[00:25:50] [SPEAKER_02]: All right.

[00:25:50] [SPEAKER_02]: So let's, you know, if we're talking about the survey, we're talking about the increases,

[00:25:55] [SPEAKER_02]: everything that's going on right now with insurance.

[00:25:57] [SPEAKER_02]: It's having a direct correlation to real estate, nearly investing.

[00:26:01] [SPEAKER_02]: The reason it's so important to investing is when you buy an investment property,

[00:26:05] [SPEAKER_02]: you have cash flow.

[00:26:07] [SPEAKER_02]: It's like a number of I pay X and my principal interest taxes insurance and vacancy rate.

[00:26:13] [SPEAKER_02]: And my upkeep on the property is why like I need to make Z,

[00:26:17] [SPEAKER_02]: like I want to make a couple hundred bucks a month in order to buy this property.

[00:26:22] [SPEAKER_00]: It's different than a home as your primary.

[00:26:23] [SPEAKER_00]: You might get into a primary home and say, I love this home.

[00:26:26] [SPEAKER_00]: I'm going to be here for 30 years.

[00:26:27] [SPEAKER_02]: I know share attachments got different function.

[00:26:29] [SPEAKER_02]: Investual properties differ about money,

[00:26:32] [SPEAKER_02]: dollars in cents and numbers.

[00:26:35] [SPEAKER_02]: So what's interesting is like, you know, why this is a problem is

[00:26:40] [SPEAKER_02]: investors who own single family homes are really starting to experience this.

[00:26:46] [SPEAKER_02]: Not necessarily.

[00:26:47] [SPEAKER_02]: I mean, I'm sure the larger part of the buildings have already experienced this.

[00:26:50] [SPEAKER_02]: But now it's like the personal owns like one or two rentals.

[00:26:53] [SPEAKER_02]: Like let's say in Philadelphia.

[00:26:55] [SPEAKER_02]: And let's say the only had $150, $200 a month in cash flow.

[00:27:00] [SPEAKER_02]: Well, it's like key on.

[00:27:01] [SPEAKER_02]: Remember key on was on our show.

[00:27:03] [SPEAKER_00]: Yeah, kind of back to month single family residences that he,

[00:27:06] [SPEAKER_00]: you know, was cash flowing.

[00:27:09] [SPEAKER_00]: This, these increases this insurance component is a dramatic impact

[00:27:15] [SPEAKER_00]: with what we're seeing and especially hitting those types of

[00:27:20] [SPEAKER_00]: investors that own these, you know, 10 single family homes.

[00:27:25] [SPEAKER_00]: Yeah, that's crazy.

[00:27:26] [SPEAKER_02]: It's dramatic.

[00:27:27] [SPEAKER_02]: And then that could be eating into his profits.

[00:27:29] [SPEAKER_02]: So that's one thing to consider.

[00:27:32] [SPEAKER_02]: Um, again, if you bought an investment property,

[00:27:35] [SPEAKER_02]: let's say in the last like two maybe three years,

[00:27:40] [SPEAKER_02]: your numbers are probably going to be pretty tight.

[00:27:42] [SPEAKER_02]: Yeah.

[00:27:43] [SPEAKER_02]: We're using being more so in the last year, year and a half because

[00:27:46] [SPEAKER_02]: the interest rates have gone up.

[00:27:47] [SPEAKER_02]: Yeah, because prices have been rising so dramatically over less few years.

[00:27:51] [SPEAKER_02]: So think about that person that bought the property a year ago and

[00:27:55] [SPEAKER_02]: if they're an investor, maybe they're sitting on a seven to half eight

[00:27:57] [SPEAKER_02]: eight percent interest rate on that property.

[00:28:00] [SPEAKER_02]: And maybe they only have one or two hundred a month in cash flow.

[00:28:03] [SPEAKER_02]: And their insurance is going up 20% plus a month.

[00:28:08] [SPEAKER_02]: Like they're like, wow, this is.

[00:28:09] [SPEAKER_02]: And then the HVAC goes over the dishwasher or again,

[00:28:14] [SPEAKER_02]: they got to fix something on the exterior.

[00:28:17] [SPEAKER_02]: Now they're really digging in for their profits and that's a problem.

[00:28:21] [SPEAKER_00]: Here's what I would say because we have one investor owns 50 homes.

[00:28:24] [SPEAKER_00]: And like that person.

[00:28:26] [SPEAKER_00]: That portfolio just blown out of the water.

[00:28:29] [SPEAKER_00]: Like it's.

[00:28:31] [SPEAKER_00]: Yeah, 50 home 50 increases 10% here, 15% here.

[00:28:38] [SPEAKER_00]: And the question is like, how do you manage it?

[00:28:40] [SPEAKER_00]: Right?

[00:28:40] [SPEAKER_00]: Like do you just take 15% on the chin?

[00:28:44] [SPEAKER_00]: You know, what do you do?

[00:28:46] [SPEAKER_00]: And my approach with these clients is number one, try to tighten up your properties

[00:28:53] [SPEAKER_00]: as best you can.

[00:28:55] [SPEAKER_00]: Yeah, be proactive where and when you can to bring everything up to

[00:29:03] [SPEAKER_00]: enough because as this goes on, carriers are going to be very

[00:29:10] [SPEAKER_00]: things and that's a collective who they're going to give out their preferred

[00:29:13] [SPEAKER_00]: rates too.

[00:29:15] [SPEAKER_00]: And when you are demonstrating that you care for these properties,

[00:29:20] [SPEAKER_00]: you have the proper upkeep on these properties.

[00:29:24] [SPEAKER_00]: You're telling the.

[00:29:26] [SPEAKER_00]: Powerier that a claim is going to be less likely with me because I'm

[00:29:31] [SPEAKER_00]: doing all of these things to try and prevent a claim down the road.

[00:29:36] [SPEAKER_02]: It's proactive versus reactive, which you've talked about before.

[00:29:40] [SPEAKER_02]: And again, you adviseing, client, you don't have to do anything.

[00:29:43] [SPEAKER_02]: You know, Mr. or Mr. or Mrs. Investor,

[00:29:46] [SPEAKER_02]: you don't have to do a thing to your 50 properties.

[00:29:48] [SPEAKER_02]: But you might want to consider looking at all

[00:29:52] [SPEAKER_02]: from a little bit more detailed understanding what's going on in the market.

[00:29:56] [SPEAKER_02]: Again, if you're improving your properties,

[00:29:58] [SPEAKER_02]: you're probably improving them for years.

[00:30:00] [SPEAKER_02]: Yeah.

[00:30:01] [SPEAKER_02]: So that's a smart investment.

[00:30:03] [SPEAKER_02]: Normally, a lot of repairs in upkeep, again, usually

[00:30:05] [SPEAKER_02]: they're tax-rightoffs.

[00:30:06] [SPEAKER_02]: I mean, I'm not an accountant.

[00:30:07] [SPEAKER_02]: So it's not like you're just taking the money and throwing it away.

[00:30:09] [SPEAKER_02]: You're investing in your properties,

[00:30:11] [SPEAKER_02]: two potentially stabilize your insurance and or maybe have a go down.

[00:30:16] [SPEAKER_02]: And what's also interesting is, like,

[00:30:18] [SPEAKER_02]: let's say that client of yours who owns the 50 properties.

[00:30:21] [SPEAKER_02]: I know a lot of people at own big portfolios like that.

[00:30:25] [SPEAKER_02]: And a lot of times, they just lease things on their own.

[00:30:27] [SPEAKER_02]: And how do you lease on your own?

[00:30:28] [SPEAKER_02]: They put a sign up for lease.

[00:30:31] [SPEAKER_02]: Yeah, they go to Craigslist.

[00:30:33] [SPEAKER_02]: And like one, two, three, main street,

[00:30:36] [SPEAKER_02]: pay me rent.

[00:30:37] [SPEAKER_02]: Don't care about credit.

[00:30:39] [SPEAKER_00]: I think Qora has part of their site has rental listing.

[00:30:45] [SPEAKER_00]: Oh, I love this.

[00:30:48] [SPEAKER_02]: But with those particular clients,

[00:30:50] [SPEAKER_02]: those are clients that I love to talk to

[00:30:52] [SPEAKER_02]: if I'm not working with already.

[00:30:53] [SPEAKER_02]: Because I can look at your 50 property portfolio and say,

[00:30:56] [SPEAKER_02]: what do you get on every property?

[00:30:57] [SPEAKER_02]: Yeah. And they might say, hey, I'm getting $1200 on someone.

[00:31:00] [SPEAKER_02]: Like you should be getting $1500.

[00:31:02] [SPEAKER_02]: I haven't re-rented it in like seven years.

[00:31:05] [SPEAKER_02]: So that's something just like you're advising them on like,

[00:31:08] [SPEAKER_02]: take a look at these properties,

[00:31:10] [SPEAKER_02]: maybe fix up some things that you think are a risk.

[00:31:13] [SPEAKER_00]: If you're charging more rent,

[00:31:14] [SPEAKER_00]: take that additional rent and put it back into the property.

[00:31:18] [SPEAKER_00]: Right.

[00:31:18] [SPEAKER_00]: And then the other thing that we're recommending for our clients

[00:31:22] [SPEAKER_00]: is take a high deductible.

[00:31:25] [SPEAKER_00]: There's carriers and policies and people that come to us.

[00:31:29] [SPEAKER_00]: It's like I have this investment property and I'm like,

[00:31:31] [SPEAKER_00]: why do you have a $500 deduct?

[00:31:35] [SPEAKER_00]: Right.

[00:31:35] [SPEAKER_00]: Yeah.

[00:31:35] [SPEAKER_00]: Like, if you're an investor,

[00:31:37] [SPEAKER_00]: you obviously have people that you can go to to fix things.

[00:31:41] [SPEAKER_00]: Right.

[00:31:42] [SPEAKER_00]: So take a high deductible.

[00:31:44] [SPEAKER_00]: $1,500, $5,000 deductible.

[00:31:47] [SPEAKER_00]: Because number one,

[00:31:48] [SPEAKER_00]: if it's small,

[00:31:49] [SPEAKER_00]: you don't want that claim anyway.

[00:31:51] [SPEAKER_00]: And number two is again,

[00:31:53] [SPEAKER_00]: you're showing the carrier that you're willing to pay

[00:31:58] [SPEAKER_02]: $2,500, $5,000, something goes wrong.

[00:32:00] [SPEAKER_02]: And not put in a claim.

[00:32:01] [SPEAKER_00]: You're speaking their language.

[00:32:03] [SPEAKER_00]: Yeah.

[00:32:03] [SPEAKER_00]: The insurance is here for credit.

[00:32:05] [SPEAKER_00]: That's really good advice.

[00:32:06] [SPEAKER_00]: How to straff it clause.

[00:32:08] [SPEAKER_00]: There's a fire.

[00:32:09] [SPEAKER_00]: The insurance company is going to pay that claim.

[00:32:12] [SPEAKER_00]: And, you know,

[00:32:13] [SPEAKER_00]: the insurance company doesn't want to pay for

[00:32:16] [SPEAKER_00]: your hot water heater was 20 years old

[00:32:19] [SPEAKER_00]: and it leaked all over the floor

[00:32:21] [SPEAKER_00]: because you didn't take the proper initiative

[00:32:23] [SPEAKER_00]: to get that changed out when it should have been.

[00:32:26] [SPEAKER_00]: They don't want to pay that claim.

[00:32:28] [SPEAKER_00]: They're going to sting you for it.

[00:32:31] [SPEAKER_00]: And they're going to want to get rid of you as a client.

[00:32:34] [SPEAKER_00]: Take the hot deductible.

[00:32:35] [SPEAKER_00]: Be proactive about the work in your home

[00:32:38] [SPEAKER_00]: and your investment properties

[00:32:39] [SPEAKER_00]: and it's going to pay dividends down the road.

[00:32:42] [SPEAKER_02]: Awesome.

[00:32:43] [SPEAKER_02]: Such great advice.

[00:32:44] [SPEAKER_02]: Well, that's all we have for this episode folks.

[00:32:48] [SPEAKER_02]: So thank you for tuning in again to another episode

[00:32:50] [SPEAKER_02]: of Bricks and Risk.

[00:32:52] [SPEAKER_02]: See you soon.

[00:32:54] [SPEAKER_02]: Thank you for joining us on another episode

[00:32:56] [SPEAKER_02]: of Bricks and Risk.

[00:32:58] [SPEAKER_02]: Our goal is that you walk away with one or two valuable nuggets

[00:33:01] [SPEAKER_02]: and we greatly appreciate you sharing your time with us today.

[00:33:06] [SPEAKER_02]: You can find all B&R episodes on Spotify, Apple Music, YouTube

[00:33:11] [SPEAKER_02]: and anywhere else you get your podcast content.

[00:33:14] [SPEAKER_02]: Until next time, keep learning and keep growing.