Michigan Real Estate Blog

One of the least considered, but perhaps most important aspects of successful real estate investment is insurance against losses. Even though the market for residential real estate has begun to cool, commercial real estate investment opportunities abound. Commercial properties have additional risks that need to be mitigated and in today’s litigious society, it is important for investors to take the steps necessary to protect themselves and their investments.

As the housing market begins to cool off, the investment risk of real estate has increased somewhat. Residential and commercial real estate investors can no longer rely on a continually increasing market to bail them out of mediocre or bad purchases. The only real insurance you have here is to study investment analysis further and to really check your market before committing funds to a transaction.

There are other risks in commercial real estate that you can mitigate through third party insurance policies. The most common form is title insurance. Most real estate professionals recommend that buyers obtain title insurance on any property they purchase and if a loan is involved, the lender will make it a condition of obtaining the loan. The purpose of title insurance is to protect the buyer in the event that problems are found with the title after the close. Even though all sales of real estate include a title search, it is a good idea for the buyer to purchase separate title insurance as an extra measure of protection against mistakes in the search. This extra insurance will help protect the buyer in the event of any undiscovered liens, disputes over property lines, or other matters affecting title.

Another common, but important form of insurance for investment property is liability insurance. This provides the investor protection from liability in the event an individual is injured while on the property. It is all too common for individual property owners to be sued for seemingly frivolous reasons, so it is vital for all property owners to carry a sufficient amount of liability insurance to protect themselves and their personal assets. It may also help to have your insurance professional “walk” the property with you to point out potential hazards before they become law suits.

Hazard insurance provides protection in the event of damage from fire, accidents, theft, and vandalism. Depending upon where you live, you might want to look into adding protection from storms and natural disasters. All owners of real estate should have this insurance and again, if a loan is involved, the lender will require you to purchase it and name them as an additional insured.

Environmental insurance is a new form of risk management that is gaining in popularity with lenders. Instead of performing Phase 1 and Phase 2 environmental studies, more lenders are opting for insurance against this type of loss. Because lender liability is limited in current law, the focus is on paying the outstanding loan balance or the cost of clean up, whichever is less. A word of caution here: Make the lender get the insurance (you’ll still have to pay for it) … it’s not your job to understand the intricacies of environmental pollution and its risks.

In addition to these basic forms of real estate insurance there are other types of coverage that you may wish to consider. For instance, those properties located in or near flood zones may wish to purchase flood insurance, while those in earthquake prone regions may want to consider the purchase of additional earthquake insurance. And in the wake of 9/11, there is even the opportunity to purchase terrorism insurance!

In the final analysis, each real estate investor has to look at his or her own level of risk tolerance and what might actually affect the real estate investment. From there, with the help of an experienced commercial hazard insurance broker, you can then purchase the right mix of insurance needed to adequately address and mitigate those risks.

Homeowners’ insurance is a must for any owner of residential real estate. It has been around for many years, coming to the rescue of many real estate homeowners. Leaky pipes and their subsequent damage have been causing homeowners grief for an even longer time. Homeowners’ insurance has alleviated such problems by underwriting the cost for repairs.
I remember as a child my father making repairs with money from our homeowner’s insurance policy. He told me that there was never a claim too small, unless it was within the deductible range.
While my father’s information was correct for the times, the rules for small claims on residential real estate have changed. Submitting a small claim today, especially for water damage, could cost you multitudes more in the future.
A California Insurance Department study showed that 25 percent of insurance companies refused to renew policies for residential real estate owners, who made one or two non-water damage claims within the past three years. The figure rose to 32 percent, when the claims were water damage-related. This means the insurers are paying the legitimate claims but are apt to drop those real estate customers at policy renewal time.
Additionally, all insurers share claims information through the Comprehensive Loss Underwriting Exchange (CLUE) database. Not only are you apt to be dropped by your current residential real estate insurer, but others may not approve you. The study also showed that 62 percent of the top 13 insurers in the state of California refused applicants with only one-to-two claims in the past three years.
If another insurer does approve you, it will most definitely be at a much higher premium rate that will add up over the years to a much larger amount than the small water damage claim you made.
So, what has changed?
Toxic Mold
Litigators have jumped on the toxic mold lawsuit bandwagon. Toxic mold comes from water damage repairs that were incorrectly made or only partially cleaned up. It can literally make the real estate residents very ill. Some toxic mold is created by homes that were not quality built and allowed water to seep in between the outer and inside walls. There have been a few multimillion-dollar homes in California that had to be totally leveled due to toxic mold.
Insurance companies generally are expected to pick up the tab and then sue the repair contractor or original builder for reimbursement. This attitude has caused a lot of litigation – between insurers and residential real estate owners, as well as between insurers and parties assumed to be responsible for the toxic mold. They often lose court cases for reimbursement, as well as incurring attorney fees and court costs. Is it any wonder insurance companies have become gun-shy of small water damage claims that could lead to costly repairs and litigation later.
Administrative Costs
Another reason for the change in attitude toward water damage claims is the change in real estate insurers’ business practices. Since the early 90s, real estate insurers have looked for more practical ways to increase profits. Through studies, they found that small claims created the same large administrative costs as the larger claims, even though the payouts were small. They now weed out residential real estate customers who make small claims.
Alternative Game Plan for Real Estate Homeowners
Today, it is better not to make small damage claims of any type. Real estate homeowners should increase their deductibles to $1,000 or $2,500. This reduces their premium costs by as much as 30 percent. They are covered for large damages but not paying for services (small claims) that they are not receiving.
With the larger deductible, the premium savings can be placed into a savings account to pay for small claims that would earlier have been submitted to the insurer. Whenever used, the money should be replaced as soon as possible.
After seven-to-ten years of submitting no claims, most real estate insurers will qualify you for a claims-free discount, saving you even more money.
Is It Worth It?
In deciding if you should submit a claim (even a larger one), first determine if it is worth the possibility of losing your policy and/or paying higher rates. Add up all the repair costs. Determine how much the real estate insurer will pay, based on your policy. Subtract your deductible. Is the remainder only a couple hundred dollars or substantially more? Now, determine if it is worth it. Remember, even moving to another state will not escape the CLUE database.

Now that you’re a bit more familiar with the dynamics of investing in fixer uppers, you are probably itching to make your dreams a reality. Well, Congratulations on getting closer to your goals. In this brief article, we will provide you with not one but 5 real estate tips to succeeding at fixer uppers that you can use right now to skyrocket your fixer upper profits. Are you ready? Well, let’s get started.First of all, you must have a realistic goals and a written plan to succeed with fixer uppers. By having set goals and a written plan, you will be better able to achieve your success. For instance, it isn’t just enough to say that you want to own some fixer upper properties within 5 years, you must be more specific. For instance, you have to say, “I want to purchase 5 fixer upper houses in the next five year by working a part time gardening business and reinvesting all of my profits into my real estate venture. I will purchase my first fixer upper property within 1 year and 4 more properties each year thereafter.”Second, you must put in the necessary education. Although investing in fixer uppers sn’t exactly difficult, it does take a bit of knowledge about finances, real estate properties, current market conditions, real estate selling and closing prices, etc. In addition, you must be familiar with the various different types of fixer upper properties you can own as well as financing options. Third, you have to stay focused on your goals. Yes, you will experience some temporary setbacks while investing in fixer uppers and you will have to put forth a bit of effort to make your real estate dream come true but you can do it if you stay focused on your future, use proven tips from other fixer upper experts and execute your plan. Once you do this, you will succeed in your fixer upper investment efforts. Fourth, you have to find the fixer upper investing approach that works for you and be persistent with that particular method. For instance, if you’re an expert rehabber then you might find that you enjoy purchasing fixer upper properties that need a bit of work and then flipping then. However, if your goal is to secure monthly income from your fixer upper properties then purchasing a small apartment or house in need of repair, fixing it and then renting out, might be your better option. Fifth, surround yourself with positive people and develop a fixer upper investing team. This way, you’ll be able to capitalize on everyone′s strengths to maximize your profits. For instance, you’ll need a fixer upper renovation team, mortgage or bank broker, real estate agent, etc.In conclusion, investing in fixer uppers can be extremely fun and exciting. However, if you truly want to be a successful fixer upper investor, you must have an individualized plan, set and stay focused on your goals, find and implement a real estate investment approach that works for you and secure a good team. Once you do this, you will become a successful fixer upper investor and can make your real estate dreams come true. Good luck!

These specialists offer all kinds of services, so you can buy property through them, get impartial professional real estate advice and access the expertise of best Thai lawyers whom will advice on which way to buy either leasehold or freehold. These specialists also prepare all Thai documentation with English translations through to establishing a Thai company, tax issues, due diligence checking land titles through to title hand over and final payment.
You may also aspire to attain a Thai Visa, a work permit, and facilitate accounting, or other business services such as business licenses for restaurant, alcohol etc. The services of these specialists are highly competitively priced and provided in an effective and timely manner and can be ordered through their web site and paid for by credit card or by cheque or cash at their office.
Real estate in Thailand is cushioned by a professional network of agents, although you will find a limited number of the sophisticated developers that typify the property market in Phuket or Samui. They are quite interested in targeting foreigners and are experienced with both condo and house sales, offering Thailand property that ranges from single 45m2 studio condos in renowned ‘farang friendly′ buildings for under a million baht to superb value-for-money mansions on a rai or more for 10 million.
If you are looking for brokerage in Thailand, you must investigate enough before settling on a broker. Having good work ethics within the real estate broker group will ultimately be an advantage. All brokers in Bangkok handle the whole of Bangkok, not a particular area, so these brokers are all treading on each other’s feet. However, with such a vast area to cover, there are undoubtedly, thousands of properties for sale or rent. The brokers here have co-brokered successfully with a small number of their competing estate agents, so they can confidently ask for their help if they do not have the particular property that their customer is looking for.
Buying a property in Thailand is, unlike most other things, very easy. The actual transfer of title deed consumes just a few hours. The title deed itself will reveal if there is any mortgage or other loan on the property, as details of these must be written into the deed. Hence, it is not tedious to check the owner’s right to sell. Most people do not even access the services of a solicitor, even though it does not cost much in Thailand, and so you might as well so that your mind will not disturb you. In fact, you could visit a condo that you like on Monday morning, and own it once the business is completed, the same day. So, Thailand could be an ideal choice if you are looking to own real estate property in Asia.

There are many people who may not be certain if they should look at apartments online or offline. There are advantages to both, but you will certainly be interested in why you should look for apartment’s offline as well as online.

Did you know that many people may think that looking online is the best way to find your apartment? This may be true, but you will want to be certain that you actually visit the apartment prior to making a definite decision.

When you search for apartment offline and make a conscious effort to go visit them you are certain to be able to get the best idea if you wish to rent them or not. This means that you want to consider all that each one has to offer prior to signing the lease.

Did you know that there are a lot of people that want to rent a cheap apartment and never really take the time to look at them in person and this is a major mistake. If you want to be certain you aren’t in for a major surprise, you will really want to take the time to check out the apartment prior to renting that is for certain.

Take the time to not only look at the apartment, but to spend time looking around. If you want to be certain you make the wisest possible decisions you will make the effort not to simply rent the first one you look at but will want to invest time into making absolutely certain it is the one you would like to rent for a very long time.

There are real estate investing “tricks″ and techniques that you may experience, or want to know. On That Point are new paths of doing matters that are valued learning. Knowing nearly the latest types of funding is different way can also help. Earlier all of these, nevertheless, you involve to learn great basic principles. Present are six of them.

1. Project the numbers.
3. 4. Be prepared.
5. Set goals.
6. Learn, and apply what you learn.

Real Estate Empowering Principles

1. Real estate investing is about relationships. Individuals are your most precious resource, and the more of them you experience, the more likely you are to find good places to buy, or purchasers for your holdings. Recognize the right individuals too, letting in a real estate agent who gets many listings of the type you are concerned in.

2. Know and understand the relevant figures. When you see at a rental property, for example, you should be considering about the income, the disbursements, and the capitalization rate, or “cap rate.” Think how positive changes would provide you to produce the income, and what that would do to the rate.

3. Search for and use methods to reduce risk. Have review, funding, and other contingence clauses in the offer, so you’ll get your deposition back when a deal falls through. Think your exit strategy before you buy, and have a “plan B.” Value real estate using comparables or cap rates, not “hunches.” Buy through your corporation or LLC.

Have business cards, pen and paper on you at all times. Sometimes, when you mention that you invest in real estate, sellers, buyers and other investors suddenly appear with selective information, opinions, and sometimes even good deals.

5. Create action-oriented goals, not just wishes. For example, require yourself to look at a certain number of properties per week, and maybe even to write a certain number of offers each month. Set goals for all sorts of little steps, like making six phone calls per week, checking online listings twice per week, and so on. Repeated action creates habits, and good habits lead to more successful real estate investing.

6. Keep getting developed, and using that education. Learning more from books, magazines and even tapes or CDs is a great idea, as long as you spend as much time doing something as reading about it. Some of us let the interest and enjoyment of reading about investing get in the way of actually empowering. Good selective information is crucial, but it should lead to good real estate investing.

If you think you′re missing out on the stimulus package for homebuyers, think again. The homebuyer tax credit is back and offers newly improved guidelines that are quite beneficial not only for first-time homebuyers but for those with current residences as well. This is a wonderful time to purchase a property. And if you′re planning to purchase Coral Gables real estate home, here are some things you need to know. 

Deadline 

The new deadline for the tax credit is April 30, 2010. This means more time for you to close on the Coral Gables real estatehome you’re planning to buy. You must have your purchase in escrow before the end of April the 30th. If you managed to do that, you must secure the closing 60 days after that date. Since closing can be delayed for much longer, have everything settled while waiting for that day to come. 

Credit Amount 

If you’re a first-time homebuyer, you’re entitled for up to $8,000 credit. On the other hand, if you’re a repeat homeowner planning to purchase a Coral Gables real estate property, for instance, the tax credit for your group is around $6,500. 

Things you need to do: 

Hire professionals 

In order to take advantage of the tax credit, you should get advice from the professionals. Hire the right people that can help you with the process of acquiring the credit. For instance, the tax preparer will be tremendously helpful in ensuring that you’ll meet the necessary requirements for the credit. The lender is also important for financing and in helping you choose the best financial option and mortgage program that will suit your needs. Don’t forget the real estate agent as well. Since the deadline is closer than you think, it becomes more and more crucial to find the right property in the shortest period of time in order to give more time for closing. 

Look out for fraud 

The popularity of the tax credit has unfortunately bred some dangerous tax fraud. In order to avoid these fraudulent operations, you must take time to learn the process of applying for the tax credit and everything that it involves. 

Once you’re planning to apply for a tax credit to purchase the Coral Gables real estate property you want, be wary of any suspicious advice. Anything that tells you to conceal information or do this and do that, which tends to make everything complicated, should be duly avoided. Lastly, all the paperwork involved in the process should be kept safely and handy for immediate reference. 

Mark Michael Ferrer 
Coral Gables Real Estate

Many people who consider becoming involved in the note business, otherwise known as the cash flow business, have no real understanding of what a note is or that privately held notes even exist. The late night TV commercials have brought the business to the masses. The promise of a great income and a work from home business has attracted many viewers to consider the business.

Some basic education on the subject can help the newbie get started and acquire a better understanding note business and how to get into the business. Several companies offer training to help people get into the note business. The cost of the initial training most of these companies offer is usually very small but be aware there will be several offers for more advanced training and at a much greater cost.

When professionals in the cash flow business refer to a “note″ they are referring to privately held promissory notes. A note is an IOU. It is the right to collect payments based on terms outlined in the promissory note. In most cases a note is secured which means the borrower stands to lose something if they fail to make payments as outlined in the terms of the note. The security can be any form of property including cars, boats, planes, or real estate.

A real estate note, commonly called a mortgage, trust deed or land contract, is simply a note that is secured by a home, vacant land, or other type of real property. Real estate notes are very attractive to buyers for many reasons, with one of the most prominent reasons being the sheer volume real estate notes created every year. Real estate notes are more secure because real property tends to appreciate in value and the location is fixed. Note buyers always know where their security can be found. Many other types of property, cars for example, tend to depreciate and can be easily moved.  Buyers know that should a borrower fail to make payments it would be more realistic for them to recuperate their invested funds by foreclosing on a single family home than on an automobile or airplane.

Many of the people who own notes and collect payments are not aware there is a market for their note. When entering the note business, you will need a good basic understanding of the business in order to answer the questions the note seller will have. Your roll will most likely be the roll of a note finder. You will be the person the note seller talks to first. Being able to answer basic questions is a must.

Try doing some research on the note business, read some books about the business and then maybe try taking one of the basic courses. I strongly recommend testing the business before ordering one of the expensive courses.

Real estate investing probably makes you think of a number of things. You possibly will think of real estate investing as real estate portfolios and real estate retirement plans, or you might focus on short sales, bulk reo investing and virtual real estate investing. You probably also wonder how these things play out in real estate investors life in the current nation.

You will need to know a lot about real estate investing. The greatest way to get the most out of your real estate investing education is to be familiar with a number of basic information ahead of time. Whether you are interested in short sales, bulk reo sales, virtual real estate or just improving your abilities as a real estate investor, you need to know a number of real estate investing basics in order to get that real estate success you’ve always dreamed about.

Here are three real estate investing basics. Some experts don’t even know yet:

1. You will always get a positive yield with real estate investing education. You can create thousands of dollars in possible wealth with each real estate deal. Getting the wealth is the key to your real estate success. Learning about real estate increases your probability of victory when you do a real estate deal. Small investments in education yield lofty results upon implementation.

2. You do not need a lot of money to be a flourishing real estate investor. You can achieve real estate success, investing no matter how much money you have. There are lots of deals that you can use other people′s money to do. Private lenders will allow you consume their money if they know that you are a good investment. The best way to be a good investment is to know as much as promising about real estate investing. This will enable you to show people who have money for real estate investing but may not know how to use it that you arpreeminentgpro investment.

3. The most inportant thing you need to know, do, and have to pull off the real estate success you creave for is this. You must have that real estate success mindset to be able to attract all the positive energy that will help you achieve that real estate success. A lot of real estate millionaires have this wealth secret. They were able to master real well the law of attraction where they have the proper midset to set things straight and achieve the real estate success they want.

What is title insurance and why should any buyer get it when purchasing a home (single family, townhouse, condo, apartment, or whatever format your home purchase takes)? Doesn’t the attorney or settlement company handling the closing see to it that you have a clear title? Isn’t this just another way for someone to siphon a few coins off a real estate transaction?

Title Insurance

Title insurance prevents the property owner from suffering financial loss if, at any time during his ownership of the property, someone comes along who can show that they have full, or partial, ownership of the property instead. Every mortgage lender I’m aware of requires title insurance be purchased to cover the amount of the mortgage. They’re not in business to lose money.

A careful title search is done at the time property changes hands. On rare occasions mistakes are made anyway. Property can change hands in a number of ways including by deed, by will and by court action. Typically, these proceedings are recorded in different places. Searching the history of ownership to be sure nothing has fallen through the cracks is a tedious job that requires alertness, intelligence, and skill. Mistakes can happen. Fortunately they don’t occur very often, but they do happen.

A mistake of this kind happened a few years ago to some elderly friends of mine who owned a 136 acre parcel of farmland in Stafford County, Virginia. It had been the home place, the family farm. The family had 10 children who inherited it on the death of their parents. After they became adults, one child, a daughter, bought out the interests of each of her siblings. At her death, the property was conveyed by will to her three sons. One of her sons had died without a will which resulted in his widow and their 3 children gaining ownership of his one third interest per state law.

My friend is the widow. She and her brothers-in-law wanted to sell the property. The area had begun to develop and each of the three of them had significant health problems, so they decided an influx of cash would be welcome. The property was master planned, but not yet zoned, for multi-family use. Being subject to a rezoning complicated the sale, but the price reflected the change in use. When the title work was done, it was discovered that the heir of one of the 10 children was still shown as a ten percent owner of the property. Neither my friend nor her brothers-in-law had title insurance. If the heir would not sign a “quit claim deed,” they were stuck with an additional owner.

Actually, this happened not once, but twice with the same family group. In one case, the aunt remembered that her parent had been bought out and signed the quit claim deed. In the other case, a cousin either did not know or refused to acknowledge what had happened and ended up getting ten per cent of the proceeds.

My suggestion is that you purchase title insurance because lack of it could prove devastating. You make a down payment. You make monthly payments, an increasing portion of which is reducing the amount of principal owed. It is very likely that the value of your property will go up over the years. As time passes, these elements are likely to result in your home equity’s being your largest asset. Just how devastating would it be if you eventually discovered that someone else owned what you’d always thought was your home?

Do yourself a favor. When you buy a home, buy title insurance.

What if the home you’re purchasing is new? No one else could have owned it before you, right? Well, someone owned the land. As a matter of fact, the builder/developer probably had a construction loan on it, and they’re often released in groups of 10 lots at a time, so it’s possible a bank has an interest in your title. What happens if the bank goes bankrupt and you’re left trying to get a release from a trustee in bankruptcy?

Honestly, I’m not making this stuff up. I’ve seen this kind of thing happen. Do yourself a favor. Buy title insurance.