Epic Real Estate Investing - Florida Insurance Collapse = How to Grab 0% Mortgages | 1477

Episode Date: April 28, 2025

This episode explores the challenges Florida homeowners face with soaring insurance premiums and insurers exiting the market. It provides a step-by-step guide for investors to capitalize on these market conditions through creative financing, such as offering 0% interest seller financing, using high deductible insurance plans, and incorporating parametric policies for rapid payouts after major events. The strategy aims to benefit both sellers and buyers by mitigating the high insurance costs and turning potential disasters into financial opportunities. Additionally, Matt offers a look at broader applications beyond Florida and previews upcoming content on new financial challenges in the housing market. Learn more about your ad choices. Visit megaphone.fm/adchoices

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Let's go. Breaking. Free insurers just bailed on Florida. Florida. Another slap to the face to Florida homeowners tonight. And home insurance bills jumped 50% overnight. Went up to 2,411, so we had a $617 increase. Now it's up to $3,800 a year. And I'm still less than half of my neighbors in the area. Oh, instead of paying $25,000, now you're going to pay $5,000. Most owners can't pay, so they'll give you the house at 0% just to be free from insurance premiums. Watch this. Property owners in multiple states are facing skyrocketing premiums and hard to get coverage, but the insurance industry itself says Florida's market is in full meltdown.

Florida boasts sunshine and gators, but right now it's bleeding insurers. State farm, all state, they ghosted faster than a bad Tinder date. This week alone, three more carriers filed exit paperwork. For Florida's insurance landscape, it was Groundhog Day. And citizens' property insurance just voted to raise its rate cap another 14. percent for 2025. Well, the state's largest home insurer, citizens property insurance corporation,

is raising rates for hundreds of thousands of its customers. In FEMA's latest flood zone redraw, even Governor DeSantis is scrambling for patchwork subsidies. Translation, premiums aren't just high. They're erupting. The average Florida premium is now five times the national norm. A market watch estimate says new tariffs could tack on another $464 a year to coastal policies.

Meet Dom and Lisa from Pensacola. WUSF caught them on camera last month. Their insurer quit. Quotes came back at $11,800, and the couple flat out dropped coverage. They're one hurricane away from financial ruin, and a for sale by owner's sign is already in the yard. Multiply Dom and Lisa by hundreds of thousands, and that's the opportunity. When insurance costs make a property unsellable, banks slam the door. But what most buyers don't realize is, the owner,

can become the bank. Here's how this works. First, you empathize, then solve. The insurance racket is brutal. Let me eat that headache for you. Then you offer seller financing at zero to two percent interest. Lower interest equals cash that you can redirect to the bloated premium. Then you lock it in for five to ten years. Every payment builds principle, not bank profit. And then you use a high deductible policy or wrap under a master portfolio plan to slash the premium further. Getting insurance in Florida right now is probably the hardest it's ever been. In the last 18 months, 15 insurers have stopped writing new policies. Three have voluntarily withdrawn from the market,

and seven companies have been declared insolvent. All right, here's the step-by-step recipe. Step one, hunt the hot zips. Start with counties where citizens is overbooked and private carriers are fleeing. Step two, pull the pain list. Search listings tagged cash buyers only, uninsurable, or needs new roof before coverage. If you don't have a realtor that can do that for you,

seller-sniper has that information readily available. Step three, make the pitch. I'll take the property and the insurance nightmare. You finance me at 0%. You get steady checks. I get the house. We both sleep again. Step four, paper it right.

Use a wraparound mortgage or land contract, or just a simple mortgage will do. Escrow for taxes and insurance and record everything. Step 5, protect your downside. Budget for high deductibles. Consider adding a parametric her. Hurricane rider. Remember, you're swapping interest expense for insurance expense. Run the numbers. And don't let the labels like interest, insurance, premiums, deductibles. Don't let all that get in the

way. It's all just pluses and minuses. Do the math. And either it checks out or it doesn't. If it doesn't, move on to the next one. Back to Dom and Lisa, they couldn't offload their $11,800 premium. So a private client of mine, Shane, offered zero percent for 10 years with $5,000 down. That created a monthly payment of $1,250, all going to principal. Shane then wrapped the house into his portfolio policy, chopping the premium by 30%. Dom and Lisa walk away free with mailbox money, and Shane owns a new cash flowing asset that no bank would touch. That's the playbook, rinse and repeat.

And if you're worried about finding your down payment or that first monster premium, loophole lending.com. It's a legal bank loophole, not regularly advertised that can get you up to $150,000 also at 0% interest. It's the same trick that Shane used to fund his first storm zone deal. Check it out when we're done and don't say I never told you. First question, what if another hurricane wipes the place out? High deductible parametric policy plus seller note means lower leverage. Worst case, you still owe some principal, not bank interest. But here's how you can protect yourself and how this all works in plain English. First, the high deductible. This is the cheap part. You agree to cover the first chunk of

damage yourself, say the first $25,000. Because the insurer's risk, isn't as high, your annual premium drops hard, often 30 to 50%. Two, parametric, the fast part. Instead of sending an adjuster to count broken shingles, the policy pays a preset lump sum when a clear trigger happens, like a Category 3 hurricane passes within 30 miles, or wind speed hits 120 miles per hour. No receipts, no haggling.

If the trigger is met, you get the cash, often within days, and fix things however you want. So why pair them? Well, the high deductible keeps everyday pay. premiums affordable. The parametric payout gives you a rapid cash shot precisely when a big disaster strikes, helping cover that large deductible and any extra repairs. The bottom line here is you're swapping a fat monthly bill for a leaner one, a much leaner one, then backing it up with a trigger-based safety net that pays fast when the real monster event hits. It's perfect for investors willing to

shoulder small stuff but needing a quick lifeline after a major hurricane or flood. Next question. Why would a seller accept 0%. Because 0% percent beats foreclosure. Zero percent beats bankruptcy. They care about certainty, not yield. Next, can I do this outside of Florida? Absolutely. Because it's not just hurricanes in Florida and Louisiana. It's wildfires in California. It's tornadoes in the Midwest. It's severe convective storms hitting everywhere in between. Florida may be the tip of the spear for storm exposure, but it doesn't stand alone. Next, what if the seller still has a mortgage? Simple. You handle it subject to or with a wrap-around. First, you take title, but the existing loan stays in the

seller's name. The second thing is you make the payments. Set up an escrow service so the seller feels safe. And three, create a wrap note for the seller's equity at zero percent if you can. If the math doesn't work out, look for just the free and clear homes. 29.7% of all Florida homes are owned free and clear, well above the U.S. average. Right now in Orlando, there are 444 of them on the market. In Tampa, there are 843 free and clear properties for sale. In Fort Lauderdale, there are 161 free and clear single family homes on the market right now as of this recording. So whether you're shopping for an investment property or your next home, there's plenty of opportunity right now. Big insurance bailed, but that just opened the front door for creative investors. Go hunt those

panic listings. Pitch the 0% note and turn disaster into equity. You're exchanging equity for peace of mind. That's the trade. So if you want to get in on this and don't know where to start, there's this thing I'm doing in Vegas this month where I'm showing a small group of aspiring legends how to do this very thing. I put a document in the description for you with all of the details. Check it out. And if you think insurance is wild, wait till you see what the new $18,000 home shock is all about, the hidden bill killing owners in 2025 and how to beat it. I'll see you next time. Take care. And that wraps up the epic show. If you found this episode valuable, Who else do you know that might too?

There's a really good chance you know someone else who would. And when their name comes to mind, please share it with them. And ask them to click the subscribe button when they get here and I'll take great care of them. God loves you and so do I. Health, peace, blessings and success to you. I'm Matt Terrio. Living the dream. Yeah, yeah, we got the cash flow.

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