Top 9 Used Car Salesmen Tricks, and How to Avoid Them

One of the biggest moments in many people's lives is driving off in their brand-spanking-new automobile. It's an exhilarating feeling. It's also a big moment because in that very instant, that brand-spanking-new car loses a big chunk of its value-the difference between the retail price you paid and the car's wholesale value. That's typically thousands gone in an instant.

That's why some car buyers choose to shop around for a used car. You save yourself that steep initial drop-off in value. More importantly, you get a car that runs just as well, is just as dependable, and looks and feels as good as that new car-that is, if you play your cards right.

For if there is one pitfall of buying a used car, it's the risk of buying a lemon, a junker-call it what you want, you get the point: the wrong car. Used car dealers, after all, have nearly as bad a reputation, if not worse, than lawyers do. This holds true for individual people selling their cars through newspapers, Web auctions and classified sites, or with the old-fashioned signs in their car windows. The saying, "Buyer Beware," no where has more meaning than with cars.

The opposite to that, of course, is that there are some real steals out there in used cars. We're talking about quality vehicles that will perform beyond your expectations at a low price. Here's how to find these perfect used vehicles, and avoid the top 10 scams that used car dealers everywhere try to pull on you.

1. Get a second opinion for the hype.
Used car dealers will bombard you with every adjective under the book to sell you on a car-sporty, thrifty, fast, and etc. Don't take their word for it. Instead, find someone you know, whether a neighbor, a colleague, a family member, or a friend, who owns the same make and model of the vehicle, and ask them for their opinion.

2. Do a background check.
One of the most unethical, but legal, things someone can do to you is sell you a used car that's been in a flood (and sort of repaired), or one that's had 10 previous owners (none of whom repaired it). To be sure you don't fall victim to this, track down a history report, including a clearance check on the vehicle title. You can even get some of this information from the seller, simply by asking why they are selling it. You'd be surprised what beans people may spill.

3. Examine for past damage.
Used car dealers may also try to peddle a vehicle that was wrecked in a major accident. It's amazing what autobody experts can do to repair a car's exterior. So don't go by the outer appearances of a vehicle. Before you buy it, make sure that it does not have serious damage to its frame, which it would have if it was involved in a crash.

4. Call up your trusted mechanic.
Used car dealers, especially the big lots, will say they put their used cars through a "100 point inspection," or something like that. Once again, a second opinion is in order. Get this one from your own mechanic. He'll be able to tell how good a shape the car actually is in. Also be sure to ask him or her how often the car had been serviced. A good mechanic can even gauge that.

5. Research for recalls.
Needless to say, a used car dealer may sell you a car that's actually under recall in his mad rush to get the car off his lot. So be sure to call the car manufacturer, or visit their Web site, to see if the vehicle has any active recalls.

6. Avoid the leftover lemon.
Along with recalled vehicles, dealers may even perpetrate something much worse on you-sell you a lemon. (By definition, a lemon is a car that's still under warranty, which has such major problems that, warranty or not, it still cannot be fixed in a reasonable way.) The best way to avoid this is to research in Consumer Reports or the various automobile magazines, which all have yearly reviews of every make and model on the market. They'll tell you whether a kind of car is known for being a lemon and prone to breakdowns.

7. See through the old paint and bait.
Along with performing their "100 point inspection," car dealers may shine and wax a used car-even repaint it-to hide dents, dings, and rust spots. A keen eye, though, can see right through this.

8. Take the test drive.
Once you've done all your research, homework, extra credit, and everything else called for in the first seven steps, then comes the fun-the test drive. Drive the car for as long as its owner or dealer will allow you. Then you'll get a better feel for how the vehicle handles, accelerates, brakes, and otherwise suits your tastes (or doesn't).

9. Be wary of the pushy seller.
At any stage of the game-from the moment you first talk to the seller to the test drive-be careful if the seller gets pushy. Any dealer or seller who is in a rush to move a vehicle should set off bells and whistles. Why the rush? Are they hiding something? In some cases the seller may just be excited to sell you the car-and actually happy for you-but in many other cases, they may be up to something. Better be safe than sorry.

Follow these 9 simple steps to avoid the scams and pitfalls of used car deals, and you could get the car of your dreams-for far less than you'd pay if it was brand-new. Plus, you get that same high when you drive your new used car home, without losing thousands of dollars.

Author Bio
Donald Lee is the public relations manager for Buysellcommunity.com. Buysellcommunity provides free classified listing services. Buy, Sell and trade: auto, computers, household items, real estate, pets and much more. For global and localized classifieds, please visit http://www.buysellcommunity.com - Free Buy & Sell Classifieds

Berni's Comments: I thought this would be a good article to review and save, since we all must decide between BRAND NEW or USED when it's time for the next vehicle. Many potential first-time home buyers hopes get crushed due to new car payments which could have been avoided or at least averted until they actually bought a nice home. After all, why "live" in a car? When with a little patience and conservative budget, you can still drive a car you'll love (or at least, really like) that you bought at a reasonable price with no weighty payments over your head. Then you can live in a comfortable home and enjoy a soft pillow to sleep peacefully upon...every night!

Calculating the Cost of Building a New Home

Question: I want to build a 2,800-square-foot home with four bedrooms, two and one-half baths, a gourmet kitchen, walkout basement with media room and three-car garage in Pennsylvania. How can I estimate the cost to build the house? And what do you think about modular homes?
-- Sheila, Spring City, Pa.

Answer: According to B4UBuild.com, which sells books on the subject of cost estimating, the average cost-per-square-foot to build a home on site is between $95 and $150.

Now wipe those numbers from your mind.

Contractors generally agree that cost-per-square-foot is a terrible way to budget for a home, because there are so many variables involved. Do you insist on top-of-the-line cabinets and appliances for your gourmet kitchen, or will mid-range ones do? Are you planning to side the house with cheap vinyl or expensive stone brick? Is the house going to be one story, or two? (The latter is generally cheaper because the foundation is smaller.) Will you have simple, rectangular rooms that minimize the materials and the labor required for framing, or unusual shapes like octagons with vaulted ceilings? What sort of flooring, bathroom fixtures and heating and cooling system will you have? Is the lot easy to access, relatively flat and easy to dig, or is it rocky, heavily wooded and uneven?

There are a few Web-based calculators that can help you make rough cost calculations. One easy-to-use, free one is Building-Cost.net, which adjusts not only for the quality levels of finishes and fixtures, but also for location, down to the city level. But bear in mind that this and other calculators won't give you an exact estimate, since ultimately that will be determined by the profit margins of the contractor you hire -- information you can't really know in advance.

So if you go the site-built route, I suggest that you start with a dollar amount that you're willing to spend. Interview at least three contractors and check their licenses and references and look at their work.

Once you've found someone you like and trust, the two of you can take your preliminary budget and work backwards, including the must-haves and eliminating the mere wish-I-hads as money allows.

Be sure to keep a cushion of at least 10% to 20% of the total project cost to cover last-minute changes, delays and other problems you can't foresee (for example, the cost of lumber spiking mid-project).

Now to your question about modular homes. Manufacturers of these homes, which are built in a factory in sections, say they are a lot more durable than site-built ones, since they are constructed in controlled conditions. But modular homes still make up only a tiny fraction of new home sales -- only 3.6% of the 1.06 million new homes sold last year, according to the National Modular Housing Council. (Click here for a list of manufacturers.)

That's partly because some consumers remember how uninspired modular homes looked in the 1980s and because some people still confuse them with so-called "manufactured homes," also known as mobile homes or trailers.

These days, computer-aided design means that almost any house plan you choose can be made into a modular home. I think modular homes are fine and definitely worth considering, as long as you can visit a model or a nearby factory. Don't assume you'll save a few bucks, however. In fact, by the time the house is delivered to your lot and assembled, it may cost as much as a site-built one.

By June Fletcher
From The Wall Street Journal Online

-- June Fletcher is a staff reporter at The Wall Street Journal and the author of "House Poor" (Harper Collins, 2005).

Berni's Comment: Hope this helps all who are determined to build their dream homes instead of buying an existing dream home. Either way, I'm here to help.

When Home Builders Hit the Skids

When Home Builders Hit the Skids
Consumers Deal with Uncertainties

The tumbling housing market is claiming a new class of victim: customers of insolvent home builders.

In the latest sign of trouble, Ft. Lauderdale, Fla.-based Levitt & Sons, a unit of Levitt Corp., filed for Chapter 11 bankruptcy protection last Friday, citing the "sudden and steep" downturn in the Florida housing market. Levitt's move follows bankruptcy filings by a number of local and regional builders, including Neumann Homes Inc. in Illinois, Elliott Building Group in Pennsylvania, Turner-Dunn Homes Inc. in Arizona and Kara Homes Inc. in New Jersey. Many other builders simply close up shop.

And the situation is likely to worsen in the first half of next year, says Ivy Zelman, an independent housing analyst. "We're in the first or second inning," Ms. Zelman says. "There are going to be a significant number of insolvent builders."

Unfinished Business

As more builders flounder, their customers can face the following issues:

• Buyers who haven't yet moved in could lose all or part of their deposit -- or wait months for their house to be completed.
• Homeowners could find that liens have been put on their homes by contractors who haven't been paid.
• Communities may have to wait for the completion of roads and amenities such as swimming pools.
What a builder's troubles mean for its customers can vary, depending on factors such as state law, contract terms and how long it takes to get the project back on track. In some cases, buyers may lose all or part of their deposit or wait a year or more for their house to be completed or the builder's financial troubles to be sorted out.

Homeowners who've already moved into a new development can find themselves living near a half-finished house where work has been halted. They also face other questions, such as who will handle needed repairs, what will happen to a promised swimming pool and whether contractors have put liens on their properties -- which could block access to financing. In some cases, local communities have stepped in to fix unfinished roads or pick up overflowing Dumpsters.

Jeff Benes and Maggie Byrne paid $269,000 for a four-bedroom Neumann home in Antioch, Ill., in 2003. Now they are wondering what the company's bankruptcy filing will mean for property values -- not to mention who will plow the development's unfinished streets this winter and when the promised clubhouse, pool and volleyball courts will be completed. "We're all up in the air now not knowing what is going to happen," says Ms. Byrne.

As the housing market has slumped, builders have struggled with rising inventories, falling home prices and cancellation rates that have topped 40% in some markets. Land prices have also dropped, leaving builders owing more for some parcels than those properties are now worth. Banks, meanwhile, are tightening their standards -- not only for home buyers, but for the builders as well. IndyMac Bancorp Inc., which lends to small and midsize builders, said earlier this month that it expected 30% of its home-builder loans to be delinquent by the fourth quarter. The company says that it stopped making new construction loans to builders in August.

During the early 1990s housing downturn, some 15% of home builders went out of business, according to the National Association of Home Builders. The number of bankruptcy filings was very small, says NAHB research director Gopal Ahluwalia. Most troubled builders simply shut their doors or moved into other ventures. No one currently tracks builder bankruptcies, he says.

Often, builders' problems are evident long before any public filing. Before Kara Homes filed for Chapter 11 bankruptcy a year ago, construction crews at its Horizons at Birch Hills development in Old Bridge, N.J., began disappearing, and vendors who had worked on the development were replaced by others who seemed less experienced, says homeowners' association president Frank Ramsom. Kara employees also "started to neglect meetings" and provided "cryptic" answers to homeowners' questions, he says.

Perry M. Mandarino, who was brought in to serve as the chief restructuring officer for Kara Homes, advises people buying a new home to "drive past it every few days or every week, not just on a Saturday," to check on construction. "The warning signs are real obvious," he says. "There's a lot of construction, and all of a sudden it stops. There's inclement weather and they are not boarding up the property."

For buyers who are under contract, the biggest risk is that they will lose their deposit. Some states, such as California, require that homeowner deposits be held in escrow or that the builder post a bond. But in other cases, the builder may be able to tap the money, which may make it harder to recover.

When Turner-Dunn filed for Chapter 11 protection last year, more than 150 homeowners had outstanding deposits ranging from $2,500 to nearly $28,000, according to bankruptcy filings. Turner-Dunn had disclosed in a public report given to buyers that deposits would be used to fund construction and were not being held in escrow, says Mary Utley, a spokeswoman for the Arizona Department of Real Estate.

It's not yet clear how much of that money will be returned. Dan Collins, an attorney for the bankruptcy trustee, says the outcome will depend on future litigation. Under federal bankruptcy law, homeowner deposits take priority over certain other unsecured claims, but only amounts up to $2,225 are covered.

One homebuyer, Brett Angner, put down about $26,000 on a Turner-Dunn home he was purchasing as an investment. He calls his chances of getting his money back "minimal."

Frontier Homes Inc., an Ontario, Calif., builder that bought Turner-Dunn's assets, offered buyers the chance to complete their purchases without an additional deposit. "But it would have been imprudent of us as businessmen to say, 'Here's your money back,' " says Frontier senior vice president Michael Dwight.

Buyers who still want to move into their homes can find themselves living in limbo. One couple waited three years for their $1 million Kara home to be completed. "This woman and her husband had twins," says Mr. Mandarino. "They had to live with a relative."

Another issue: Who will handle the inevitable problems that come with new construction? Builders often provide third-party warranties, but Neumann Homes told buyers it would cover defects that appeared in the first year itself. Homeowners are concerned that the company won't honor that warranty, says Dennis Crosby, a trustee for Antioch, Ill.

Residents are grappling with other uncertainties. Each year, Neumann has installed a ice-skating rink in its Antioch development. But some residents aren't sure they want to pick up the roughly $8,000 tab this year -- or if they have the authority to stop it, says Mr. Crosby, who owns a Neumann home. Village officials say they expect any developer who takes over the project to complete the clubhouse, swimming pool, parks and other promised amenities.

Ken Neumann, the company's chief executive, says that "it's likely that the one-year builder warranty will lapse," but adds that structural and major mechanical defects are covered by a 10-year third-party warranty. Mr. Neumann says money has been set aside in escrow to cover the cost of uncompleted amenities. Neumann Homes is working with its lenders to get homes under construction completed, he says.

Troubled builder Levitt & Sons halted construction at its Seasons at Prince Creek West development in Murrells Inlet, S.C., a few months ago.

For homeowners, promised amenities can sometimes seem like pipe dreams. At Levitt & Son's Seasons at Prince Creek West in Murrells Inlet, S.C., a gated community for residents 55 and older, a 25,000-square-foot community center -- with tennis courts, indoor and outdoor pools, computer rooms, bocce court, an arts and crafts room and health club -- is only partly completed.

"We were told that if it wasn't protected [from the elements] within 30 days, whoever picked up the project might have to knock it down and start all over again," says Charles Brindley, a retired graphic artist, who closed on a $375,000, 2,124-square-foot home in the community in July.

Many builders, including Levitt, have also stopped paying their vendors. Those vendors, in turn, have placed liens on the homes of people living in the communities. Some Levitt homeowners have as many as 20 different liens on their home, according to an executive at one of Levitt's Georgia divisions. Such liens mean that the owner can't refinance, get a home-equity loan or sell the home. Other Levitt homebuyers can't close on their properties because the builder hasn't been able to sign a sworn statement that it has paid off all subcontractors and suppliers.

Paul Singerman, lead bankruptcy counsel to Levitt, says that since the filing, the builder "is already trying to ameliorate a number of legitimate concerns." Those include asking the court to allow it to resume home sales, returning deposits posted after Aug. 29 to certain customers and filing claims for the vendor liens so payments can be arranged.

In addition, Mr. Singerman adds, under the supervision of the bankruptcy court, Levitt will attempt to move ahead with a plan to either finish substantially completed homes or sell partially completed developments to another developer or investor. Levitt has about 30 developments, none of which are completely finished, Mr. Singerman says.

In some cases, homeowners and local governments have stepped in to pick up some of the pieces. After Kara Homes filed for bankruptcy, residents of Horizons at Birch Hill hired an attorney to represent them in the bankruptcy case and a maintenance man to fix common problems.

To keep the stalled project from turning into a health and safety hazard, the town of Old Bridge, N.J., pulled out 40-foot Dumpsters that had been left on the property, sent in police for regular patrols and fenced in a hole that had been dug for a swimming pool. "These people were left in one heck of a lurch," says Old Bridge Mayor Jim Phillips.

For some homeowners, the good news comes with the arrival of a new developer. Kara Homes' Horizons at Woodlake Greens development in Lakewood, N.J., was bought by Maplewood Home Builders in September. The new builder says it is now working to fulfill its promise to complete the clubhouse in time for Christmas and have the swimming pool ready by spring.

Since Maplewood took over, "the tempo here has been terrific," says Jim Lithgow, who bought a Kara home two years ago and is president of the homeowners' association. "It's a story of anguish and passion. But now we've turned the corner."

By Ruth Simon and Kemba J. Dunham
From The Wall Street Journal Online

Email your comments to rjeditor@dowjones.com.

Berni's Comments: Now. More than ever it's important to deal only with reputable home builders who can deliver what they promise. If you plan to build in Hampden County, call me. As an Accredited Buyer Representative (ABR), I will do all I can to assist you along with a preferred home builder to make your dream home -just that.

7 Materials For Creating The Perfect Kitchen Countertop

The kitchen countertop has to be able to take a lot of abuse including the heat of pots, cutting and knives and abrasive cleansers. The ideal countertop should be able to stand up to heat and the sharp edge of a knife.

Let us take a look at 7 of the most popular kitchen countertop materials being used today:

Granite
A natural stone, granite is a popular choice for it's classic beauty and durability. Granite is the hardest and densest of the natural stones. It can create a kitchen countertop that is extremely scratch resistant and can keep its luster longer than most materials. granite slabs are the most expensive of all kitchen countertop surfaces, although it is still considered a very practical material in that it is virtually indestructible.

Marble
Another natural stone, marble is considered to be the height of elegance and will last longer than most kitchens. It is however, is very expensive and requires some care: acidic foods such as orange juice will etch the finished surface of a marble kitchen countertop.

Slate
Because of it richness and beauty slate is usually used in interior applications such as kitchen countertops, bathroom sinks or fireplace surrounds. It can be used in either modern or traditional kitchens as well as in combination with marble. Slate is durable, strong, and can withstand hard use. It is less expensive than marble.

Concrete
This is one of the biggest trends in kitchen countertops today. It is a good look for clean, industrial and contemporary kitchen designs. Available in pre formed sections or poured and formed on-site. Concrete is a good material for unusually shaped counters. Concrete kitchen countertops are expensive, require a sealant and must be treated with care. The countertop can crack if the concrete should contract. Concrete can be stained any color. The most popular color is a natural gray tone. The top layer can be finished as desired.

Corian
A solid surface material that first became popular in the 1990's It is highly recommended by kitchen countertop experts. It is a totally manmade product and is not porous. As a solid surface it can easily be repaired if scratched or burned.

Stainless Steel
Advantages include very hygienic, easy to clean, has ability to stand up to exteme wear and heat. Stainless steel can provide a great look for an ultra modern kitchen. Some disadvantages with stainless is that it can be noisy and that scratches can develop.

Tile
Tile surfaces can be tough, hard-wearing, takes hot pans, heat and stain resistant as well as beautiful. There are many types of tiles including ceramic, porcelain, quarry, glass, natural stone and mosiac. Available in many colors, sizes and textures. It has good design flexibility. Tile can often be used for trim or backsplashes. The downside of tile is that the grouts can be easily stained. Also the tiles can become chipped or cracked.

Author Bio
James Mahoney is the owner of Kitchen Designers Idea.com. Learn about today's kitchen design ideas by visiting his site at Kitchen Designers Ideas.com. If you liked this article and would want to subscribe to his information packed newletter visit: Kitchen Designers Ideas.com

Berni's Comments: I want to add this as a part-two to the kitchen remodeling post. Reason: I really like Mr. Mahoney's website packed with useful information. I think it will fill you with lots of jazzy ideas for your new kitchen project!

To All My Dear Clients

Below is a copy of the color ad that appears in the House Hunter (Pioneer Valley's Showcase of Homes) for Nov. 15th-Dec. 17th, 2007.
♥ The price of the 16 Acres home has been reduced to : $219,900. and it is FABULOUS, great for someone with a home business too! The address is: 6 Vann Street, Springfield, MA 01119.
♥ The seller of the 2-Family in East Springfield is willing to help with closing costs for serious and solidly pre-approved buyers. This is a great deal for only $164,000. The address is : 48-50 Glenham Street, Springfield, MA 01104.
♥ The land in 16 Acres is at the end of Durant Street, Springfield, MA 01129 and borders conservation land for completely serene surroundings. Onlt $57,700.
♥ Where can you get a condo for under $35,000? It is located in a former luxury hotel and would be great for someone tired of home maintenance… or a commuter… or perhaps a business owner who wants to impress clients with the grand art deco style lobby… or a rental unit. It is located at: 140 Chestnut Street, Springfield 01103 on the 5th floor.
♥ Coming soon: Pine Point bungalow updated with large garage and on large lot (also with disabled accessibility, if desired). More listings to come …always check my website for updates:
♥ MY ABR LISTINGS are on my website. All price ranges: modest homes to luxury homes. If you're moving to the Greater Springfield Massachusetts area or the surrounding communities in Hampden or Hampshire counties, I will be happy to meet you at any one of our offices located in East Longmeadow, West Springfield or Wilbraham. Then we can discuss your home needs and begin a wonderful journey to your new home together.
♥ Need to sell (or buy) your home outside of my local area? I am qualified to assist and refer you to solidly, qualified and reputable realtors nationwide.



Yes…I know my hair will always undergo change! That’s why I’d rather the ads show that I clean up well. My everyday look is the “Berni working hard for you” look… Are you smiling yet? I hope so! If you have a family member, friend or associate that would be seriously interested in any of my listings or any others, please call me with their name, phone and any other contact information. I will follow up with them and will thank you for adding another touch of jazz to my business.

Ciao for Now,

Berni

How To Create A Designer Kitchen

How do you create an attention-grabbing, designer kitchen on a reasonable budget? How do builders and remodelers design kitchens that sizzle? They've figured out the secret to creating kitchens that sell. They hire a kitchen designer! So, if builders think kitchen design is a smart idea, do you think it might be worth the investment?

Today's remodeled kitchen can easily cost $25,000 - $50,000 or more. If you are going make a sizeable investment upgrading your kitchen, you may want to allocate a portion of your budget to kitchen design. Why? Because a good designer comes up with great ideas. You pay for a trained eye to see what you can't see. A good designer suggests design elements that won't blow the budget. They know which details are relatively inexpensive, but add significant "punch" to your project.

Once you've budgeted money for design (generally 3-5%), now what do you do? Well, before looking for a kitchen designer, start thinking about what want in your kitchen. A kitchen designer will ask you what you have in mind so they can narrow the focus of your design. Is there a specific appliance that you want to make the focal point of your kitchen? Do you like exotic wood cabinets? Or do you just want a kitchen where everything coordinates and flows together?

Before you contact a kitchen designer, you may also want to visit a kitchen appliance dealer. A designer vent hood or an oversized range can serve as a great focal point for your new kitchen. Then you may want to start looking in design magazines, a great source for design ideas. Find the kitchen or the design elements you like in a magazine and simply replicate those ideas that appeal to you. Finally, after you've gathered some general ideas of what you want in your kitchen, start looking for a kitchen designer.

Where do you find a good kitchen designer? And once you've settled on a designer and come up with a design, how do you know what your design will cost to build? How do you avoid designing a kitchen you can't afford? Wouldn't it be helpful if you had some guidance throughout the design process to determine construction costs?

That's where a "design-build" firm can help. Design-build remodelers offer both design and construction services. When working with a design-build contractor, the designer creates the beauty (the floor plan, the cabinet elevations, the finished material selections, etc.) and the contractor creates the estimate. There's no more guesswork. When you hire a design-build contractor you know exactly what the design will cost.

Today, there are number of professional remodelers offering design services. Some design-build remodelers provide in-house design services. Other contractors outsource design to kitchen-designer, business partners. The best design-build contractors couple top design talent with professional construction services.

So how do you create a designer kitchen? Since they appreciate the value of good design, you may want to start by looking for a good design-build contractor. Check their work, check their trade associations, look at their project pictures and talk to their designers. A reputable design-build remodeler can be a valuable partner for creating your new designer kitchen!

Author Bio

Stephen Haver is the owner of design-build firm Update Construction, serving Houston, TX since 1992.

Berni's Comments: After having major remodeling done to my kitchen (and yes, I LOVE IT), I thought that this informative article will provide some wonderful insight for those of you who are up to the task. It is definitely NOT an undertaking for the faint of heart, but having lived through major remodeling, I can honestly say that it was worth it. Added bonus: increased appraised value to my home. UNEXPECTED & BEST BONUS: EVERYONE now gathers here. Always....It is the joy of our home....and definitely very, very jazzy!

By the way, if any of my clients desire, I will email pics of my kitchen.

Flipping Real Estate: Calculating Costs

If you been in the real estate investing business, or more specifically been flipping real estate, for more than a few days, you've inevitably gotten an email that reads something like this:"Investor's Dream. This property will go QUICK.

· Property Address: 1234 Main Street
· Asking Price: $100,000 (Add or subtract zeros!)
· After Repair Value: $150,000
· Repairs: $15,000
· Profit: $35,000
· Details: Needs paint, carpet, tile, new kitchen, update bathroom, some roof damage.
· Tenant occupied. Need to evict!"

STOP! Before you read on... Take a guess at what you think the "real" profit's going to be on this real estate investment...

If you haven't ever gotten an email or fax broadcast like this, then rest assured, you will! I'm about to probably tick off all of the late night infomercials and pitchmen out there! Sure, I understand that when you've got 30 minutes (or 90 minutes, for that matter), that you've to sell what's sexy... not what's real!

Now it's my turn to expose the real deal on real estate investing! This goes for flipping real estate itself (i.e. properties) or simply flipping the contract (also known as assigning the contract). When you're flipping real estate, you need to be able to calculate the "real" bottom line and if your assigning the contract, you need to know your numbers so you don't get blacklisted from investors! This one piece of information will keep you from getting into trouble because of any "real estate bubble"!

Purchase Costs

Here goes... Have you EVER purchased and sold a piece of real estate for FREE? If you're not sure what the answer is... It's an emphatic NO... You are going to have costs to buy, costs to hold and costs to sell. This holds true even if you are buying a property for all cash. (Think title fees, attorney's fees, recording fees, etc.)

If you're not getting a mortgage, your purchase costs are obviously much lower, but nonetheless, there are costs associated with any real estate transaction. Plus, more than likely, if you're relatively new, you're probably not paying all cash for property anyways. You're probably going to be using a hard money investor for your initial real estate investing financing!

For a quick calculation, you can estimate anywhere between 3% - 5% for closing costs to just acquire the property. That's 3%-5% of the purchase price.

Holding Costs

How much is it going to cost you each and every day to own this piece of real estate? See, if you're making money in real estate, you'd better believe that there are a lot of other people that are going to expect to get paid and they get paid in the form of mortgage interest, property taxes, utilities, property insurance, etc. Each of these is an expense each and every day that you own the property. Here's an example... A hard money loan on a bread and butter type piece of real estate might run you 15%. Let's say you got the property for $100,000. Every month, you are paying $1250 in interest alone. Let's say that taxes and insurance are another $200/month and then utilities at $100. Right there, the property is costing you $1550/month - or roughly $50/day. See, why it's important to know your not only your holding costs on a real estate investment, but also how long it's going to be on the market before you can flip the property.

Selling Costs

Here's the third part of the real estate investing puzzle. When you want to turn around and sell this piece of real estate, it's going to cost you yet again. The real estate broker commission is usually 4-5-6% or sometimes more. Then, you can figure 1-2% in closing fees.

If you can remember this... and apply what you've just learned to each and every real estate deal that you do, you'll be safe flipping real estate in any market. You see, if it's a hot market, you can calculate less time for holding cost. But, in a slower market, make your offer based on 6 months or 9 months of holding costs. It's really simple math! And real estate really is a numbers game...

Author Bio

Heather Seitz, the co-creator of Fixing and Flipping software, takes the guesswork out of estimating repairs.

Berni’s Comment: I’ve been working with a few investors lately and thought this might be useful to those who are relatively new to investing.

Fixing and Flipping isn’t very jazzy, but if you get a great deal you’ll be singing some jazz all the way to the bank!