Matthew Sutika, Chief Insurance Officer at Obie
You’re listening to the real estate of things podcast, Matt Sutica. How are you, my friend? I am doing good. I’m live with my new setup and ready to podcast. Looking fresh, sounding good. You also gave me a sneak peek of some new kicks. You have on some OBI purple Nikes. Were they what I do? Can? I’ll show the audience. I just got him something. Very proud of these custom shoes. Buddy. Buddy, I think you and I agreed to a home and home. I called her a Jersey swap. We’re gonna swap out some shoes. So study, study, conversations, pretty pre podcast. Uh, I now get another pair of shoes. So this is this is already a good day. This is good. I Uh Yeah, you’ve inspired me. I need some Lima one kicks. Also find an excuse to get some real estate of things kicks. I had to get I had to do some reorganization around my shoes because a month or so ago I was in the bath, like at the at the sink in the bathroom. My wife walked into the closet and I heard my grumbling and she comes out she’s like if too many shoes. We have shoes on top. We have shoes in the shoe thing where they should be, shoes on the floor, so I can’t walk in the closet. Shoes everywhere, and I was like, yeah, it’s one of those times where I know I am absolutely in the wrong shoes everywhere. I need to figure out a little reorganization. I have. I think it’s a healthy shoe habit makes me happy. I like them, Um, but other people, other people with scoff at him like you’re missing out, you’re missing out with you. The thing I took from that is that you’re like, I realized this was the time I was wrong. I’ve been married not a long time and I’ve realized that it’s better to just always be the one who’s wrong with my wife. It just keeps her happier, keeps our relationship going. So anytime she says stuff, I just I just just like at work as a leader, I just take full responsibility for it and ask her what she wants me to do to better my behavior for, you know, my next review. You know, it’s like it’s it’s just easier that way. You’re you’re a better person than me and this is a very I’m coachable. She’s like I’m coachable. You know, it’s an important thing. I’m coachable too, but I uh, there’s a part of me that loves the chaos, loves poking the bear Um and a self destructive theme, which we could. We could do that Nycotherapy, between you and me. But so I guess to keep the PODCAST, to keep coming on here. We won’t, we won’t go down that rabbit hole. But you yes, we have, we have some shoes to swap and that’s what I am, I’m most excited about right now. But we have to get I have to get focused lasers in. So you’re the resident insurance guru, the Oracle of sales, marketing insurance at Obie. Um, tell me, tell me a little bit, just high level, you know, thirty seconds a minute, like. Tell me about OBI. Absolutely. So, OBI OBI was built on Um. There’s two founders, brothers, Aaron and Ryan lessiser, and myself as kind of the third brother. I like to I like to pretend that I’m their third brother. Keeps them me on their good side. Right UH. Obie was built around our love for for real estate and realizing that it was kind of underserved as it relates to insurance. People in the space. Need things faster, they need more accuracy, they need, of course, everybody wants better pricing, you know, just you know, that’s everything that people want and they wanted to have a product that was actually built for them and where, historically an insurance Um, most carriers take a homeowner’s policy and they try to like turn it into a rental product and it just doesn’t fit all the things. Or,…
…you know, the average investor who is renovating, who has vacant properties, who maybe has tenants, maybe doesn’t have tenants, maybe airbnbs, maybe fix and flips. You know, all these different things are happening. They have like this very vanilla policy that none of those things really fit into, but they’re gonna give it to you anyway. So, Um, I loved insure tech, my background. I own a state farm, I built an Insurance Company for Century Twenty One, the Real Estate Company, and I got to kind of combine my love for the tech and real estate and my background insurance with OBI suit. We, uh, we have three facets to end. We have an instant product. So anywhere in the country, one to four units that you need a landlord policy, which might be the term that a lot of people know, you can go on our site and you can get that within minutes, uh, and you can do it without even, you know, speaking into individual we have a middle market that kind of handles that five, seventy five units and we can even help you with your seventy five units and up in the more traditional multifamily capacity. I love the Big Tent Al Right, like like I’ll at Lema one. It’s a similar concept and it served us well and it’s clearly served you in the team that Obi well and that you know there’s there’s something to be set specialization, but if you can scale across all those strats. You know, for us we started as a rehab lender, then we launched rental, then we went into which was just one to four unit, then we did multi family, then we lay it on new construction and we’re doing like long term multi family and UH, some multi family new constructions like that big tent is uh, that’s super helpful, especially in a market like today. Al Right, like product changes, the demand changes, like rental Rehab, those Um balances are very different today than they were for us at the beginning of the year when we were originating, and I imagine of a similar shift for you at the O B side on the insurance but keeping on the market shift side, values have been skyrocketing. Now there’s some cooling off happening, whether it’s just the appreciation rates dropping down or values even coming down in some markets, home sitting for longer, which applies more pressure there. How how do you navigate that in the insurance world right, because how often are people actually getting revised policies? You know, the cost to build something, the replacement costs today for a property in general is very different from the replacement costs eight four months ago. It’s like, how do you navigate dynamic market values in your world? Yeah, that’s it makes a great question. Um, I feel like the last two years I’ve been faster than the last twenty. You know from what I call the Ronny Rhona Times too. You know beyond everything has gone really quick. We’ve had such great times. We’ve even like you look at the stock market, we’ve had the pumps, the rallies, the everyone thought it’s going rock bottom. Now it’s. You know, we’ve had a lot happen in just a couple of years and that’s no different for real estate or insurance related to real estate. What I will say is our carriers, you know, our capacity, you know, is keeping up with that, right. We’re constant. They’re constantly looking at replacement costs, which is the you know, for the viewers who aren’t familiar with that term. Potentially that’s your building covered. That’s the amount your place burns down, that’s what you’re gonna get the check for a rebuild, right, that amount. They’re constantly equating for that. No different than Um. Maybe a program that you’re you know, viewers might have hurt of like an exactimate or things like that, where you’re estimating the cost to build, uh, where they equate for the cost of lumber, they equate for, you know, the cost of contractors and just in general.
They’re constantly adjusting that. So I don’t have my clients worry as much um on that piece because we’ll handle that. Right. We have our our carriers look everything over. WE’RE ADJUSTING FOR INFLATION, we’re adjusting for, you know, those different costs. What I really will preaches have have someone you trust, have a part of your team, be an insurance broker, right, or, you know, insurance partner, right. No, that different than a having a broker. That’s on your team or a property managers that’s on your team, or a contractor’s part of your team, because you know really what you need to focus on when you’re purchasing assets, regardless of the size, regardless of fits in a boom market or a bus market, high low, whatever is your team and your team will do their job to keep you in the right spots so you can say, Hey, matt, I’m buying a new one. I know the market is tough right now. I really gotta Watch my n O, I really gotta Watch my figures here. I estimated for this where you at? You know where is it going to come in. You know what should I be looking at, because you can’t really predict even thirty days ahead, which we just talked about. But if you have someone who’s in it all day, every day, I can have the conversation with you today on exactly where we’re at and I can guide you before or after you purchase that asset. So, uh what really? I’ll answer the question. You know, and finalists, have someone on your team, not just an insurance person put across the board, who is up and working and constantly changing themselves with the changes in the market or the environment or whatever, what’s going on, and you will come out in a good spot. You know, rely on the professionals to help you. You know, one thing you have to realize, and I did as an entrepreneur and as an owner of the company, like, if there’s a hundred things that need to happen on a property or at your company, you’re probably good at five or ten of those, like or the best at five or ten. There’s people who are good at the other nineties. Find them and trust them, and I think that’s who I see this not being a problem for those who, you know, buy a property now and expect the same, you know, rates on insurance, or they expect the same price per square footage or cost of La Number, and that’s what they’re bidding on. Those are the ones that get in trouble and usually don’t come back in a good spot for their investors or themselves, um, because they’re really relying on, you know, either predated information or, you know, Um things that they did two years ago. Yeah, Jack of all trades, master of non UH type, fearing they’re right. Like you, that’s so critical and as I’m just thinking of so many parallels between what you’re saying and the growth of the company. Oh, my end at Lima one like as we’ve kind of have grown out these different products straps. You bring in people from the outside who are who are specialists in this, uh, know this, and then that knowledge get spread around. It’s like, yeah, you have this, I’m gonna own everything, I’m gonna Control everything. Mindsets like you’re not gonna be good at everything. You would be great at everything. You’RE gonna be the master and everything. There are people out there who spitialize in these things. Uh. And insurance is a great it’s one that, uh, I can get pushed to the side sometimes. But like, insurance is you know, you have let’s take a rehab deal. All right, you have you have the purchase price, you have the asset there. What are you buying it for? You have the budget. What are you gonna do to it? But if a hurricane comes through, or if fire happens or if somebody breaks into it mid project, like, yeah, you don’t. That the whole theory about insurance, right, or the saying of you don’t care about it until you need it or don’t think about it until you need it. And Yeah, it’s critically important and and for that reason it takes up a good chunk of our of our underwriting guidelines. There a few pages of requirements, but you know, you’re keeping on the big tent piece. What are some of the key differences in you know, a lot of investors we work with go they’ll start out with wonderful unit properties, whether that’s rehabbing or rental. Uh.
They’ll start in the s Fr space, right, and then some folks just expand in that world. Others will move into the multi family space, that five plus unit property, really getting into the apartment complex I’m project. And what are some of the key differences, UH, in the insurance world that somebody should be aware of, an operator should be aware of, when they’re moving from that SFR world into the commercial multi family world. Yeah, I think, Um, it’s a big it’s a big difference. Right. Um, I think when you’re in the less than five units uh, and I’m speaking in general, you know. So, if you have one listener who’s probably yelling at me for saying this, but that’s not me, right, you know, but when you’re looking at something less than five units, the cost of insurance is for that individual asset might be. You could say it’s it’s a lot, but it’s a it’s a there’s not a lot of like skin on the on the bone, right, all not a lot of meat on the bone or whatever in that space. So what I always tell people to do is make up for you know, time is money, right, or other things is you know, look at your insurance from how do I add some time back or some value back with my insurance? You know, if I have ten or fifteen of these properties, maybe getting them on a schedule, right, so I have one effective date. I have to think about insurance one time a year. Um, I have, you know, a set bill monthly or annually, Um. So I can’t reduce a ton of premium maybe. Or if I do, maybe it’s a hundred bucks, right, like most of these premiums are a thousand dollars, two thousand dollars or not a lot there, right. So what can I also do for my property that gives me time back that I’M NOT WASTING ON INSURANCE? Right? It’s not just a money waste right in some people’s mind. It’s it’s a time thing too, so that I can put n o I into or I can I can increase my value of my property. Um. So that’s how I really handle that spaces, you know. So we concentrate at Obie on giving a like an instant product right where you if you’re working on your deal, you can do it at ten o’clock at night by yourself right in that space. Or if you have what a lot of people call their tape right like their excel sheet, of all there they’re probably they can descend that to us and within twenty four hours we’ll have you a whole scheduled quote. That saves a lot of time, you know. Now hopefully we add some value and reduce costs a little bit, but overall we’re really concentrated in there on helping you organize uh speed of transactions and really reducing the amount of time you have to spend on insurance. Um, when it gets into the bigger items, it’s a whole different ball game, right because it’s it’s it’s bigger UH TICKET PRICING ON INSURANCE. So we are going to talk a little bit more about what we want to do with deductibles, or we are going to be a little bit more pushback on the on the lender, you know, or the requirements right on. You know, is this needed is not like is this really the building value that needed? Are these? Do we really need this much in rental income? You know. So we’re gonna attack things a little bit more because the pricing really does affect things there. And it’s a time process anyways. You know, a large multi family deal, I mean I used to say it’s like sixty days, you know, once you go under contract. Now it’s like six months. But you know, there’s already taking the time. So you might as will concentrate on things like getting the price in the best position, uh, and getting your coverage in the best position and really, you know, working on that. And so those are kind of just the two different philosophies. And then what a lot of people is helpful. For a lot of people, I would say, is make business decisions. As it comes to insurance, insurance is annoying and it’s like you talked, you only need it when, uh, something happens. You know, most people don’t look at insurance over a five year or seven year Um, you know out you know, outlook like they do the rid like they’re gonna buy this location and they’re like, Hey, I’m gonna keep this for five years. They think about everything but the only thing about…
…insurance like crossing the finish line, like getting close, like what is my going to rate be today? What deductible do I want today to either that sounds good today or will help me with my pricing. What they’re not looking at is to say, Hey, probably gonna hold on this asset for five years. I’m probably gonna have a loss at one point. Right. So where I gotta basically hand over a check of thousand whatever that deductible is, right. Do Am I equating for that in my numbers? Have to do that deductible? What amount can I do? And is that worth saving an extra hundred dollars a year on my insurance each year? So I have it for five years, hundred dollars a year savings. That’s five hundred bucks, but I did a ten K deductible instead of five k deductible. That is you just lost for your investors, right, or yourself? Right? You want to make more business decisions and less like price tag get me at across the closed line decisions. That is such a good point. It is uh yeah, I feel like in this space it is very much a check the box mentality instead of, like you said, taking a minute and it it’s not. It’s not a bunch of difficult calculus to run. It’s some pretty simple math and risk calculation and just seeing what your tolerance is and how that fits with your numbers. But yeah, that’s a very good point, is that insurance is generally a check the box thing and it’s not thought about as part of the broader business plan. And Yeah, especially as you get into larger policies for larger properties, it’s different when you know you have a thousand dollars deductible for your primary residents versus a much larger deductible for a two D and fifty unit multi family. And, like you said, you you know that over a certain time horizon you are going to have a high likelihood of having Um some occurrence that you have to tap that insurance policy and if you it’s just if you haven’t put any thought to it until that point, it’s a big blind spot for you. It’s really absolutely you know, you really want to think through it because of course you know it’s it’s Ding if I do ding, if I don’t uh in the space like everybody wants, you know, Oh bi, Matt Sutica, to get them the lowest price they can on their insurance, right, like that’s all anybody wants to talk about until the deductibile comes, until the loss comes, uh, until you know rex come, until you know all these other things. And so we do try to as much as people will talk to me. Right. Sometimes they just hey, match, just get it done right, like, and I respect that. But we do try to put things in place. So one thing we actually put in place is we do a two or three week after a closed phone call where it’s not too late to make adjustments where, because people are so fixated on that finish line, especially in the larger multi family, which is fine. I would be too if I had all this money, you know, arnist money down and I’m crazy and whatever, like heck, yeah, I need to close, right. I’d need the same way. But we tried to do this to three week all afterwards, and that’s what we also hit again. It’s just like, are you aware of what your deductibles are, are what that cost would be to you? Are you here’s some things that you can do to reduce those. Here’s what your coverages are, here’s what you’re paying. Again, right, like you know, because a lot of times it’s just like it’s the lender. Good with it? Is it gonna cut my proceeds? Okay, let’s let’s let’s roll. And so, you know, we do do a lot of things here to really Um help and I think it’s because, I mentioned at the very beginning, we were born in the idea of loving real estate and we dreamed the insurance process and our products around that, and so we understand how we would be if we were going through buying and actually our our CEO and founder, that’s what he used to do. He used to syndicate large multifamily in Miami area for years. So he really gets it, Um, and so we not only have products that kind of go that way, but we also work on procedures to help the mindset of the investor and how they’re gonna erect and…
…try to hit them at the right times to help counter some of these things. So you’re not alone in this. You know, insurance decision. Yeah, that that philosophy translates really well over to the real estate investor world. Instead of an insurance company that’s just built to be an insurance company. Right, you’re you’re you’re a real estate investor yourself, right, that’s correct. If I can call myself that. I am. I am a Newbie. Um, I’ve done a very few. Uh, don’t laugh. I am on my third single family that I’ve owned. Uh, I actually own them with my wife and a good friend and and also at OB employee nick. We buy them in Florida right now. We’ve had some good success of buying them, renting them and then selling them. We’re in an area that’s that’s like up community called the villages in Florida, Um, and they’re building out there like crazy and they wed this kind of I’ll call it like loophole, or this just business, uh decision, whatever you wanna call it. But we found that they build these little areas and they it’s the same style home, right, so they’ll if it’s a, I don’t know, a peacock home. You know, that’s a terrible name. I don’t think they’re called peacock, but the peacock model, right, and it’s going for three hundred. When they build the next series, you know, two months later they sell it for they listed for three thirty. So if you bought this one, they almost basically give you that built that appreciation like right away. They almost do so we’ve kind of found some success in that, like, you know, a little bit of buying, renting it out for a year to fifteen months and then, you know, taking advantage of some of the the appreciation up there. Um. And then I also have been an LP. Um, I would love to do more GP. I think raising money sounds kind of fun and stressful and all those things. But overall, just of real estate, I got into a lot of the real estate for the depreciation. Um, that was I forget how many wonders of the world we’re up to. I don’t know if it’s seven or eight or nine at this point. You know, I think you’ve got like the Kardashians in there as one of them. But uh, you know, that depreciation, it was like like that blew my mind. So that’s why I’m in it. On the on the big stuff is I love the depreciation. Uh. My Accountant UH is thrilled because I’m not maddenor anymore about my tax bill and things like that. Uh. So. So, yeah, I’m an investor. Um, I am. I think I would consider myself just super passionate about real estate and insurance in the combination. But Um, but yeah, I hope I’m a big investor. One day, I hope, I hope next time I do a podcast with you I can say like, definitely, yeah, I’m I’m a big investor. Yeah, you don’t. Don’t downplay yourself at all. I’ve I’ve been seven years. I started in space. I’ve right after I graduated college and I’ve I’ve done a total of zero real estate deals myself. I started buying primary residents. Um, so I’m you have more experience as a real estate investor than I do. I guess that makes me kind of the equivalent of an academic over here. It’s like you do, you just do right, you do, for better or worse, for better or worse. All right, what I’ll wait you. You’RE gonna get off this podcast and Google the villages and then call me. I know what his friendliest hometown I know. I know the La there. You go there. Okay, you know what I remember? I remember the commercials when I was a kid. Yeah, yeah, yeah, yeah, it’s it’s near dear. My parents are there. We, we, we, we love it. There’s a bunch of I won’t mention it on the PODCAST. I know there’s all the stigmas and the different things like that, but overall it’s a it’s a great place and where I have some fun with the real estate there.
Beautiful, beautiful. I I have to ask you the most important question of the podcast because I’m terrible. I don’t want to forget. I have my pen here. What’s your what’s your shoe size? I am a ten and a half, than a half. Yes, all right, Matt Sunica. I gotta get to Nike’s website and whip up some Lema one kicks so we can do our swap for folks who want to learn more about ob take another look if they’re not happy with their current insurance provider or if they got a new deal coming up and they wanna uh see what y’all is offering. Is What’s the best way for them to do that? Yeah, two ways. Uh Obi, risk dot com. You know, you can see the spelling here in my my shirt hair. Uh. Then risk, you know our I SK DOT COM. You can go there and you that’s where you go for your single families, your wonder four units and uh, if you’re wanting to get involved with the anything larger than that, uh, grab me on Linkedin, grab me on, you know, on Facebook, or you can go to the same website and just backslash private dash client and that will get you into the larger multifamily and larger assets. But Um, if you can get ahold of me, you can get ahold of Obie, I always say. And Uh, there’s not many Matt Suticas out there, so I’m usually pretty easy to find. Yeah, you, you looked out on that and the being of the sales and an easy but unique name. That’s UH W I. I agree. Thank you. Great, great, great grandfather. Whoever got that name? I haven’t done my aunt stress Tree Dot Com. UH, yeah, but the commercial is always kind of interesting to me. But so maybe one day I’ll know who to thank for that. You, you should. I had to get over. I got it as a Christmas gift. My mother in law got all of us, Um one of the kids, or it got each of us, one of the kids, and I had hesitancy because, as I had watched, it was either one Bill Maher episode or John Oliver Episode. There’s something about the you know, the rights to your data, your your DNA data, and at the end of the day I was like, look at like China, facebook, everybody already knows everything about me and has all the data, so I’m just gonna go into it. But, all that said, I did it and it’s pretty cool. They’re a really good app to where you can kind of trace timeline of lineage Um. So it’s yeah, I would recommend it. Go Go see who you can thank for that last name and uh yeah, I I used some kicks and Matt, Wonderful Conversation. I can’t thank you enough for carbon some time to sit down and chat with me. Yes, thanks for thanks for having me and I really enjoyed being Um. Sure, thank you again and thanks to everybody for listening to take care. Are you a real estate investor looking for the right lender that can finance all your deals and help you scale? Lima one capital has the best suite of loan products in the industry bar none. Whether that’s fix and flips, fix and holds, building new construction or buying rental properties. They have incredible financing solutions for it all. A reliable, common sense lender is one of the most important parts of your investment team, and that’s exactly what you get with Lima one. Let Lima one capital show you how they’ve helped thousands of real estate investor scale and increase their wealth. CHECK OUT LIMA ONE DOT COM or call eight hundred to five, nine zero, five nine five to speak with the consultant and preparation for your next project. Thank you for joining us today on the real estate of things podcast. Subscribe and tune in weekly for new content from the industry’s best while we continue to unpack the nuances of this dynamic market. Follow US across social media for additional insights and analysis on the topics covered in each episode, and remember to rate, review and share the show.