You probably don’t need us to tell you that Michigan’s economy is currently on low. We’re facing one of the worst housing meltdowns of all time, foreclosures are at near record levels, many people have lost their jobs, and a lot of once proud local business establishments are either shutting down or moving to more fertile ground.

(Incidentally, Dante Chinni has an interesting little take on our local economy in an item appearing in today’s The Christian Science Monitor: “In affluent Michigan, a firsthand look at the trickle-up recession.”)

In any event, if you’re thinking about buying, fixing up, and eventually flipping a property, you may want to read an article featuring our founder and CEO (Ralph R. Roberts) in this week’s edition of Crain’s Detroit Business:

For more, including Ralph’s own thoughts on flipping houses in this economy, read “Some area house flippers find upside to housing downturn” by Tom Andrew of Crain’s Detroit Business.

Today’s edition of The New York Times features the good work of our founder, Ralph R. Roberts, GRS, CRI. In addition to serving as the inspiration behind Ralph Roberts Realty, Ralph is a vivacious author, writing more articles and books over the last three years than perhaps anyone else in real estate.

To read today’s New York Times article, please click on the image below:

Our founder and CEO, Ralph R. Roberts, CRS, GRI, was interviewed for an article about investing in foreclosures that appeared in this past Sunday’s edition of The Tampa Tribune. As many people may know, Ralph wrote the book on investing in foreclosures and our staff here at Ralph Roberts Realty regularly helps people in the metro-Detroit area understand the pitfalls and upside associated with investing in foreclosures.

If you’re considering investing in foreclosures, read Ralph’s book, Foreclosure Investing For Dummies. In the meantime, here’s The Tampa Tribune interview:

The Tampa Tribune
Published: March 16, 2008

TAMPA - One in every 254 homeowners in the Sunshine State received a foreclosure filing in February. That’s the third-highest in the nation.

The foreclosure crisis is negatively affecting neighborhoods and the economy.

But like every crisis, this is viewed by some as an opportunity to profit.

As more homeowners and lenders get desperate to unload properties, they cut prices, making foreclosure homes enticing to real estate investors. Books on getting rich quick off foreclosures arrive on bookshelves daily, and experts are traveling the country holding foreclosure seminars. The process looks so easy that even people with no real estate experience are hanging out at county courthouses, poised to make offers on foreclosure properties.

With foreclosures on the rise and mortgage interest rates low, this may indeed be the perfect time to invest. But, experts warn, it’s easy to get trapped by pitfalls in the market. If you’re not careful, some warn, you may wind up in foreclosure yourself.

The Tampa Tribune interviewed three experts on investing in foreclosure properties and offers a sampling of their advice. The experts are:

- Ralph R. Roberts, co-author of “Foreclosure Investing For Dummies” and a real estate agent and investor in Michigan.

- Mike Kane, chief executive officer of St. Petersburg-based ForeclosuresDaily.com, which sells foreclosure data and holds classes on investing.

- Annalisa Burgos, real estate editor of FrontDoor.com, a Web site that features content from HGTV.

Don’t assume it’s a good deal just because the home is in foreclosure. And make sure you get a fair price.

“Sometimes people get caught up in the foreclosure hype and end up paying more for a home in foreclosure than they would pay for the same house down the street that’s not in foreclosure,” Roberts says. “Foreclosure homes are not always a good deal.

“People don’t realize that you make your profit when you buy and then you realize the profit when you sell. If you pay too much, you won’t make the profit on the back end. Even if you think you’re getting the home for a great price, you have to factor in the costs of fixing up the house.”

Do your homework.

Do a title search. Find out who all the lien holders are, and make sure you know the homeowner’s situation. You could get stuck having to pay those liens.

“Some novice investors can get into trouble when the lender holding the second mortgage forecloses before the main lender,” Kane says. “The investor may actually be buying the second mortgage and find out they still owe the first mortgage.”

Get an inspection, if possible.

Some deals that look too good to be true are just that, Burgos says. An inspection may show foundation, roof or termite problems. Some auctions don’t allow investors to conduct inspections before the sale, she says. Investors should be aware that at those sales, the deal may be final, even if the home has problems.

Some auctions will allow investors to tour the home. If that’s the case, Kane suggests you take a professional inspector or a friend with a good eye for problems.

Don’t wait for the home to work through the foreclosure process.

Buying a home directly from the homeowner, before a lender takes it back, could result in the best deals, the experts say. You can get lists of homes entering the foreclosure process at local courthouses or from some Web sites.

Frustrated homeowners are sometimes willing to give deep discounts to avoid a foreclosure on their record. Lenders who have a lot of foreclosure homes on their books are increasingly willing to accept short sales, which means they’ll allow the homeowner to sell the property for less than they owe.

This method isn’t best for most novices, Burgos warns, because it requires heavy negotiating with homeowners and lenders.

Don’t buy in a neighborhood with numerous distressed properties on the same block.

If multiple homes on the same street are in foreclosure, that could be a red flag that there was investor fraud in the neighborhood during the boom years, Roberts says. If that’s the case, homes may be overpriced, and you don’t want to invest there.

Walk the neighborhoods and talk to neighbors, he suggests.

“If the whole neighborhood is in trouble, you can’t fix that with your one investment home.”

Invest close to home.

Roberts recommends beginner investors print out a map showing where they work and where they live. Draw a triangle around the two locations and don’t invest outside of that area.

“You don’t want to drive 45 minutes to work and then have to drive 45 minutes more to get to your investment property,” he says. “You need to be able to get there easily and often.”

Buy and hold.

“In this market, people can’t even sell their own homes, so it’s difficult to quickly flip a foreclosure home,” Burgos says.

During the housing boom, investors bought homes and immediately flipped them to other buyers for a profit. That time is over, Roberts says. You can make a lot of money investing in foreclosure properties, he says, but you should be prepared to keep and maintain the property for several years.

From Detroit Free Press Business Writer Greta Guest (published on Tuesday, June 26, 2007):

Sales of new homes in the Midwest rose a robust 30.8% in May, while sales in other parts of the nation shriveled, according to a Commerce Department report today.

In May, 153,000 new homes were sold, up from 117,000 in April in the Midwest. But as compared to May 2006, new home sales dropped 14.5% in the Midwest.

“Where in the Midwest?” asked local Realtor Ralph Roberts, who has offices in Warren, Southfield and Washington Township. “I don’t see an increase in new construction in Michigan at all. It’s still soft.”

New home sales nationwide were down 1.6% from April, or an adjusted annual rate of 915,000. And they were off 15.8% from the May 2006 pace of 1.1 million homes.

Other regions of the country saw declines from the April pace including the northeast, with an 11% drop, the south, with a 7.3% decline and the west, with a 1.9% drop.

The median sales price of new homes sold in May was $236,100, a drop of 0.9% from the same month in 2006.

Robert “Bob” Bruss–a California Real Estate attorney/broker and the former director of the National Association of Real Estate Editors, but best known as a respected and widely syndicated writer and consumer advocate for all things Real Estate–just reviewed our founder–Ralph Roberts–latest book, Flipping Houses For Dummies. From Bruss’ weekend column:

Realty Broker Reveals How to Profit From Flippers
By Robert Bruss
Sunday, December 17, 2006

In good markets or bad, real estate broker Ralph R. Roberts reveals in “Flipping Houses for Dummies” how he acquires run-down houses, fixes them up, and then either “flips” (sells) them for a profit or holds for long-term investment. Roberts, a highly respected real estate author, trainer and broker, shares his techniques along with advice on how to minimize the tax bite on profits.

Every serious real estate investor who wants to earn large profits needs to understand the methods Roberts uses because he has perfected flipping houses almost to a science. He thoroughly understands and explains all the critical aspects, including locating the properties to determining if they are suitable, negotiating a successful purchase, supervising the fix-up work, and making a profitable resale.

As a longtime real estate broker, Roberts knows all aspects of the home brokerage business and he doesn?¢‚Ǩ‚Ñ¢t hesitate to share his insider secrets. For example, he says, “Nothing on the MLS (multiple listing service) is the gospel truth. Sellers and real estate agents alike often estimate room sizes or make mistakes when entering details. Approach all prospects with a discerning eye.”

Even if you are not interested in “quick flip” real estate profits, this is a great book to study because the author shares so much of his real estate knowledge which he gained, starting at age 19, over more than 30 years in the real estate business.

Maybe Roberts is getting a little “salty” in his old age, but he exposes secrets most Realtors would never share with their clients. Examples include how to obtain a “listing history” of a property, how to determine what the seller paid, how long the property has been on the market even with more than one listing, and if the property is difficult to “unload.”

This is a “fun read” book in the usual dummies style, which includes features such as tips, warnings and even several sanity checks. Along the way, Roberts shares many personal examples to illustrate the topics, making the book extremely valuable so the readers don?¢‚Ǩ‚Ñ¢t make the same mistakes he made.

Throughout the book there is heavy emphasis on what to look for in a potential flipper house, how to locate them, how to acquire them, and how to finance them. Roberts provides valuable insights about the importance of borrowing funds. “As a real estate investor, good debt gives you leverage,” he advises, meaning you control the property with little of your own cash.

Along the way, there are several excellent checklists such as the “profit projector” and the “home inspection checklist” so no important aspect is overlooked when evaluating a possible flipper candidate.

Especially valuable is the chapter on “The Art of Haggling: Negotiating a Price and Terms.” Having sold thousands of homes at his real estate brokerage, Roberts is a “pro” when it comes to negotiation and putting sales together. His negotiation strategies are priceless. I especially enjoyed the part about “digging up pertinent information about the seller.” If you are a serious real estate investor, this chapter is a “must read.”

Foreclosures receive extra attention because they offer special flipper profit opportunities. Acquiring these properties can be tricky, but Roberts simplifies the process as much as possible without getting bogged down in details. Of course, it helps that he has a full-time associate who specializes in acquiring these distress properties.

This book is designed for realty investors who want to profit from buying below market, making cosmetic improvements to add value, and then quickly reselling. But real estate agents and home buyers should also study it because of the valuable insights offered by a longtime, very successful real estate broker. On my scale of one to 10, this superb book rates an off-the-chart 12.

Since Ralph works right here in our Warren office, you can talk with him anytime about investing in real estate. For more information, please click here or call our office at (586) 751-0000.

Here at Ralph Roberts Realty, we’ve become accustomed–as has everyone else, we suspect–to pointing out when our founder and namesake graces the pages of a local newspaper or national magazine. After all, when Time magazine calls you “the best-selling REALTOR?Ç¬Æ in America,” you’re bound to make headlines.

This time around though we’re pleased to point out that another one of our staffers, REALTOR?Ç¬Æ Joy Santiago, has made the news. Click here for a picture of Joy, our picture of health!

The National Association of Realtors?Ç¬Æ today announced that nationwide, existing-home sales for July were down 4.1 percent, while home prices here in mid-west are 10.1 percent lower than they were last summer. For homebuyers, this is very good news.

Higher interest rates are clearly dampening sales, but that’s good news for the housing market because it’s also drawing in new buyers. For years now, potential home buyers have been sitting on the sidelines, some ?¢‚ǨÀúkicking the tires,?¢‚Ǩ‚Ñ¢ but mostly waiting for sellers to compromise on prices and terms. Now, sellers in many areas of the country–including here in Michigan–are setting their home prices to reflect current market realities, which generally tends to benefit price sensitive buyers.

Earlier today I was interviewed for a segment that appeared on this evening’s ABC’s World News Tonight (click here to view the segment online). ABC’s camera crew followed me around as I showed them a $200k home that recently sold for $140k, and another where the buyers chose to slash $40k from their original selling price.

Existing-home sales here in the Midwest fell 5.9 percent in July, while the median price of a home in the Midwest was $178,000.