If you’re looking to add vacant houses to your portfolio and you’re having challenges, keep reading …
Hey, Cam Dunlap here. I’m letting you in on a sneaky little loophole that most people don’t know about in a policy that nearly every person has.
And, you knowing about this little loophole is going to help you do more vacant house deals when you use the info that I’m about to share.
Tips for Investing in Vacant Houses
So, I was recently reminded of something that’s now so ingrained in my investing process that I sometimes forget to call it out.
I was having a conversation with some mentorship students during our coaching session. We were talking about vacant house deals (and zombie properties, but that’s a different conversation). I suddenly realized that something that comes second nature to me after all my years doing this… doesn’t necessarily mean its second nature for other investors.
What is it?
A very powerful motivational vacant house trigger.
It’s something that most sellers of vacant & distressed properties are completely unaware of, and in most cases, immediately heightens their level of motivation over the property.
Again, I’ve been abundantly aware of this for many years, but most newbie investors and vacant house owners aren’t — it’s about insurance.
When a house is sitting empty, depending on the policy, there’s an excellent chance that even though insurance is being paid for — if there were a loss while it’s vacant, the insurance company could point to language in the policy and deny a claim because of that vacancy.
Ouch, right?
Look, don’t think for a hot minute that insurance companies aren’t always looking for a way to deny your claim. They are. And the bigger the claim, the bigger the army of people they’ll put on it.
I’ll say it again: They’re always looking to deny your claim.
Sad but true.
Frustrating and still true.
Here’s how it works:
- If you have a homeowner’s policy, like an owner-occupied policy, there’s language in there that permits a period of vacancy of almost nothing. Nada. Zilch. Zero. Goose egg.
- If you have a landlord policy, it may permit up to 30 days, which is pretty typical since there may be a vacancy between tenants.
- If you’re doing rehabs, you probably have an insurance policy and also a supplemental builder’s risk policy to cover the construction period in that period of vacancy as a supplemental insurance product.
Vacant Houses are my jam
See, many sellers/owners of vacant houses are already motivated for whatever reason. A vacant house is a clear sign of motivation of some sort…
That’s exactly why I love vacant house deals, and why I created the Vacant House Bank and the Vacant House Data Feed — it’s like having a crystal ball to define off-market properties that your competitors can’t.
So, as you work with vacant house sellers, it’s important that you work this insurance policy ‘gotcha’ into the conversation. They probably don’t know about it… that even though they’re paying for insurance, the property may not actually be covered because it’s vacant.
So what does that get you?
Well, 2 things…
- If the seller is unaware of it, you’ll certainly help them better understand their situation. Good job, you.
- And, there’s an excellent chance you’ll take their motivation level from wherever it is to something much higher, which is a good thing for you in terms of doing vacant houses deals.
See, when I learned about this loophole ages ago, I immediately added it as a part of my negotiation process when I’m working with any vacant house seller… same for my mentorship students.
And I wanted you to know about it.
Now, go do some vacant house deals!