Michigan Real Estate

Myth 1: Standard policies include coverage against flood.

Fact: All insurance providers do not include any flood coverage into their standard policies. In case you require this type of coverage you can purchase I either as an addition to your current policy or as a separate policy.

Myth 2: The Medical Payment part of the policy will pay for the injuries I and my family have sustained.

Fact: The Medical Payment part of a standard home coverage policy is designed to pay for the injuries any third party suffers at your property. Whether a friend, visitor, neighbor or worker gets injured within your premise the MedPay coverage will pay up to $1,000 per claim. However, nor you not any of your family members will be covered by this type of coverage as your medical policy takes force in such situations.

Myth 3: In case my home is completely destroyed the insurance company will pay for anything I tell them I had in the house.

Fact: In case your house gets destroyed due to different circumstances you insurance company will always ask you to make an inventory of all the items you have had in the house, including specific data like serial numbers, purchase prices and so on. If you cannot provide such information you won’t be reimbursed for the items lost. The best way to assure proper coverage of any lost items, you should make an inventory of all the items you have now with detailed information on every piece of equipment, jewelry, furniture or any other item.

Myth 4: Filing an insurance claim will automatically raise my premium

Fact: It all depends on how frequently you’re filing claims. If you have insurance situations once every few years, your premium might stay at the same level. If you’re filing claims on a regular basis, especially with no substantial reason for doing so, your premium will definitely go up. First of all, think whether you really need the coverage if the damage is minor and try to avoid filing claims too often.

Myth 5: Valuables like jewelry and furs will be paid for if stolen

Fact: Standard homeowners insurance policies have a limit on the amount of coverage used to pay for the stolen valuables like jewelry. Most policies limit this amount to $1,500, so if you feel you need more coverage on this specific type of risk you can purchase additional coverage and include it into your policy.

Myth 6: Flood coverage is useful only if you live in a flood area

Fact: Flood insurance coverage is strongly insisted in special flood zones, especially by mortgage companies that finance the purchase of new homes. However, if you live in a low risk zone it doesn’t mean that you shouldn’t carry flood coverage with your homeowners insurance policy. A damaged water-pipe, heavy showers and even a broken dishwasher can lead to flood damage in your home, which otherwise won’t be covered by yours standard policy.

Myth 7: It is impossible to buy a home without homeowners insurance

Fact: In most cases you can actually purchase a home without having any insurance. However, most mortgage companies include strict requirements on certain types of coverage you have to buy in order to get the necessary financing if you’re purchasing your home using a mortgage loan.

Bringing in money from buying homes and reselling them is an idea that many people have. The main concept here is buying at a low price and then turning around and selling for a higher price. The most commonly used term for this is house flipping. The terminology refers to the flip of the home from buyer to seller and right back to selling again. As such this is hardly a new practice and has been in play for many years.The idea is simple for most people. They see a home that is for sale, usually under duress from foreclosure or tax issues, that has a low price. The reason why the price is well below market is the desire of the seller to get out from under an expense that they do not need. So the misfortune of others can be the fortune of some. A house flipper will then purchase the home, make some minor adjustments and repairs, and then sell the home to a new buyer at an inflated rate.The real trick here is to find the properties that you can flip without a problem. There is a danger that you could buy a home and find out that some serious problem exists necessitating expensive repairs and time consuming issues that could cost you all the profit that you would make. So you have to be sure that you are making every effort in properly researching each and every home that you intend to purchase. To make this easier we have provided some valuable advice below to aid in this process.InspectionsEach and every home that you look to purchase should be inspected by a qualified home inspector or home inspection service. This can get expensive which is the reason why most house flippers will befriend a person in this field and pay them outside of the normal procedures or under the table for the inspections to be performed. This will ensure that you are getting the most information that you can use to determine the price you should pay.Legal DocumentsMost often a person that is involved with house flipping will be buying homes without mortgages attached to them. This is a money saving and time saving effort for the most part. This will mean that you have to get legal documents drawn up for the purchase of every home. Most often you can get a single set and copy them for further use with future transactions. Many states require that such documents bare the signature and seal of a notary as well.Tax ConsiderationsFinally you have to be concerned with the taxes on the homes that you buy. Most house flippers do not like to hold onto homes so long that they would have to pay taxes but it can happen. There are times when you have no choice but to hold the home over due to repairs and such so the taxes will come due. Factor this into your pricing when you are looking to buy.

How would it sound to you if you could purchase a property at a low cost, and then turn around and sell it for a profit? If this sounds like the best idea you’ve heard in a long time, then you may enjoy what is now referred to as “house flipping”. Beware, though, for as good as it sounds, if you aren’t prepared to do it correctly, you can end up with no house and no profits! Let’s take a closer look at this phenomenon known as house flipping.

When purchasing a house to flip, you want to look for the worst looking house, in a good neighborhood, that is serviced by a good school. The purchase price of the house should be low enough that you can make the necessary renovations and still be able to sell it at a money making price. The key factor will be, how much do you want or need to put into this house, and what renovations will yield the biggest paybacks?

A rule of thumb is if your house is over twenty-five years old, then you probably need a complete redo. If your house is under twenty-five years old, then you probably can get away with minor renovations. Some renovations will provide more of a return than others and, in making renovations; you don’t want to price yourself out of a sale. You want to keep the price of your renovated house within a 15-20% range of the neighboring houses. People are willing to pay more money for improvements, but there will be a limit as to what people will spend in comparison to other houses in the area.

Today, bathrooms and kitchens provide the biggest return on your dollar. Kitchen upgrades can be as elaborate as dual sinks, granite countertops, and new cabinets, cooking stations and warming ovens. Keep in mind, the quality of the home. If your home is of moderate value, tile or laminate will do, as well as under cabinet lighting and new cabinet hardware. Improvements to bathrooms can include sunken tubs, glass window blocks and skylights. A moderate priced house will do well with a fresh coat of paint and new flooring. Other areas that will add value are bathroom suites, extra baths and half baths.

Renovations to increase the value of your house do not necessary have to be costly, or involved. Curb appeal can definitely result in a return on your investment. Painting the exterior, landscaping and yard maintenance will draw the buyer to want to see the inside. Some simple fixes on the interior, such as, patching cracks, painting; new lighting, new plumbing and redoing floor covering may be just what you need to make the customer feel drawn to this house. Wood floors are a popular choice today, and would be a good choice over carpeting. Also reduce clutter, to make the house look larger and more inviting. You can also create an extra room, by revamping extra areas. For example, turn a basement into a family room or extra bedroom, or turn a junk room into a den.

There are many things you can do to a house to increase its value and result in a profitable flip. Keep in mind; this is a financially risky investment. Sometimes, you may uncover some hidden damages, which may result in costly repair. By doing most of the work yourself, you can keep your out of pocket expenses down, but realize what you are and are not capable of doing. Remember, the market will play a determining factor in your profit. With all this in mind, happy flipping.

We’ve seen it in Reality TV shows, we’ve heard our friends talking about it, we may have considered it, or even done it ourselves. House flipping can be a fun and lucrative way for amateur investors to get into real estate investing. House flipping refers to the practice of purchasing discount real estate and then quickly selling it, often making huge profits.
There are many reasons that people may sell their homes at discount real estate prices. The house may be in poor condition and require major renovations and repairs, updated plumbing and wiring, flood or fire damage repairs, or have been trashed by renters. One might also be forced to sell one’s home as discount real estate due to relocation, divorce, or a pending foreclosure.
Whatever the reason behind the sale of the home, buying discount real estate can greatly benefit the purchaser whether he is looking for a home to live in or planning to sell it as an investment. There are two main ways that people generally flip houses. One is to purchase discount real estate at a low price and selling high in a rapidly-raising market. This can be a gamble, as market trends can change quickly and the investor may be left with one or several houses that aren’t appreciating in value.
A safer but much more expensive and time intensive way to flip a house is the ‘fix and flip’ method. In this scenario the investor purchases discount real estate very low, usually because of severe damage to the property and cosmetic deterioration, and makes heavy repairs. He or she may hire a professional decorator as well, so not only the structural damage is corrected, but the overall aesthetic is dramatically improved. This significantly increases the market value of the house, and can bring a nice profit.
The fix and flip method is typically a better investment for those who are familiar with home repair and can do much of it themselves, as paying professional repairmen can get costly and cut into the overall profit. Fix and flip can also be physically and emotionally draining, again, because the investors often perform much of the labor, and it takes a lot of time and energy to accomplish home repairs.
Investing in discount real estate has typically been a pretty safe investment, but in areas where there is a high concentration of house flipping there is the possibility of having an adverse effect to the cost of living, causing a housing glut, and eventually a market meltdown. Many economists blame the real estate bubble of 2004 and 2005 to an excess of house flipping.
But usually, a community is grateful for the opportunity to clean up neighborhoods by flipping old decrepit homes, increasing property value. According to the ‘broken windows theory,’ an unkempt house in a neglected area attracts a criminal element, which drives out those making a responsible living, which allows for more criminal element to creep in, and so on in a vicious downward cycle. Investing in discount real estate and flipping homes can help bring new life to deteriorating neighborhoods and improve quality of life for an entire community.

Flipping houses has become a very popular activity in the housing market, this can be very financially rewarding; however, if not done right, it could turn out in catastrophe and cost more on the property than you  make on it.  House flipping is not for everyone, it takes much more work than it may look. Choosing the right house is key; the house isn’t the most important factor, but the area that the house is located in. Find an uncared for home in a nice area, maybe it was a rental that wasn’t properly maintained, an older owner/s who weren’t capable of keeping up with the house, maybe it’s just an out-dated house, or it could be an eye sore, over-grown and “ugly” to look at. All of these things are repairable, but if the house is in a bad neighborhood, whether it be high crime rate, low income, or near a freeway or airport you can not hide or change these undesirable features.

Now that you’ve found the right house, it’s time for inspections; this is a very important step that you do not want to skip. The main areas to focus on would be:

1. the foundation, if you find any cracks make sure to get an estimate on them, this could turn out to be a very expensive repair.

2. The roof, you need to check for water damage and carpenter ants, especially in an older home.

3. Plumbing and electrical, check in and around the kitchen and bathrooms for uneven flooring and water marks, you may also want to check the water pressure by flushing toilets and turning on taps. If these three areas look good then you’re ready to plan your flip. 

There are many ways you can save yourself money, keep in mind painting or replacing kitchen cabinet fronts, rather than replacing the whole unit, If the yard needs work, don’t be afraid to get dirty, doing these tasks yourself can save you a lot of money. The biggest money saver; however, is to keep the job simple, keep the original floor plan as alike as possible, knocking down walls and other like jobs are very time consuming and can become quite costly.

Once you find the right house, now it’s time to set up a budget, making sure to put extra money in a reserve just in case of any unplanned disasters or mishaps. It’s very important to be reasonable when setting up a budget, don’t underestimate costs. 

Keep in mind the most important selling features of a home; see our “Top 10” list which tells the top ten upgrades needed for a successful flip and some tips on how to make it happen.  

Top 10 Focus Points for a Successful Flip

10. Fixtures – By fixtures we mean sinks, faucets, shower heads, toilet paper holders, towel holders, etc… the first choice for most home owners is chrome, or you may want to go a little different and a bit more elegant, maybe try brushed aluminum or antiqued materials.

9. Lighting – This covers the ambience that the lighting you’ve chosen is right and the lighting fixture itself is attractive. Too often a time when shopping for new lighting, people just choose whatever looks nice, but it’s important to keep in mind what room the lighting is for, and the purpose the lighting will serve.

8. Extras – This is product that has been added to the home that is above and beyond the necessary. These extras would include items such as: a Jacuzzi tub, stainless steel appliances, dimmer switches, a garborator, skylight, maybe even a theme wall somewhere, anything that adds extra flare to the home, if your budget allows, I would recommend putting extras in the home, for a small original cost it can make a huge difference on selling day.

7. Finishing’s – You would be surprised as to how many people do notice finishes, such as the baseboard in a house, the casing around doors, and the basic ensuring that closets and doors open and close properly, a lot of times in older homes, after it settles with time, door frames can become crooked making the doors close improperly.

6. Entrance – First impressions are often peoples deciding factors when buying a home, make sure it’s clean, effective, you don’t want too much furniture in the way, keep it simple and open.

5. Bedrooms – Bedrooms are easy rooms to upgrade, they only really require some carpet, paint, and sometimes new light fixtures, etc… if you’re planning on staging the home for a sale, you’ll want to really focus on this area, since they are such simple rooms make sure to furnish them nicely.

4. Flooring – New flooring is mandatory when flipping a home, tile is nice for kitchens, front entrance, bathrooms, and laundry rooms, keep the tiles simple with little or no pattern. Carpet is what you want in bedrooms to keep them cozy and warm, and think of using hardwood or laminate in your living area.

3. Kitchen – As we all know the kitchen is like a hub of our house, we spend much of our time in there, preparing meals, entertaining, and of course cleaning. You want to ensure there are plenty of cupboards, as well as counter space. Make it look new, bright, and spacious. If your budget allows room for those extras, this is where you’ll want to use them.

2. Bathrooms – Some of you may be surprised to see bathrooms ahead of kitchens on our top ten list, but studies have shown that bathrooms can make or break a flip, or a sale of any kind. This is a room where people go to perform many personal tasks and often to unwind in a bath, you need to put lots of proper planning into the bathrooms, and they need to feel inviting and comfortable.

1. Curb Appeal – You may have guessed it, or not but curb appeal has made it to number one on our list, reason for this is that not everyone, but many people won’t even enter a home if it doesn’t look maintained from the outside. You can’t sell a house if you can’t get people into it.

For more Information on this topic visit www.buildwish.com  a free Online Home Renovation & Design Directory for North America, Featuring Free Real Estate Classifieds, Helpful Articles, Contests, Hot Products, Qualified Trades, Forums and Much More!

 

Is flipping houses legal or not? At seminars, I’m often confronted by people who insist “Flipping” is illegal.
What they don’t understand is that the part that’s “illegal” isn’t the transaction, it’s the mortgage fraud that some people commit in order to get the deal funded.
When you Option a house and sell it, the end buyer is responsible for their own financing, no “fudging” on your part, and no possibility of fraud.
The Buyer agrees to pay a certain amount, and has a down payment and credit to match, and knows the deal. The haven’t been misled, and you haven’t helped anyone commit fraud.
Here’s what some people consider “flipping”:
They’ll buy a house, or even just contract it, and then turn around and sell it to an unsuspecting homebuyer or Investor, often from out of town or with no Real estate experience, and usually with no money down or for very little down.
Next, they’ll bribe an appraiser to give a fictitious appraisal, much higher than the true Comparable sales. They’ll work with a mortgage broker who will show the borrower how to submit false documents to the mortgage lender to qualify for a loan they often can’t afford.
Then last but not least, they’ll forge the closing statements from the Title Company to show a down payment and/or closing costs coming from the borrower, in order to get the bank to fund the deal.
Is this what you consider “Flipping”? Bribing appraisers and falsifying loan documents and paperwork? If so, then you’re right, it is illegal.
But when you “Flip” a house by selling it for retail price to a retail buyer, who works with a legitimate appraisaer and Mortgage Broker and gets their own financing, with no “funny stuff,” there’s nothing even slightly illegal or grey about it. It’s simple and easy, with no B.S.
Some people are just simply SOOO lazy that can’t be bothered to buy houses at a discount- instead, they falsely jack up the price, bribe an appraiser to confirm it, and try to pass them off onto an investor or homebuyer who commits mortgage fraud to get them funded. THAT is illegal.
Don’t get me wrong, I don’t have a whole lot of pity for the Buyers in those fraudulent transactions. They are the ones buying houses without enough common sense to even check the value first!
Here’s something else you should learn from this: These supposed “victims” (who all volunteer to commit mortgage fraud and know what they are doing, by the way) buy these properties at grossly inflated values based on appraisals someone else ordered for them. (I know, it’s hard to imagine they were taken advantage of, huh?)
NEVER believe what someone tells you about a property without verifying it for yourself. That means you have to do your Due Diligence- check every assumption- about the property BEFORE you buy it, not after.
While house flipping has gotten a bad reputation in the last few years due to a few bad apples, it is still a great way to get into Real Estate Investing if you know what to watch out for. Done properly, house flipping is legal, moral and ethical, and is a great way to invest in real estate wiothout tenants, rehabs, or risk.

Let’s call him John. A bright and hard worker just trading time for dollars at his regular job. His first house flipping experience could have been a lot better.

John was watching “Property Ladder” on the A&E network one day and got the bright idea to flip a house himself. After all, those people were making money. A complimentary show “Flip This House” confirmed that money could be made, lots of money.

If you haven’t seen Property Ladder, it’s a television show that features first time home flippers. Usually in that show the inexperienced flipper, egged on by Kirsten Kemp, make almost a year’s salary or more by fixing up an old house and selling it. Kirsten Kemp is a veteran of flipping houses and is a bit too pretty to be mistaken for Bob Vila.

John figures that the people featured in these shows are not all that bright and certainly he could do as well. With a bit of nervousness John put a 10% down payment on a home that needed repairs and begin the repair process. Or did he?

The first thing John did was to ponder what really needed to be fixed and if he needed a contractor to do it. Two weeks went by.

After getting several bids, John chose a contractor to come in and totally renovate the property for $11,000. That included paint, carpet, appliances, and a new wall to turn an open area into another bedroom. Once it was agreed, the contactor was to start working. As luck would have it, the contractor had some unfinished jobs and couldn’t start for another two weeks. John was patient, after all it was going to be a great flip and he was going to make money. It was just another $800 for an extra month, no big deal.

Once the contractor started he stared with a bang. Just like on the show “Flip this House” a big yellow dumpster was deposited on the lawn and a crew started ripping out wall paper and junk from the house. That demolition lasted about two days.

The next thing this “go getter” contractor did was to disappear for another two weeks. The excuse: Men had quit and another job was pushing them behind.

To make a long story short, the contract took 8 months to get nearly complete, and then John pulled the plug and fired the contractor.

John paid others to come in a finish what was started. He had now 9 months of house payments into the project, 10% down, and construction costs.

After the house was ready, John listed it with an agent, and it sat another month. John lowered the price a bit with the prompting of the agent, but got cold feet after two weeks and wanted to raise it again. Too late! The house had a full price offer. Good news, sort of.

All said and done John made a little money and got a whole lot of experience. It was a flop, but at least he didn’t lose money.

Let’s review what John, now wiser, could have done differently on his first flip.

Firstly, putting 10% is ok, but not ideal. John should have used private money or have financed the property at 100%. That money could have been used for fix up rather than being tied up in the property.

Second. John waited too long to decide what he was going to do. He should have known before he bought the property what his plan was. This would have saved two weeks at least.

Third. While John got a referral for the contractor, he should have gotten more bids. A deadline for the completion of the job, with penalties, should have been written in the contract.

Fourth. John waited too long to fire the contractor once he knew there was a problem. He was afraid that he would still owe the full amount if he terminated the contractor before the work was done. A proper contract would have prevented that fear.

Sixth. John listed with a realtor too early. The property should have been for sale by owner from day one and John should have tried to market the property himself.

Seventh. The price was set, and then changed too quickly. Better marketing would have netted John with a nicer profit. John should have known the selling price even before buying the property.

A lot of mistakes were made, but John still made a slim profit. All is well that ends well, but you don’t need to make these same mistakes. Learn from John.

So many people are write broad topics about flipping houses. I want to give some specific advice about house flipping.

Flipping Houses is a stressful yet highly rewarding buisness. I say buisness because if not treated like one, you can loose alot of money. I treat every aspect of house flipping just like I run any other buisness I’ve operated. I stay focused on the tasks at hand and keep precise records of every transaction.

Enough about that. I sure most flippers take the project seriously. I want to give some simple advice about what houses to flip. I will give more advice in other articles.

Before you buy a home to flip, you need to know your market. Especially the way the housing market is these days. This may not matter to thoughs that have more money than brains and can buy up everything that comes by, but knowing what the average homes sales price is is very important.

Lets say the average sales price is $125,000 within your particular area. This is your price point. If I said stay away from homes that are in the $250,000 and up range, this would be a no brainer. Obviously you don’t want to tie up that much money and would want to stay in the right price point. House flipping is about buying and selling homes quickly for profit. If you plan on holding the property for some time than buy in any price point you want. However to be a successfull, you’ll need to move your investment as quick as posible.

Well here’s where the advice come in. If your price point is 125K, than this also means stay away from $50,000 and 80,000 homes as well. The statistics don’t lie. More homes are going to sell within your average price point. High end homes move slowly and so do low end homes. However the biggest difference is you don’t have as much money on the line. This being said, even a low end home can eat up your profits in carrying costs if it stays on the market to long.

You can get more quick tips and full articles about flipping houses at www.HouseFlipper1972.com. Please visit and leave your quick tip for other flippers to read.

While house flipping can be profitable, you should know that it’s about more than simply rehabbing properties and fix and flip real estate transactions. In fact, it is a very good idea to arm yourself with some qualified house flipping tips before you take the proverbial plunge into house flipping.What Is House Flipping?In case you are among the 2-3% of the American public who has not yet heard of this practice, the term “flipping” in this context refers to the practice of purchasing a property that is either in disrepair and in need of rehabbing, properties that have been foreclosed upon, or are otherwise distressed. Fix and flip real estate transactions are common when the property in question is in need of repairs, but the fact is that properties can lose value for any number of reasons, not all of them having to do with the condition of the property. Not all such homes and properties will need rehabbing; properties that have simply been foreclosed upon also drop in value and can be purchased at a discount.Doing It RightOne of the best house flipping tips to keep in mind is that local bank listings are likely to yield the best source of potential fix and flip real estate is your local bank. These institutions usually maintain a listing of recently foreclosed properties that are in decent condition and needing minimal rehabbing; properties’ values in these situations have little connection to their physical condition. A second source of  potential fix and flip real estate investments is real estate auctions. Sometimes it is possible to pick up some real bargains here; however, be aware that such auctions usually attract buyers nationwide, so competition can be heated and prices can get bid up quickly.Financing Your Investment If you don’t have the means to finance such an investment, you can obtain a short-term mortgage for this purpose. You may have to contact an attorney however, as some municipalities have tried to discourage “flipping” by passing laws that require a buyer to remain in the home for a minimum period of time (usually around six months to a year).Return If you are planning to engage in a house flipping transaction, it cannot be overstated that you need to have a buyer lined up beforehand. If you are into rehabbing properties in need of repair, you may have more time if you have planned accordingly. House flipping can be profitable, but must be done cautiously and with advance planning in order to be successful.

Anytime you see a television show about flipping houses, you’re not likely to see the downside of this business. There are many sad situations where people who thought they would do good flipping houses fail and have to deal with the financial hardship. They must find a way to recover their losses and move on with life. Some people are affected slightly by a flip gone wrong while others are greatly affected by it. No matter how bad the effect is, you won’t see this snowball kind of information on a television show promoting the business of house flipping.

What To Do Before You Flip A House

Before you make your opening flip, you need to step back and make a decision not to become one of those house flipper failures that you hear about in chat rooms on the Internet. You need to think positive that you’ll be a success story that is seen on the television.

Take Time To Create A Plan

If you desire to be a success story, you’ll need to do some planning. Don’t make it a “on the whim” plan. It must be thought out. Study and research the properties you are interested in, check out their prices and values and compare them with the rest of the homes in the neighborhood. Remember that this is an investment and it takes months of planning to pick the perfect first flip that will boost the chances of success.

Be Realistic

When you’re planning the first flip, remember to be pragmatic and don’t expect too much out of it. The first flip is likely to be the least successful of all your flips; this is because you’re learning the ropes. You may make some money but it may not be very much. If you’re going into the buy thinking you’ll make money like you did as a full-time employee, you’re going to need to get out now. First flips hardly ever go as anticipated.

Set Aside A Large Budget

For your initial flip, put aside a little more money (typically two to three times more money than you would normally). This will help you cover the tangible costs that are needed including supplies, permits, labor and more. Most people don’t consider these costs initially. If you don’t have much or cannot afford to spend a lot, then it’s time to walk away since the property won’t be a good first time flip.

Plan Your Day’s Events

After you’ve purchased the property, it’s time to get to work. Make sure each day is full, cleaning and fixing up the home. You’ll want to have all the tools and materials at hand and even your lunch/dinner nearby. If you have to do a quick run for certain things, you lower the productivity level and progress made for the day. With proper planning, you’ll avoid these pricey delays and have a real estate house flipping story worth sharing to the world.