Our guest today is Boone Tyson, a real estate investor in Texas. In this unusual episode, we go through one of his specific deals and talk about what went wrong with it, how he solved it, and how we can all learn from his experience. If you deal with insurance and want to make sure that it’s actually going to take care of you in a claim scenario, then this episode is for you! Learn more about Boone and his journey at reiclarity.com!
“I got a call at like 3 pm or 3:30 pm that the house was on fire.”
Boone is a real estate investor in Texas with a portfolio of cash flowing properties and flips.
In February 2020, he closed on a deal that he purchased from a wholesaler for around $85k.
Due to the emerging pandemic in March, the work got delayed significantly, but luckily, they were able to put the property under contract for $165k. Unfortunately, just a few days before the closing date, Boone got a call that the house was on fire. The vast majority of the main living area of the house was damaged. Boone had to act fast, so he stopped the deal to avoid lawsuits or any more inconvenience.
“I really expected our insurance agent was just gonna go to bat for us, and that’s not what happened.”
After the accident, Boone called his insurance company and filed a claim. The insurance process lasted for around a month.
Over time, Boone noticed that the relationship with their local insurance agent became dodgy. They didn’t receive as much help as they needed. He now knows that the insurance agent sold them a rental policy instead of a flip policy and that caused many problems.
“The opportunity costs on this were bigger than anything else.”
After all this went down, Boone had around a $25k loss instead of a $35k profit.
His idea was to flip 2 houses and by the time they are finished, the damaged one would break even. This would take around 6 months.
Eventually, they connected with an independent insurance agent and were able to put the property under contract as well.
Boone’s advice on how to avoid what happened to him:
- Ask the right questions and fully disclose the nature of your business.
- Work with an insurance broker instead of an insurance agent of a company.
- Get over your ego and realize when you should move on from a deal.
Mentioned in the show:
Learn how to grow your portfolio and reach incredible success the right way! Visit us here for everything you need to know: www.shineinsurance.com/reiclarity.
Special thanks to Boone Tyson for taking the time to share so many great insights with us
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Show produced by Eni Horvath