I have a potential SB with a couple of properties he’s interested in working on with me. He has what he referred to as a “blanket” policy covering all of his properties (he has more than just these two). Is this a problem? How do I work with this?
Hopefully, “Blanket Insurance” has nothing to do with Linus from the Peanuts Gang.
Over the years, I have seen a few transactions with a hazard insurance policy similar to that which you are describing. In most of those, we simply put together the transaction with a paragraph in the Rider Agreement allowing for the current owner to continue paying on his multiple property insurance policy as their sole and separate responsibility.
Richrd, my guess is that the seller was referring to a blanket lien…which is a single loan secured by both proeprties. This can create a problem if the properties are to be dealt with separately and the lener is unwilling to allow the sustutiton of another proerty in the palceof the one being dealt with.
Perhaps Dr. Moyes can put new loans on the properties and pay off the blanket. Whuddya s’pose Mr. Scott? Or..Mr. Acquisto?
I think I know what he is referring to. I have a client with a portfolio of townhomes all on the same block. He did do a blanket loan for the portfolio of properties and each one is seperately titled but he also has a Blanket Insurance Policy that covers them all.
When he sells off one of the units it reduces his principle balance on his portfolio and his insurance premiums are also adjusted.
So if you did an EHTrust on one of his townhomes it would be still covered by his existing blanket landlord policy and when the RB qualified the purchase, it would be removed from his portfolio and reduce his balance and payment to the bank. All you’d need to do is come up with a payment arrangement that works for the Seller/Settlor and the RB