Think-Realty-Year-End-2017

NUTS & BOLTS

HURRICANE REPORT

Images courtesy of John and Corrinne Tesh.

Lessons Learned fromHurricane Irma A FIRSTHAND REPORT ON DEFENDING REAL ESTATE FROM WEATHER NIGHTMARES.

Clockwise from top left: Beach-front devastation in the wake of Irma, John Tesh repairing a window on one of his rental properties, a kayaker retrieving a homeowner from a submerged property, and fallen limbs piled up after cleanup efforts had begun.

by John Tesh

T

he house buying business is challenging enough with- out Mother Nature throwing us curveballs, but that certainly hasn’t stopped her recently. Here in Florida, we have seen storm after storm roll through our cities, and it has cre- ated quite a mess. Having moved our real estate business here within the past eight months, my wife and I had never faced all the fury that Florida weather has to offer. That is no longer the case thanks to Hurricane Irma. When Irma came barreling through Jacksonville, we had five houses in various stages of rehab. We learned several lessons firsthand about how to best protect our assets. LESSON #1  DON’T CLOSE BEFORE THE STORM If at all possible, try to push back closing on a property until after the storm. You can reassess damages afterwards and possibly renegotiate the price downward. LESSON #2  CHECK AND DOUBLE CHECK YOUR PROPERTY INSURANCE If you already own property in a weather-threatened area, make

sure you have proper insurance coverage. If you live in a flood prone area, then by all means get flood insurance and check with your agent to make sure you have wind coverage as well. Be alert and proactive. When a hurricane is approaching, insurance companies will not issue a policy after storms are within a certain proximity to the property and you may not be able to get coverage. LESSON #4  TAKE AND DOCUMENT PREVENTATIVE ACTIONS Some of our preventative actions really saved us from having more damage than our bottom line could have sustained. We took pho- tos of the current condition of each house, walked each property with our contractors, and compiled a long to-do list for the crews. That list included: • Cutting low-hanging limbs over the roof • Cleaning out the gutters

During a hurricane, a piece of plywood can become a missile that destroys your own or someone else’s property. We also walked the property boundaries to make sure all drains were open and checked that nearby storm sewer drains were free from any debris. LESSON #4  ESTABLISH A CONTINGENCY PLAN WITH TRUSTED CONTRACTORS Once the storm is over, we always have a contingency plan with our contractors that puts us first in line for repairs. With Irma, we were lucky that all we had were limbs and a few trees down. Our yard guys were there the next day cleaning everything. Pretty soon, it looked like nothing had ever happened.

properties. Hurricane Irma has definitely affected that side of the business as well. After a brief pause, the phones are busier than ever and we are buying houses again. We are seeing sellers in flooded areas who are “just done” and want out of the house and sometimes the area entirely. We are encountering properties with flood damage, holes in roofs and walls from trees, and lots and lots of downed trees. Because our area has been labeled a federal disaster area, we are getting help in debris cleanup from FEMA and our local government. When you work with sellers who have decided to sell because of a natural disaster, you have to be able to work with their insurance companies as well. This can be challenging, and you can follow our progress (and learn from our experiences) in my next article. •

• Boarding up large windows • Turning off water and power • Securing building materials outside • Putting tarps over dumpsters

HURRICANES AND HOME BUYING Above, we have explained how a storm can affect your rehabs underway, but our business has another side, buying

John Tesh is a residential real estate investor based in Orlando, Florida, where he and his wife, Corinne, own Citygate Homes LLC. He may be reached at john.tesh@homevestors.com.

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