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REAL ESTATE Fire!!

kurtyordy

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Aug 28, 2007
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I own a 16 pad trailer park, plus the trailers. Today when I was leaving work I got a call that one of my trailers burned down. Fortunately noone was injured. The fire was caused by a contractor putting in a new sewer line for the township and they hit a gas line. Turns out the gas company did not mark the gas line, so the fault lies on them.

The adjuster for the gas company is sending out an appraiser tomorrow to appraise this 30 year old trailer. Book value of this trailer is about $1k. However, I was recieving rent of $400/month for this trailer.

So the question is, how hard can I push on getting made whole? Another factor is that they no longer make trailers this size, so to replace it, one would need to be custom made to fit in this spot.

I guess a better way to put it would be, I can see them balking at $400/monthX12 months X 20 years, which is roughly 100k, or paying 60k to custom made a new one. So from your experience, is it worth getting an attorney to fight this? Can I be made whole? What is reasonable to expect?
 

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LightHouse

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I would see what the appraiser says before you get all riled up about it. they may have experience in that situation already. Take it one step at a time.
 

TNT

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Aug 31, 2007
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Hear what the apprasor has to say. Then plot your next move but if they only offer you $1k I would consalt an attorney. remember this guy will be working for them not you.
 
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kurtyordy

kurtyordy

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Aug 28, 2007
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no update yet. Still waiting to get a written bid from a demo crew on getting the old trailer out. I think that is all the adjuster is waiting on yet. We shall see.
 
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kurtyordy

kurtyordy

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just got a call, the rep handling my claim at the gas company was in a motorcycle accident this weekend, his wife is dead and he is in acoma. kind of puts things in perspective for me.

On a positive note, spoke to my accountant, he thinks the money i get may be able to be 1031'd into a new property. We shall see.
 

TNT

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Aug 31, 2007
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WOW!!!!!!!!

I hate to hear about anyone getting hurt like that.

Talmadge
 

Russ H

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As andviv pointed out in another thread (about a coworker dying last week), none of us knows how long we have.

Makes you want to stop and smell the roses a bit more.

-Russ H.
 
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kurtyordy

kurtyordy

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Aug 28, 2007
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Success!!! Went back and forth three times. In the end, I got about 1/4 of what I paid for the whole park, so I am happy. It works out that with the replacement money for the trailer, and all the set costs, plus lost rent and other charges, and after I pay removal expenses, I will have about 15 years of profit that unit would have yielded if I would put it back. hhhmmm. 15 years profit, no tenant to deal with, or 15 years of tenant headache for about the same money. Decisions Decisions. Oh yeah, my accountant told me I can 1033 this into a new property, and I have 2-3 years to identify and purchase. So I am using the cash to finish seperating the utilities which I was borrowing the money to complete originally. And I can wait till the bubble is finished deflating before I acquire another. All said, a couple more fire sales would not be a bad thing.
 

Adam

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Aug 12, 2007
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Not a bad deal at all. While an involuntary conversion (1033 roll-over) is much more lenient that the typical 1031 forward or simultaneous exchange, I believe that you are still subject to rolling the funds into a "like-kind" property. I would consult an attorney or a tax-exchange company to determine what exactly a "like-kind" property would be in your particular 1033 situation.
 

andviv

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I'm glad everything ended up being good for you.

I just learned something new... with a 1033 you don't need a qualified intermediary, very interesting. And you also have more time for buying the other property. http://www.tm1031exchange.com/content-pages/1033-exchange.html
 

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CRBFL

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Oct 9, 2007
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Good for you, glad to hear it worked out well.
 

hakrjak

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I've been involved in about 10 insurance claims over the course of my life, maybe 3 auto, and 7 residential property. No matter how high my deductable is, or what the circumstances -- I have never not made a profit when it comes to collecting insurance money. The insurance companies are so easy going, and trying to avoid court that their initial settlement always includes a "little extra" just to make sure they don't have to incur attorney fees and court costs.

- Hakrjak
 

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