
If you’re scaling your real estate portfolio and assuming your insurance agent has it covered, this episode is a must-watch. I sat down with Bailey Brown, an investor-focused insurance broker in Austin, to dig into the costly mistakes investors are making when it comes to their policies. From flips to short-term rentals, from builder’s risk to liability limits, Bailey breaks down exactly what you need to know to protect what you’re building. If you’ve got more than two doors and you’re serious about wealth preservation, this is a conversation you can’t afford to skip.
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Hello everyone and welcome back. I am coming at you today from Portugal and I’m very excited to share with you our special guest for the week from Austin, Texas. So thanks for joining us today.
Yeah it’s great to be here. I appreciate you for having me on.
What I’d like to start with as always is how did you get involved in real estate investing?
It’s a funny story actually. My parents have always been in the real estate space since I’ve been a little kid. My dad was a developer and builder for a number of years. My mom was a builder and then in the flooring space for a number of years. And then they kind of jumped into their own personal investing journey in the long-term rental space. So that’s kind of how I got involved. Just personally, I was working on those projects with my dad growing up. So I really developed a passion for real estate and then went to school for real estate finance, kind of learned as much as I could there and now I’ve kind of transitioned into my own personal journey over the last two, three years since graduating from college.
That is a lot of experience, a lot of background, more than average for sure in the real estate space. So I love it. You got the family, you’ve got the formal education. It’s all come together. So what is your personal investing journey looking like now?
So I’m younger to the investing space for sure. I’m 25 years old turning 26 next month. So me and my fiancee were set to get engaged in May and we both have always had huge aspirations to get into the real estate investing space. So really what we’ve done over the last year is we purchased our first investment property in East Austin. Basically purchased a property that was distressed, had to put some renovations into that and we ended up living in it for some time and now we’re in the process of trying to fill it with a renter and get into our second property upcoming in March before we get married. So still new into the investing journey personally, but I do work primarily with investors, so I get to kind of help them through their property acquisition process, help them scale their portfolios. So I definitely have a lot of learning to do, but still get some good experience from working with those investors too.
Wow, that’s amazing. So first off, just congrats. I think a lot of listeners here are going to be like, this kid is starting out right. Like he’s in his twenties, he and his fiance are getting into real estate and building their wealth and everything the right way. So all of our listeners, if you want to give a shout out, he’s going to give us contact info at the end. So you’ll be able to connect and just give kudos and say he’s on the right path, right? Cause this is awesome. I’d love to see it. So you’ve got all of that personal experience and something you alluded to there is you get to work with a lot of real estate investors as well. So tell me, how are you working with real estate investors?
So the way I work with real estate investors is I’m an insurance broker and I primarily cater my business to investors just because there aren’t a ton of insurance brokers out there who know how to insure complicated projects like fix and flips, ground-up construction, that kind of thing. So what I’ve done is I’ve actually built my business to cater specifically to clients just like that who may have large portfolios that they struggle to manage or if they just have a lot of complicated projects and they want a reliable partner to make sure that they’re covered properly without charging them their arm and their leg every year. That’s kind of where I’ve tried to fill my niche and I think it’s been a really great experience like I said to learn from some of those investors, kind of see what they struggle with in their investing journeys, what problems they run into and then try to be a resource for them not only on the insurance side but just as a fellow investor too.
I love that. When I was an active real estate agent, I did the same kind of thing. I focused on real estate investors because I was an investor before I was ever an agent. And there’s just so many nuances to those transactions that aren’t the same as a primary residence. And I know I had a couple of insurance agents that really specialized in investment properties and they were the go-to for every investor client. I was like, call these guys, call these guys. So it’s great that you’re out there in the insurance space, kind of doing what I did in the real estate agent space and just going deep into that investing.
So let’s start, because everybody loves a good story. Can you tell us a good story, either a win or a lesson learned maybe from when somebody worked with a different agent about investors and insurance, something where people can have a takeaway to make sure they’re not falling into this camp or maybe they are if it’s a good one?
Absolutely. Insurance is very complicated. There’s a lot of moving parts, and there’s not really a one-size-fits-all to every single project. That’s why it’s really key to find good partners that are going to make sure that you’re properly covered without breaking the bank. A common issue I’ve seen with a handful of investors I work with is a lot of these guys have huge portfolios and they struggle to find carriers that will cover all of their properties under one umbrella. So they resort to working with maybe not the best insurance company who will offer them coverage for everything. But what they don’t realize is that policy may be covering the property at actual cash value, not replacement cost. To the average person that means nothing, but to an insurance broker, you know that is the difference between a full value check for an investor if they have a house burn down versus getting paid out 50%, depending on how much they’re depreciating that home.
Knowing the different coverage types and having someone on your team that can point those out to you is really important. I’ve seen situations where an investor needed to get a roof replaced, and they had an ACV roof policy. They only got paid out $5,000, and their deductible was $5,000—so they just paid $5,000 for no coverage. It’s one of those situations where having the right policy, keeping costs as low as possible, but not sacrificing coverage, is extremely important.
Right. And so let’s say an investor is listening and wondering: how do I know what I have? How do I know if it’s good? Are there key red flags they should look for?
Yeah, absolutely. Like I said, the big one is actual cash value versus replacement cost. That’s a biggie because that’s where the insurance company is going to depreciate the value of the home, the roof, the furnishings—especially for short-term rentals. Having your property covered at replacement cost is super important. Over the last couple of years, we’ve seen insurance companies sneak that terminology into the declarations page where it says “payment schedule” or “actual cash value,” and it’s hard to detect. So I’d recommend staying away from actual cash value policies unless you specifically want one. They’re inexpensive but provide poor coverage.
Another thing to watch out for: make sure the property is accurately quoted when the application goes through. Some newer insurance agents may pre-fill things based on past applications, and that can lead to issues. The insurance company might send out an inspector, realize the information was wrong, and jack up your rates after the fact. Also, if you’ve had work done—plumbing, AC, a new roof—make sure your documentation reflects that. If not, you could be overcharged.
And a tip: I use ChatGPT when I’m trying to check long insurance documents. Just paste it in and ask it to check for specific terms. Makes it way easier than trying to search yourself.
Yes! Now something else I’m curious about: inspections. It feels like every time I get new coverage now, they come out and walk through the house. Is that just me?
It’s not just you. There’s no target on your back! Insurance companies are getting more strict with their underwriting. Some are offering self-inspections, where you take photos of your own property, which is less invasive. It depends on the carrier. Homes built in the last 10–15 years usually don’t require inspections. Older homes do, because they’re more likely to have claims—outdated piping, worn-out materials, etc. So yes, it’s becoming more common.
Let’s talk applications. Most investors are “A” students—we want to pass with flying colors. Any pro tips for applying?
Yes. Each carrier has a target market—like 5% of all applicants. If you fit that target, they’ll offer the best pricing and coverage to win your business. The challenge is finding that perfect carrier for you. But you can improve how you look on paper. Keep your credit score high. Keep your liability limits high—insurers love that. Someone with $1M in liability is seen as less risky than someone with $100K, because they know if a lawsuit hits, they’re not stuck paying the full amount. All those little things matter.
Such great tips. Okay—investors are always looking for ROI. What kinds of repairs actually impact your insurance rates the most?
Location plays a big role. In Texas, the biggest claims are hail-related, so roofs are a big deal. If you have a new roof, your premiums are drastically lower. Some carriers won’t even insure a 20-year-old roof. In colder climates, freezing pipes and plumbing are a bigger concern. So if you replace plumbing up north, tell your agent—it might lower your rate.
But across the board, a new roof has the biggest impact. Also make sure you’re only insuring the structure, not the land. Insurance companies don’t pay out land value, and insuring it means you’re overpaying.
Let’s talk insurance by strategy. Pick one—flipping, STR, LTR—what should those investors know?
Flipping and renovations, hands down. Most people don’t realize they need a builder’s risk policy during renovations. They think their regular rental or landlord policy covers them—but it doesn’t. If a contractor gets hurt or a fire happens, and the property is under renovation, you’re probably not covered unless you have builder’s risk.
That policy covers the existing structure and planned renovations. A typical landlord policy assumes a tenant is living there. If an inspection or claim happens and the property is under construction, the insurer can deny it. So make sure you’ve got the right policy type and that you’re covered at replacement cost.
Let’s say you’re doing a BRRR. Do you change your policy when you refinance?
You should change your policy as soon as renovations are done. That’s the best time. Most people do it at the closing table of the refi, which works too. But once renovations are complete, you should have a tenant policy or a rental policy, not a builder’s risk. It saves money and ensures you’re actually covered.
Also—if you’re doing STRs, make sure your policy endorses short-term rentals. A lot of major carriers like State Farm or Liberty Mutual don’t allow it. If you forget to disclose it and a claim happens, you could be in big trouble.
What about flippers—can they keep the builder’s risk policy after renovation when they list?
It depends on the carrier. Some let you ride it out until sale. Some require a new policy once renos are done. Always ask your broker to be sure. We’ve seen horror stories where a company finds out the house is vacant or listed, and cancels mid-term. That hurts your insurance score and causes all sorts of issues.
Are builder’s risk policies more expensive than landlord ones?
Depends on the project. There are true builder’s risk policies, which are more expensive and don’t offer refunds. But there are also vacant dwelling policies that include builder’s risk endorsements—those are more flexible, and many offer refunds. That’s what I recommend to investors doing flips. More flexibility and not stuck eating that premium.
This has been incredible. I think there’s value here no matter what kind of investing someone does—flip, short-term, long-term. Thank you for dropping all this wisdom.
Let’s wrap with a few quick questions.
What’s your go-to tool for managing operations?
Honestly, good mentorship. I have a mentor here in Austin who’s helped me through the process and my dad as well. I only have one property right now, so I manage it manually. But for larger-scale investors, using AI and automations is key. I’m just starting to explore streamlining finances and backend systems more.
One piece of advice you’d give your younger self?
Start sooner. I was scared to pull the trigger on the first property, even though I knew how to do it. Also—find a mentor earlier. It’s helped me navigate so many challenges.
A book that changed your mindset?
Rich Dad Poor Dad. It completely opened my mind. I grew up thinking you get a job, buy a house, and work until retirement. That book showed me there’s a different path. It was the catalyst for my real estate journey and wanting to build wealth for me, my fiancée, and our future family.
If someone wants to connect, especially in Austin or for insurance—how can they reach you?
You can email me at bailey.brown@goosehead.com or text/call me at 512-491-3797. Happy to answer questions, give free estimates, or just connect with fellow investors.