5. Who's Got Your Back? with Matt Sutika

Discover the incredible benefit of having your investment insured! In this episode, Matt Sutika from Obie insurance brokerage gives a fascinating, in-depth look at large multifamily apartment insurance and highlights the important protection it provides to investors.

LISTEN FOR THIS

• In order for insurance brokers to provide accurate quotes, there will be a lot of analysis and communication between all the parties involved during the acquisition phase of purchasing the apartment.
• It helps to have an insurance broker like Matt who understands the apartment buying process from start to finish and can speak the language. 
• The lender in an apartment deal hires consultants and their responsibility is to make sure the insurance meets the requirements of the lender. This is a good thing from an investor standpoint because this consultant is making sure the asset is covered correctly. 
• A benefit of using an insurance broker, as opposed to deal sponsors trying to source it themself is that you will have experts in the field dissect every line item and guarantee you are getting the right insurance for your specific property.
• Matt gives a brief overview of all the types of insurance that is needed. The general rule of thumb is having enough coverage to offset all your assets.
• The main takeaway from this episode is that your investment is insured.

QUOTES
“So the good thing, from the investor standpoint, is anytime you're dealing here, you have this consultant who is making sure this asset is covered correctly.”

“I'm sure at this point after your audience just heard “taxes and insurance,” they are just super excited of what we're gonna chat about today. But hopefully if they're listening to this, they'll understand that these are recession-proof necessary evil items, if you will. It's part of the overall deal and there are benefits to having some knowledge in these particular areas.”

ABOUT MATTHEW SUTIKA
Matthew Sutika is the Chief Insurance Officer for Obie, an insurtech startup that is leading the industry through tech integrations and broker partnerships to deliver a simple and transparent process for real estate investors to obtain insurance. Matt is an award-winning entrepreneur and business owner in the multifamily and insurance sector.

CONNECT WITH MATT
Website: obierisk.com
Email: matt@obierisk.com
Find Matthew Suitika Facebook, Instagram, LinkedIn & Twitter

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Learn more about passively investing in apartment buildings:
Website: hansenholdings.com
Free Webinar Training: hansenholdings.com/webinar
Schedule Call with Matt: Schedule Intro Call
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Transcript

Welcome to better returns where you will learn how to escape the volatility of the stock market by passively investing in real estate like a pro 90 of millionaires earned and maintain their wealth by investing in real estate we will share real-life examples from Savvy investors so you can do the same he once lost his entire family in the grand Turkish Bazaar and Istanbul your host and my dad Matt Hansen well welcome back to the show I've got one of my good friends Matt Sudika on the on the call here with us and we're going to talk about insurance exciting stuff but it really is and it's so crucial so Matt's the Chief Insurance officer at Obi the insurance company that we use for all of our large multi-family deals it's a startup company that's been around for oh like five years now so they have great relationship with uh they're they're really kind of a tech company they're great relationships with the Brokers and investors like myself um and prior to going to Obi Matt was um the number one largest State Farm Agency in the United States is that right number one number one fastest growing fast fastest growing fastest growing and you got so big then you kind of merge with with ob and now you're doing even bigger stuff than you were doing the past and you have a bigger budget behind you I know you guys did a reggae raise of like 13 or 15 million dollars and all that so phenomenal background before we even came to Obi and um so we're going to kind of take it off from there again you're one of the key business partners that we have our second largest expense in running in a multi-family or apartment operation number one taxes number two insurance so that's how important this role is in Matt's role in all of the deals that we do so that's a little bit that's a little background you want to say anything more mad about about your company before we get into the case study we're going to talk about today yeah no I think that was a great intro um you know definitely I am sure at this point after your audience just heard taxes and insurance uh that they are just super excited of what we're gonna chat about today uh but hopefully if they're listening to this they you know they're they understand that uh these are you know recession-proof necessary evil items if you will you know it's part of you know the overall deal and you know there is some benefits to having some knowledge in these particular areas that can help you whether you're passive or whether you're actually syndicating a deal so I think I think we'll have some exciting stuff for him it will it will be and you're fun to talk to you so we're gonna do a case study we have a deal right now and it's a 506 C which means it's for accredited investors only but we can openly talk about it so we can use this as our case study so we've got a 227 unit 40 million dollar deal in Jacksonville Florida that myself and my business partners are working on and of course Matt before we even make the offer we're on the phone to Matt we send them all the Deets we know what he needs the property the the year and all these details before we put an offer in Matt's one of the first guys we talked to in Obi and we and so we need to find out okay what are the costs for for the insurance and is really location dependent property dependent but he'll go into that so we're going to kind of do a case study and an actual deal that he's working on right now for us so let's talk about that um Ricardo my business partner underwrote it hey looks good underwriting is a fancy word for economic analysis we think hey we can make an offer on this before we make an offer we call Matt now what do you do Matt what do you do what's the next step uh so you know the next step is at that point is trying to get an estimate for what the insurance right it's uh probably the most difficult thing that we do is this this pre underwriting pre maybe even under contract estimate for the insurance for a lot of reasons one it's probably not at that point probably not closing for three months six months you know who knows right right two uh you mentioned Ricardo in this case study it's going to be Florida you know so you have certain states that can add some different Dynamics right uh some of the the best states for investing right in that return also have you know some of the more challenging you know Insurance things that we got to be aware of they're not uh an issue but you know a little bit um more complex than what say Indiana right um or something like that in the middle of the United States where you know uh or Arizona where they haven't had a claim in 100 years I don't think or you know something like that so um yeah so Ricardo come come to us and you know we usually have an operating memorandum at that point you know hopefully or at least the off-market details and what we're going to try to do is uh and over on our Loi our letter intent team is kind of give a low end high-end uh estimate for what we think this is going to come in at right the reason we do a low end high end is not to just like be vague but to help the syndicator at that time understand the next Journey or next steps in the process right so with the low end estimate we give the estimate but then we give a four five six bullets of like okay this is based off of you know eventually you're going to find out whether it has losses or not uh you're gonna find out about the wiring you're going to find out um you know when things have been been redone right and so what I'm really doing or what we're really doing is we're letting that syndicator know things to look out for right and then on the high end we're saying hey you know based off things coming back with two losses and straight aluminum wiring and hasn't been updated since 1955 right and you when you touch the roof it just Falls in you know it's sandpaper all these things you're probably going to get leaning here towards the high end right try to make both numbers work in your underwriting you know um and then what it really does is this trigger so as you go under contract you start getting those that information from the seller you know you start doing your due diligence you can start to constantly tweak your numbers because I'm telling you the road map of which way we're going you start seeing that there's no losses roofs were redone it's copper wiring all these pretty great things right you're like oh I can probably stick more closer to Matt's low end right all sudden it's million dollar fire loss aluminum wiring uh no updates it's like oh I better get closer here and then if there's things that are Beyond even what's in the high end that's probably where we need to have another phone call because it might even be worse than the the high end right but if I don't give you that road map and I just say hey it's either going to be 300 or 400 dollars per door this is what we used to do years ago and what a lot of Brokers are still doing you have no uh you have no uh Placebo or you have no nothing to compare where those numbers are coming from so you have no reason to reach back out to us or tell us anything different right or to update us so that's been really successful that we do and so that's what we're doing up front from there we give uh you know those estimates and then really the next step is a long process to wait for the lender their requirements and those third-party data right and then that's when we really get kicked in again is you know and that usually happens somewhere anywhere from 20 to 30 days before closing that's a really good point that our numbers are constantly changing when we first put the offer in and then we have to put our create our private placement memorandum and all that a lot of that stuff we have to put in place before we even know really what the insurance is going to look like but that's what's great about what you do there with ob is that you give us a range and we usually take the highest number if that gives us a high number we use the high number because that's worst case scenario that's what we want to plan for and if we end up below that and find oh you know it's not that it's in much better shape than we thought it's great it's gravy you know but we always take Matt's highest number because he's just such a great job of analyzing and you keep us up to date it's constant like you said it's a constant communication it's just not a set and forget it when we initiate it you're in constant contact with ourselves and our general partners and the property manager keeping up to date on what's going on their findings as you get farther into the due diligence I think that's super super great so tell us about okay you've got all the stats for it um you know where the market is how do you go out and actually get us the insurance because you're really an insurance broker correct yes absolutely so tell us what goes in the next step then yeah so the next step uh from there is you know uh I'm starting to come up with who we're gonna go out to Market to so I'm signaling those carriers hey uh we have this risk you know what do you think about it what does it look like it's probably not closing for hopefully I have some type of indication from the you know the person syndicating at that time of when it's going to close hey you know it's going to be December it's going to be I think you know overall you know do you have it do you have an interest right and if you have an interest what does this look like I don't want to nerd you out but we use the term like scent rate which is like our way of like estimating um what the premium might look like and how a cent rate works just for those who are really analytical is they say it's going to be 64 cents you take that 64. you times it by your total insurable value and I'm probably nerdy so many people out right now uh and divided by 100 and that's how you get your your property premium right which is always the the biggest line item uh in the insurance so we're just starting to get that we're probably not going to fully quote it out at that point because most quotes are only good for anywhere from 30 to 90 days so if you're going to be outside of that you don't really want to get it fully quoted but we're just kind of trying to slowly piece things together get an idea of where this is going to be because really it's a full Journey whether it's 30 days to close 60 days 120 days to close of just constantly tightening the the screws right everything we get from this indicator we can tighten or move every response back we get from a carrier we can kind of tighten or rotate a button you know and kind of see what we're going on and we're just constantly moving then the lender comes in and says you know here's the requirements we have here's uh the building amount we need here's the rental income here's the umbrella you tweak it tweak it tweak it and really that's what we're we're doing the whole time and and as you mentioned before on the estimates right there's a lot of Brokers out there a lot of syndicators out there right that I think get that space wrong right you know Insurance I'll use Loosely I'm not going to say it is what it is or the numbers are they are but I see too many people in the industry you know like just pushing so hard to get a low number and so many Brokers just trying to estimate low the numbers just to make each other happy during the underwriting process but it never actually comes to fruition once you go under contractor when you actually have to do it but you know this indicator really wants to deal and has to have it at 500 a door and this broker really wants to earn the business so they'll tell them it's 500 a door right and then it's 900 a dollar right and so sometimes our struggle is as we get new clients or we have new relationships right like because we're very very honest and and my team from Loi to under contract I tell them every time do not make me look bad when this goes under contract like you need to I mean I'm serious right like right right it's called retrading yeah yeah I will tell you if we ever lose a client during that time frame it's because of like a low bid and then we do get that call and it's usually after closing or close to it and it's like you know you were right here I hated your numbers but they were right right and that's uh and we're in a bear market right now too right like bear market for the stocks bear market for everything uh and it's calling it a bear Market might be nice for how things are at the moment right but uh we're in that way for insurance too right and so we're not in a state of great pricing we're not in a state of like on you know Insurance numbers are gonna save a deal here or help your underwriting we're in a state of like accuracy right now right how accurate can we be because I'd rather you walk away from a deal at this point and not do it if you can't get the insurance number other than you know I don't want to cut the proceeds conversation happening because of my watch you know a week before closing or your two days before close that's not going to happen because of us or that's our goal at least right like sometimes things are out of your hands but um because we also like I understand the investing side of things because I've been around you in the you know and the people you invest and work with so I'm like I understand stand noi I understand cutting proceeds I understand that process too and that helps with the insurance piece because I can speak your language and I know it your certain points of what you're doing we're talking about what's the insurance process from start to finish we also we actually understand the process for you as a syndicator start to finish and we figure out where the insurance fits into that and not the opposite exactly you really do because because Matt attends all like you know we have a masterminding group Matt's there with his team it's like phenomenal so he knows exactly what we're doing in that and that another thing you touch of transparency there's no hidden things dealing with the OB you guys are just straightforward we know your good numbers and that's why I think we've done like 103 deals in the last few years I think you've got every single one of them you know in our group because you guys are so good we can trust you we know that okay we're not going to read at the last minute and this is what we're lending Brokers will do and that's why we have great lending Brokers that we work with because if you go directly to A lender sometimes at the last minute they'll oh nope you're not getting 5.4 you're getting six percent and it's a day before close you can't do anything you can't you've got it closely you just have to take it that's why it's important to work with somebody like Matt like we do with our lending Brokers the same thing so how many how many different and so it's based on the pro this properties in Jacksonville Florida 40 million dollars uh based on the location and the age the vintages we call it how many insurance companies usually reach out to based on that criteria there's only x amount that will meet that criteria that are best fit how many do you usually reach out to you know let me let's try it a different way so okay there's hundreds of carriers right and if you imagined uh taking all let's just call it let's just say there's a hundred right that do property insurance in the United States I'm just an example right uh and we have access to the good majority if you know not most of them right you take that 100 and you kind of start at the top right the first thing that happens is what state right and you pick Texas well now 28 of them right Texas so you're down to 20. right and then um call it wiring right it's illuminated aluminum mitigated well now that goes down to seven right that will write that right you know type deal and then you know has a loss oh my gosh now it's down to two right and don't pay attention to the actual like 100 to 20 I know but roughly yeah but more the that's kind of the process so in um particular States right you have less options to start with and so when you lose an option it's bigger you know some states like uh what's called a Tennessee or Indiana or Illinois Ohio some of those ones they're starting with that 100 and every time you add something that you're maybe losing five or ten right in a Texas Florida Alabama like mobile or Louisiana or something like that they might already only be starting out with 10 right and so every time you lose you're losing quite a few um big factors you know as you're syndicating like looking at deals as it relates to Insurance your bill is a big factor um age of Ruth um wiring when things have been updated right uh prior losses from the seller right you know is is a big thing right so those are big items that kind of move the needle as far as carriers right you know you you have a 2010 build place in Arizona that with copper wiring right you have 100 carriers right you have a 1970s in Louisiana with aluminum wiring you might have one if you're lucky right like it can really it can really change and you know our I guess our secret sauce during the LOI process is we kind of know what that is we actually have a homemade if you will built calculator that we use that we've kind of built so as soon as you send over that om we're we're doing that and we kind of know what players we have and then that's what we put in that high and low end kind of like hey based off of reviewing this here's the only factors we see that are unknown at this point that might uh tweak things as you get under contract got it got it well I didn't know it got titrated that quickly and I can see particularly in the more challenging um environments that some popular Florida for example we know that okay so that's that's how you find it I'll talk let's talk a little bit about the coverage and this is where as an investor they want to know you know the bank of course dictates a lot of the lender dictates it that's our biggest business partner they only usually own about 70 percent of the property or whatever and 30 are limited partners so what does the bank require you and how does that protect the passive investors so tell them a little about the coverage and stuff it's much different so residential yeah absolutely so the the lender will hire what's called a lending consultant right so there's groups out there that uh Arbor or Bancorp or whoever will hire right and they're like a consulting company and their responsibility is to make sure that the insurance meets the requirements of Arbor or of Bancorp or whoever right and that's to us on the internet inside we are going to go back and forth with to make sure I think every cover so the good thing from the investor standpoint is anytime you're dealing here you have this consultant who is making sure this asset is covered correctly because if they're at 70 right on that asset you know they care most right good better otherwise more than even the investors right like they got a lot of stake in it so they're going to make sure that it is covered the way they think that they're running their own appraisal they're getting their own replacement costs right and very rarely do they come off those numbers they're very like here's our minimum requirements now we can go more if I'm sitting there thinking like we should or whatever but normally they get it pretty accurate as far as you know where they're coming in and they're going to dictate you know 99 of this deal as it relates to Insurance like I said what's good about that is you know you have multiple set of eyes on the coverages you you know the other side of it is you know potentially that's where some of the increases to cost come because they might you know have a little bit higher replacement cost they might protect themselves with 18 months or 24 months worth of rent compared to just having 12 months of rent you know certain deductibles they might require or they might have a higher umbrella limit but those are usually the kind of the things where we stay and you know I think rest assured like it gets covered correctly the really the only variables come down for this indicator or you know in general as usually relates to deductibles that's kind of the choice that a syndicator can and can make right this is always a a tricky subject right because when a syndicator is going through uh a deal right it you know they're in a position of got to get as best insurance costs as we can at the risk of like how big a deductible might be if the claimer right right so we knew this and we actually implemented this call so anytime after closing we do a call two weeks later with whoever is kind of in charge of the deal who's going to maybe run operations afterwards because we know that it's just like ready to the Finish Line you know get the deal closed we then have this call where we go over hey here's how your your deductible here's how it would work and then here's some options like deductible buy Downs or you know uh or we can make a change you know to you know if that deductible doesn't meet uh you know their needs or you know their their cash flow or different things like that after the close but really getting it to close it's it's very much working with the lender meeting their requirements at the same time trying to keep our pricing as accurate to the estimate for this indicator as possible so it's a lot of juggling uh in the air but you know again that's kind of you know what has you know uh made us be very helpful in this area right is that we're used to juggling those conversations and you know keeping these deals in line I didn't know that the lenders had an intermediary like a third party that make sure it's in compliance with their policies and their requirements for insurance I did not know that Matt oh yes yes they'll send us a nice huge email that's you know three pages long and a giant PDF uh of it and really this is where we come into play because we're doing so many deals you know one we're seeing the same lending Consulting people and companies over and over and over again nine out of 10 emails start off with like hey Matt and Dom uh good to work with you again right and why that's important is like we've built that relationship with that consultant I know what I can push back on I know where they're going to be no pushback right um because if anybody reads that initial email they send and the initial requirements there's so many things they just they just throw this black and white rate from you know uh lender 101 class at you right like here's everything we need right right but then we really know it's actually they need this 80 and that's where they affirm so to the point where we have this one consultant that she just like Joe she's like I know I know I know that you're going to come back with X Y and Z yes they're already approved like because they just already know we're coming back being like they don't need this they you know right 10 is enough or whatever but you know if you're not in apartments all day you know for insurance right and you're you know you're doing uh auto insurance and you're doing this type of insurance and your thing and then someone just like hits you up to do an apartment you know you're just gonna follow those uh requirements to a t the reason I know that is I did years ago I didn't know when I first started you could push back I didn't know that like like that's not the the gospel or the like the thing you know I mean and then you find that out so if you're dealing with someone who doesn't know that we see this a ton when we take over a client after they've already like closed like at their renewal and like that and it's always interesting to see the ones where they send it to me and it'll be all those initial lender requirements like like perfectly and you know it's usually the first thing I can point out of like a way like hey like here's a great way for you to you know make a change um because for example for your audience so they can kind of understand like how these are sometimes like like crazy and don't even make sense usually the initial email will will call for a 10K deductible in Texas that doesn't exist right you know I mean you can't even get a 10K deductible right like you know if I have any insurance people listening they're probably like oh yeah you can it's maybe one out of or two out of a couple characters but most part you know they're starting at 25k at 2 right in uh in Florida or Texas so you know that's just a prime example for your listeners to see kind of like what the bank sends you and you got to have someone experience who can kind of dissect that for us it's Dom right now in our office he goes through them line by line and sends them this like uh detailed report of like we're good with this we're not good with this no way no way yes you know all the way down but you know that can save 5 10 15 20K and at a it's called a five cap that's huge for noi right you know just those little things and that's the value of going through a broker because you guys are experts you do it every single day Dom knows and he's already got those relationships so when people try to go off and do things themselves they think they're saving a little money but they're not in the long run it's really risky because the things you're doing okay so what type of coverage just to dumb it down for us like where is the residential stuff where you have flood coverage you know so this is a business so you're buying an apartment you're buying a business so what are the types of insurance that are usually covered for you know orders and the property to dumb it down but to make the translation the coverage is for uh a home or a one unit rental are pretty much the same as 500 unit apartment complex on the general sense you have and I'll go into more detail but you have property coverage you have general liability coverage and then you usually have some form of excess liability and then if you're in a flood zone you would have flood insurance right and I'll start with flood because that's usually the one that confuses people the most is the easy example for one do I need flood insurance is first we can run a report to see if you're in a flood zone and that's going to dictate whether the lender is going to require it or not and then if you're wondering like okay what's the difference between a flood policy and water coverage that I have on my normal uh you know property coverage very simple if water hits the ground first before entering it's what if it enters in any other way through the roof through the sidewall out of pipe uh through a window you name it where it enters it's going to be covered under your property policy you know most most likely right like if I can like the YouTube people if I get that disclaimer like Matt is not claims handling professionals you know the one in whatever like I'm not I'm not telling everybody how their claims are gonna come up but that's the general rule of thumb right is that water hits ground first it's flood anything else it's going to be covered most likely under your your property uh policy so uh leading into property property is coverage for fire coverage for vandalism coverage for wind hail hurricanes tornadoes right and that's covering the actual risk the buildings you know and making sure that if something happens to them and there's a loss you have enough money to you know either fix and or rebuild depending on how you know drastic the loss the other other side of the property is as you can imagine with it being a business you have a fire right those tenants can no longer live there so therefore they're not going to be paying you rent anymore right you still have a you know a performa to hit you still need that rent to come in that's where you have this thing called business income coverage which is the other part to your property coverage that's you know one of the most important things that's going to pay you that income for as many months as it takes to get that rebuilt or you know fixed uh so that you are hold not only for your asset but also financially as it relates to your Revenue um you know and the thing that you're going to be responsible for is a deductible during the property uh deductibles are part of the property insurance and the for those who maybe don't know what the deductible is that's your piece in the action right so you know you have a 25 000 deductible you have a hundred thousand dollar loss you're responsible for the first 25 carrier's gonna pay dollar one after 25 000 up to that hundred thousand you know very simple uh explanation the next is your your general liability right this is anything that's just like the phrase says that you're liable for right that could happen on your on the property if you think of the property is human if you will just to kind of hear it out anything that that property you know is liable for does someone trip and fall on that property uh does someone get hurt injured you know things like that that's general liability of as a syndicated investor it doesn't cover for you for your financial advice right if someone hears Financial advice off here and wants to you know come at you Matt or come at me for you know they they did like that's that's that's your professional liability right so some people when they're syndicating they're curious about that you know does my general liability cover me in my actual syndication business and they it's separate right this is for premises liability is a lot of what people will hear the term and then blast is the umbrella which it just you know the general liability is usually 1 million per occurrence two million in aggregate coverage and the umbrella will sit on top of that to just give you higher limits so you know instead of being at one million in coverage you had a 5 million umbrella now you have actually six million or if you had 10 you're right 11 million and again that's a comfort from the lender and a comfort from the client and you know the the favorite question that anybody will always ask you is how much gender liability or how much liability should I have right and it's the trickiest question out there because I use the example of someone is cutting the grass rock hits little three-year-old boy's eye and he loses his sight how much is that worth right it's it's really that hard to know so you know the general rule of thumb is having enough coverage to offset any assets so that way if someone does Sue then there's enough liability that coveraged it so they can't come after the assets that you have and again for those of you and I know they'll yell at me all the LLC stuff and I know all these other protections but just from a simplistic standpoint that's kind of how that liability will work gotcha that's good and so the message here and I State this when I'm talking to new investors like what other investment can you make that is insured I mean we literally if we have loss of rental income because of some natural disaster or whatever we have insurance for that is anything on the stock market you can buy there's actually insurance against it I mean it's a physical property probably a pretty good it's going to go to zero you know it's like okay it's not like stocks and bonds where it's a piece of paper this is an actual physical asset and that's why we have OB and you Matt to make sure we're protecting their interest and it's a it's a yeah a business decision right you know for your investors for your syndicators um you know we try like I said we try as much as we can to have these conversations it really comes down to the deductibles right right you know the assets are going to be covered for a replacement amount right they are going to have coverage for insurance related items right like it's not a maintenance policy right like so you're you know if there's you know things like that so anything related to an insurance loss you should be covered correctly and then the business decision is this the deductible right one yeah lender weighing in but two USS indicator you have to and this is the conversation we'll have with uh these individuals after it closes you know are you what happens if you had a loss due to this this or this right do you have that deductible on hand you know uh yes you know could you get it on hand would you have to raise would you not have to raise would you do it out of pocket up to a certain limit those are the items that I can only provide like what it would do you know this indicator or investor or something like that those are the business decisions as it relates to Insurance uh do and you know the best operators are really taking that into account right they're they're thinking like oh I have this property three five seven years whatever the time frame the odds are I'm gonna have one deductible related loss in that time frame it's just on odds right so I need to make sure that at any time a claim happens I'm ready to I got this amount of money ready or here's how I would get it and if those two you can can't do you need to adjust your deductible you need to do a buy down you need to we need to endorse it lower we need to make Corrections it's the only thing we really can't do for you is make that business decision we can let you know about it we can tell you how much it is you have to come to us and say hey that's too much that doesn't work and then we have options for you but that's really the only place where we can't totally take you over the Finish Line um is that one business decision and The Operators are taking these phone calls with us and we're usually able to step them through that exactly exactly that's right because it's based on the business plan and the if it's a Class A property or Class C property our decision is going to change based on that so yeah you guys give us all the data to make that decision look like we're super high deductible super low or something in between and we just need to make sure we have cash reserves there and that's part of our contingency plan or stress tests being factored that into all of our analysis absolutely insurance is very simple right the higher deductibles the lower premium the lower deductibles the higher the premium and that's that's the one decision you get to make as an operator is what's my best thing for my buck is it and how much risk do I want to take I mean insurance is risk right and that's really what you're are doing for your your property and for your investors is you're making that decision and you know um but as an investor that's that's the biggest risk you have is that deductible really in my opinion right um you know if you have an insurance loss you're going to be taken care of you're going to be made whole you know you're going to be now it's gonna be a pain in the butt to go through a large loss like it's it's uh it I always say it's inconvenient not catastrophic right that's the really the thing like it's not gonna be fun but um so yeah so if you're you know if you're listening and and you are syndicating or you are doing operating I mean uh always an important conversation to have if you haven't already is with your insurance broker of the deductible something it's the key piece right that's what that's one big expense well our time is coming to a close here that's like a master class on large multi-family insurance and what it means and how our investors and the property and everything everyone's protected and it's such a such a crucial crucial thing like I said second largest expense that we have so to get you to know you a little bit better Matt I got a little rapid fire five questions that are kind of fun okay the first one is and this is an interesting one what was your nickname as a child um I had I had Splat I think by my dad and then I had [ __ ] by like friends when you're in school not super and then my grandpa was mephu you know but so I didn't I didn't have that great so it was like uh Sudi Mad Dog you know not that creative right where I apparently I was born and raised you know they were just uh little variations of my first or last name what was the first one when your dad called you splat what's that Splat um I must have like ran into something I don't know but I just remember him you know calling me that uh here the the biggest one was Suds uh that I hated at first and then I grew to like it and it was just I was over at a friend's house and their little like three-year-old brother mispronounced my last name and said it was Suds and then you know of course all my like 11 year old 12 year old friends uh decided to pick on me up you know for that for for the longest time you know so okay that's pretty good because mine was mouthy matte so yeah I was waiting for something something like that but yours are much better than mine now you know the the plan words I I did have mashed potato mad at one time and that's just because I wasn't paying attention in math class when they were going through where you had to say your name and then something you liked and so for some reason mashed potatoes came to my mind um probably if I did that one over again I could have probably figured out another M thing that I liked better than mashed potatoes but you know it worked okay the next one um if you were to sing a karaoke night what would it be what song would you sing I might do downtown train uh by Rod Stewart okay that's pretty good that's a good song morning or night night owl morning or night owl morning person or night owl uh I have a one-year-old so uh both uh right now uh but historically I was a night owl um and then if you could live anywhere in the world where would it be to be honest with you uh boring but I moved to Florida in the Sarasota area in the last two years and right now I've never been happier uh in a location than I am I I feel like I'm on vacation and it's the first time that we got to pick an area of work to live that wasn't like work related um and I think that's what I like about it most a fun one um Barcelona would be a a fun one you know I've always enjoyed my time there by the water good food good drinks things like that beautiful beautiful and then my last question is um what's one piece of advice you would give to a new investor to help them get better returns because I know you're an investor as well so what's one piece of investing advice what your investor hat on uh 100 it this one's easiest is invest with an operator or someone that you trust I think when it comes down to investing you know and I work with so many investors around the country and see you know some go better than others and some do really well but you know what I really wanted as an investor for myself especially in the real estate is I want to sleep at night and if I'm so worried about the returns I must not have faith in the person I put my money with it's the same thing as stocks or anything else right if I if I don't buy if I don't buy a stock that I can just walk away never look at it and come back in five years I'm gonna look at it every day and it's gonna I'm gonna drive enough I don't have a real trust in that company right and so that's been my real estate investing is and I'm fortunate to get to see how operators after the close happen how they handle claims how they how they go so for me 100 is I'm investing in the person and not the risk you know um you know maybe this is bad for your viewers but I'm not I'm not detailing looking into this I am looking at if if a Ricardo calls me who I've been you know invested in you know before I I like you know I like him I've seen action I'm I'm an invest in that if you know if Mark call or Brent or you know any of these individuals that we're doing deals for I'm in on their deal because I've seen their back of their bubble gum card and that's that's what I'm interested in right and the last piece of that well why that's important is I don't care about the ceiling I care about the floor and most people chase the ceiling so they'll just whatever shiny object or number that looks good I want to know that I'm investing in the person that when [ __ ] hits the fan or you know when things go wrong They're Gonna Save that deal right they're not I'm not going to lose as much with them they're gonna do right by me uh that's who I care about the return of my money is always more important than the return on you know from my perspective right cash preservation yes very good advice very good advice well so one one last thing how can people get a hold of you if they want to work with you the fabulous Matt sudika and Obi uh easiest two things any social media platform I'm under or just you know Matthew sudika there's no other uh Matthew out there so very easy to find I love any of the direct messages from there um you can text me if you have my cell phone number or you can uh shoot me an email at you know Matthew obrest.com outstanding thanks so much for being on the show Matt you brought a lot of value and hopefully made it clear with the the value that the insurance broker brings to a deal and how important the role is so thanks again Matt we'll be talking soon take care and that's a wrap thank you for listening to better returns brought to you by Hanson Holdings if you enjoyed this episode please leave a five star review because it helps others discover this valuable content if you would like to earn truly hands-off passive income go to hansonholdings.com where we help you invest in large apartment complexes to grow your family's wealth see you next week with another awesome episode have a great day