NUTS & BOLTS
HURRICANE DAMAGE
1. DOCUMENT EVERYTHING Going through a flood is a traumatic expe- rience. It’s likely the last thing you want to do is take pictures that remind you of the pain. However, documentation is imperative, and you need to do it before you start cleaning up or repairing any damage. Our insurance agent told us be sure to document damage using photos and videos before discarding anything. Even more surprising, we learned we should retain samples or swatches of carpeting, wall- paper, furniture upholstery, window treat- ments, and other items for the adjuster. This is especially important when the type and quality of materials may impact the amount payable on the claim. Properly documenting damaged property is critical for your flood claim, so take your time and do it right. While you should document all damage, home stagers should have insurance to cover the cost of the furni- ture and their inconvenience. 2. BE PREPARED FOR LOTS OF INCOMING LEADS In our house-buying business we are accus- tomed to calls from motivated sellers in a divorce situation, who inherited a property, or now, have a flood house. We have received countless calls from homeowners who would rather sell than repair the damage to their homes. I have been surprised by the number of people who live near the water that did not have insurance. I’ve heard, “It’s never flooded here before,” over and over again. A lot of
When Hurricane Irma tore through Florida in September 2017, the storm left incredible, lasting damage in its wake. Photos courtesy of John and Corrine Tesh
5 Hard Lessons from Hurricane Irma INVESTORS FACE CERTAIN TOUGH TRUTHS AFTER NATURAL DISASTERS.
by John Tesh
In this home, water damage necessitated the removal of the entire second-level floor and the sheetrock from the ceiling on the first level.
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ou’ve just completed your latest rehab in Jacksonville, Florida and it’s a few weeks from going on the market. The property is a short walk from the St. Johns River (a highly desirable area), and you expect it to sell in less than a week. There has been a tremendous response to drive by traffic because the open house is advertised on the MLS and Zillow. The “Com- ing Soon” sign is out front. The stagers have lovingly furnished your house with the newest trends and it’s time to list. You are ready for everything – except a hurricane named Irma. This is just one nightmare scenario that we (and investors and homeowners just like us) have faced since that fateful day in September when there was massive flooding across almost the entire state of Florida. We grew accustomed to the news showing people being rescued from flooded homes in boats. Power was out for days. Roads and bridges were damaged everywhere. The greater Jacksonville area was declared a Federal Disaster area, and FEMA and insurance companies had tents and RVs set up in shopping center parking lots to assist in claims. Homeowners have a hard enough time dealing with disas- ter-related damage. When you are dealing with one or more
investment properties, things often get even more compli- cated. For example, in the scenario above, you will have the following questions (and probably many more): • Are you responsible for the stagers’ furniture? • How do you make sure you get paid for everything that was damaged? • What should you do to make sure the adjuster under- • Who pays for shingle damage? • Who pays for flood damage? • How long until you get paid? • When can you start repairs? • When will the property be available for sale again? • Is now the time to buy more properties? The list goes on and on. Here are a few things I have learned from my experiences investing in Florida in the wake of this disaster that may help you answer a few of these queries. stands the value of your property? • Can you start repairs on your own?
quite likely find yourself with a number of leads you might not have been expecting. 3. HURRY UP AND WAIT Recently, we made an offer on a house the owner bought just last year. They moved in, were flooded out by hurricane Matthew, and then were hit by Irma 11 months later. Thank- fully, that homeowner had flood insurance, but he wanted to sell anyway. Why? As of October 2017, he had still not been paid for flood damage from Matthew, which hit our area Oc- tober 7, 2016. The house was not livable, and the family had been renting an apartment since then. There was no timeline for when the claim might be paid, and he is still negotiating with his insurance company. Al- though he received a small check initially to cover moving and living expenses, the larger claim remains unpaid because the system is simply overwhelmed. Be prepared for a lengthy
owners continue living in flood-damaged houses although no remediation of any type has been done because they simply have nowhere else to go or think, originally, that somehow the situation will not be that bad. In some of these cases, we found mold growing on every surface water has touched by the time they called us. We try to stress the danger of contin- ued exposure to living in such an environment, but for most who opt to do so, there is no other option. Entire neighborhoods’ home values have plummeted. Homeowners are reaching out to investors like us because right now, retail buyers simply do not want to buy near the water. They are afraid to do so. Furthermore, most retail buy- ers will not invest in a flood-damaged home because of the mold remediation and other specialized repairs that owning such a property will require before they can move in. If you already have an investing presence in a disaster area, you will
98 | think realty magazine :: january 2018
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