GLIGA Blog

At Great Lakes Insurance Group Agency we write vacant, rehab, and tenant insurance in the city of Detroit as well as all over Michigan.  If anyone needs insurance help, let me know. I would be happy to help any way I can. We felt this blog post was intertesting so we reposted it here.

The Home Insurance Specialists

www.getgliga.com

Sorry about that play on words in the title. I do know how to spell most words. Here is an email I received from a client I am working with on some insurance issues.

"Hello Mr. Stevens,
 
Here's a link that you can click to show how they are trying to cope with the foreclosures in Las Vegas www.lasvegassun.com/news/2009/oct/15/nevada-bucks-nationwide-downward-foreclosure-trend/
**also view the comments.
 
I lived there 2 years ago. I know first hand that some of the new homes weren't selling and the developers rented the homes out - this was on the news. Apparently, this is what they are doing now to curb the destruction of these properties. Here on the west coast, the people of foreclosures (I'm not sure if I should say victims) they are also flooding the homes, pulling copper wire, removing cabinets, toilets, holes in the walls, removing lighting fixtures.....In fact, there were scams where people would rent out million dollar homes for $1,000 a month.
 
I now see why the prices are slow to come down here, they are not releasing all of the homes. There's also rumor that it has something to do with new legislation that maybe there will be some kind of RTC to take these properties, or something to do with getting more TARP money. BTW, one of the properties for condos, I think it's Flamingo Palms, the homeowner assoc DOESN'T own the land. These condos once sold $100K+, now some are as low as $10k but the homeowner dues are $400+ monthly for legal fees.
 
Thanks,
Carla"

Anyone have any thoughts on this?

I recently received a comment/question sent to my email by a future customer who had read one of my blog posts on active rain. I wanted to post it here so others could get some insight into issues that need to be addressed when buying properties especially in urban areas. I asked the client to watch the posting for information that may be helpful to her.

Carla writes,

"Hello Mr. Stevens,
 
I saw your comments on Activerain.com. Here's a scenario for you, I would like to purchase this home at **** St. Detroit, MI 48224 - it has extensive fire damage. This is okay, as I would like to be able to renovate the home (upgraded wiring, plumbing....) the problem is I live on the west coast. I do plan to occupy the property once it is rehab'd.
 
The problem I have with most RE agents, they don't really want to give the information I need to make an informed decision, so I have repeatedly walked away from buying. I never get the answers to the following questions, 1) total cost to purchase property, such as special assessments through code violations if any, back taxes, what the actual taxes are, closing costs, title ins.... 2) where exactly the property is located, example, Indian Village...., 3) if the home is tagged for demolition, 4) if I purchase home that needs extensive repairs, since I am out of state, do I have to start rehabilitation of home as soon as title is transferred to me - or can I wait to start rehab, is there a time limit before code violations/citations are issued to me as new owner.
 
My question to you, is how much would it cost to insure this home during and after rehab? ***I would like to be present when rehab is being done.
 
Any and all help you could give is appreciated.
 
Thanks,
Carla"

My response,

"You have some great questions and it it good to see someone
approaching real estate in Detroit with some foresight and maturity.
Most investors see the sale price and they do not think about the
additional costs and hidden costs that come with a home needing rehab.

 Is it OK if I re-post your question on active rain so others can be
made aware of potential problems when purchasing any real estate?

Finally, the answer to your question. How much are you buying the home
for and how much will you be spending on rehab?  It sounds like a
contractor is doing the work, or are you doing the work?

Thanks for the email and I hope to hear from you soon.

Don Stevens"

I felt any feedback we could get could create a record of some great dialog and also help potential buyers become aware of the little things that need to be addressed when buying properties needing rehab.

I am an insurance agent in the Detroit Michigan area.  In March of 2004 I officially started my independent agency GLIGA (Great Lakes Insurance Group Agency) entirely by myself. I had been in the insurance industry since 1998 selling life insurance and decided to try selling home and auto insurance. I sold the very first policy and still sell policies today.

When I started my agency I was also working at Target from 4am-1pm 5 weekdays. I would leave Target and go home to change so I could go into a little office I rented to return voice mail and market myself until 9pm that night.  I hated getting up at 3 am and I still am not crazy about getting up at 8 am but I had to find a way out of the 4am-1pm trap I was caught in. I was glad to have the job but knew my future was limited and I was earning $9 an hour with a wife and four kids and one on the way. My wife couldn't work because the cost of child care for our preschool aged children would have cost more than she could make at any job she could find.

Every day I would go to my little office that cost me $300 a month plus $250 for a phone and try to find customers.  I quickly learned that the fastest way to generate clients was through referral. Not BNI, chambers of commerce, or business after 5 meetings, but through getting to know people who would send me customers because they needed my help.  I knew a couple of Farmers agents and I started with them. They would send me the stuff they couldn't write and I wouldn't go after anything else they had.  That way I would get some business and the agent could protect whatever else the customer had with him.

My checks eventually grew to $2500 a month. Not a killing, but when you are making $360 a week, $1600 a month, that was enough so I could quit Target. Sleeping in until 8 was awesome. I felt like I was on vacation. I actually was coherent and alert upon waking up. It was great.

Now I needed to turn it to high gear. I started recruiting to show new agents how to grow a predictable book of business.  We quickly became an agency that wrote 200-300 policies a week with several agents and staff. Today in 2009 we are licensed in 8 states and soon to be more with multiple agency locations. We continue to grow our agency force, locations, and referral base in Detroit in the worst economy anyone around here can ever remember. We are not just the Big 3 here (Ford, GM, Chrysler), we are the suppliers to the Big 3. So when the Big 3 goes down we all go down.

Over the last year we have focused on our Internet advertising. We generate exclusive leads every day and our conversion rate is high because we are perceived as experts in our field. I target niche products so I don't get drowned out by all of the other insurance websites out there. My website is not great, http://www.getgliga.com, but the marketing is. We spend about $500 a month on advertising and I am now looking for website referrals sources. I try to partner with websites that have products that compliment mine where my product is not represented well. Activerain.com happens to be one of them. I try to contribute to high quality sites hoping that they will enhance my image and visibility on the Internet and eventually lead to future customers.

One site I found to be very helpful in marketing my business was an online local directory. This is a website that targets customers by IP address and pushes the local businesses to the local customer. When someone gos to the website it automatically knows where they are physically and lists the local businesses in the margin. I can target my zipcode 48076 and the zip codes around me so when my community is on Facebook, Twitter, Google, Boomj, I will get a chance to be seen by them. It is easy for them to do business with me because we are in the same town. So when my customers see me they have seen me many times and start to think I am everywhere. It is pretty awesome and I have already seen customers come in the door.

This company charges me about $100 a month to target 10 local zip codes. I get to put in my business details, pictures, video, web link, and coupons on there so a potential customer can get to know us way before they decide to buy from us. I have had customers come in telling me what they wanted before I even had to explain the products because they are educated consumers. The sales cycle is dramatically shortened and I am able to focus more on the relationship with my customer than I do on building trust and credibility.

The last great thing about this program is that I can also sell the ads to other people. Because I am a customer and have actually seen results, I am able to help other people build their business also and get paid to do it.  Google, Yahoo or any other website has never asked me to sell ads for them. I probably wouldn't know how anyway. This is point and click setup is easy for anyone and all I have to do is tell people about my success and it sells itself.

If you are looking to advertise in specific zip codes for a small amount of money on a website that is highly ranked and has a large network of partner sites and referral networks then you should look at this website. If you are looking to make some extra money (40% commission for as long as they are a customer) and help other people market themselves so they can be the last ones standing when this economy gets done shaking out, then you should take a moment to go through it.

To check out how to advertise on the network, go to http://localadlink.net/gliga and click on the One Word on the bottom of the page. To check out how to sell ads go to http://localadlink.net/gliga and click on the One Opportunity also on the bottom of the page. Doing both is what I did. I get the 40% commission on my own ad and I get to tell people like you how to increase your web presence and get paid doing it. If you have any questions you can email me at donstevens@getgliga.com and I will be happy to share.

I am not a marketing guru or life coach, just an insurance agent trying to pay the bills like a lot of people. I believe with real hard work and persistence, we can succeed no matter what stands in our way. If we continue to try and never give up we will make it big, or at least have one heck of a story to tell when its over. Either way it will be a life that was lived. Thanks for your time and interest in my story.

Donald Stevens

The Home Insurance Specialists

http://www.getgliga.com

What Are Some Coverages Perils On A Landlord Insurance Policy?

Some basic coverages are fire, wind, hail, lightning, explosion, emergency repair after loss, debris removal, fire department charges, damage from a vehicle or aircraft, and emergency removal of personal property.

Some additional coverages you should consider when purchasing a landlord insurance policy:

Vandalism and Malicious Mischief are coverages when some one vandalizes or intentionally damages your property. A good example would be a disgruntled tenant "remodeling" your home while moving out.

Loss of Rents are coverages that provide a monthly rental payment to the landlord from the insurance company while the property is being repaired. The damage would have to be severe enough that it would be unlivable for the tenant. It is a nice coverage when you are not able to collect rent from the tenant because that can't live in the home.  FYI, tenants can also get a loss of use coverage from a renters policy to pay living expenses for them while the property is being repaired.

ACV (Actual Cash Value) verses Replacement Cost are two very important options when purchasing a landlord insurance policy.  ACV is a policy that will pay the homes current market value when there is a total loss. Replacement cost will pay for the home to be completely rebuilt after a total loss.  Replacement cost policies are usually more expensive.  ACV policies are usually a required coverage on a vacant property.

Personal Property is a coverage for landlord property such as a stove, washer, dryer, and any other property owned by the landlord at the property.

For quotes on landlord or vacant property insurance please go to http://www.getgliga.com or call us at 888-438-4544.

The Home Insurance Specialists

Why is it so hard to insure a vacant home?

The biggest reason is that when a home is vacant a very small problem can become a very large problem. Take for example a leaky sink.  I had insured an apartment building and when the tenant moved out they did not turn off the plumbing completely on the second floor when they removed the appliances.  The dripping was so slow it was almost unnoticeable but brought the ceiling down on the first floor and destroyed some cabinets.  If no one is actively working on the property an a daily basis, a home can really accumulate some damage.

Another problem is vandalism or theft.  A property left alone is prone to attract the wrong element expecially in a more urban area like detroit.  We have cases in Detroit where other investors steal cabinets, plumbing, and other building materials for their own property.  It's a horrible thing.  Also when copper was a hot comodity many homes were being stripped for salvage. We also had a home insured that was used for a dog fighting arena because someone knew the property had been vacated.

Many companies are not equipped or have the underwriters to properly rate and write insurance on vacant properties. There are companies that specialize in vacant home insurance and are offered by some agents.  The hard part is finding the agent who knows the product and writes for the company.

We have chosen to specialize in insuring homes, landlords, and investors properties.  We insure vacant properties even while being rehabbed.

For advise or a quote please visit our website at http://www.getgliga.com or call us at 888-438-4544 and ask for Don

The Home Insurance Specialists.