I have 2 single family properties under contract effective 9/1 from the sellers. I will be doing sandwich lease purchases with them. I’m using the month of August to advertise for tenant/buyers. What kind of insurance do I really need? My business operates as a LLC, but I don’t have any kind of business insurance. I talked to an insurance agent who said that I need a business policy, and that I need to have separate non-owner occupied policies for each of the properties under contract. An insurance agent quoted me $800 on one and $900 on the other (replacement value even though I don’t own them, $1000 deductable, and $500,000 liability). However, the property owners already have homeowner policies (non-owner occupied). Is this agent just trying to sell a lot of insurance? or do I really need all of that? or just some of that?
I’d appreciate any and all input.
In a sandwich lease situation, you are a tenant – a renter. The property owner should have his homeowners insurance policy converted to a rental dwelling policy. Your tenant-buyers (your sub-tenants) should have their own renter’s policy to cover their own personal property.
Whether or not you purchase some sort of liability policy for your business is your own decision based upon your perception of the risk to your personal assets.
I don’t see that you have an insurable interest in the property itself. You are not the owner, and you don’t have a lien on the property.