J Darrin Gross
I'd like to ask you, Ben Spiegel, what is the BIGGEST RISK?
Ben Spiegel
So, land, like I said, we were talking on our economy. When we started our conversation before the podcast began, landlords are Sue land that landlords sued 25 times more than the next business than the next highest sued business. So we're already in a very elevated risk, risk type of business. So I think the major form of risk obviously, when you have ambulance chasers out there looking to profit off of almost any opportunity they can. And so it depends really, it for example, I own a multifamily in Bridgeport, Connecticut, which is, you know, about an hour away from me, and I found a tenant was putting marbles in the lobby, to try to encourage a slip and fall because she's unhappy about her current lease situation. I mean, I've really, I've seen it all. And so but what I went, I think what it comes down to protecting yourself is, when I first started and to give advice, when I first started in this business, I'm just looking to just minimize expenses, minimize expenses, minimize expenses, go with the lowest cost insurance carrier possible, whoever offered the lowest premium I'm dealing with. Now, after having over having over a decade of experience in this industry, I am more than willing to pay a premium for my insurance provider, knowing not necessarily that my deductible is lower, but knowing that they will be there to cover me. If it's not, it's not if it's when I was going to be sued by a tenant for a slip and fall, or maybe there's asbestos in the building, I don't know about that somehow found there, it really can be a there's 100 different things that can be I'd say that, you know, the, the greatest risk is just, it's just being a landlord and being in the position that provides a you're providing housing to people and that the what I guess what I'd like, you know, is just to really not skimp on insurance expense. And, you know, in terms of just like overall risk, I think we're seeing it right now, especially in syndication, a lot of syndicators, were willing to go with variable rate loans, you know, four or five years ago, just to get a lower rate, you know, overall rate in that in that moment, not looking at the future in terms of how rates could move. So that just comes back to just the general principle of having a longer term hold view of your investment, and really be willing to sacrifice a little bit of cost up Friday to potentially to hedge yourself for the long term environment. So that's what I would say on the I, in addition to just general liability and business replacement, business, income replacement insurance, also just in terms of when you're just kind of have a long term view when you're looking at financing and really tenant selection, and even the build quality when you're doing renovations, when you buy a building that has deferred maintenance Are you just going to put a bandaid on it and move along and just keep chugging along. But what you find with that is, you know, a couple months later, there's 20 More band aids as opposed to just biting the bullet in the beginning. Spending the upfront cost is uncomfortable and it's not it doesn't feel great in the moment of sort of curing all deferred maintenance just immediately after acquisition. But I am telling you, it will save you money in the long run over the long run. And it's in my opinion, it's a huge competitive advantage if you're willing to have have that operating strategy.