Realtors! What are they doing to Us?

[machine]

I Just recieved a mailer from a Real Estate Agency, I thought I would share it with you guys. Here is the article it is directed to homeowners.

Hiring Contractors....
Anytime you think about home improvement, there are a number of details to be considered. There is an element of risk when hiring a contractor to perform work for you. The following are steps you take to protect yourself:

1) Check references by looking at the contractor's work yourself.

2) Ask for copies of current worker's compensation and liability insurance policies.

3) Never put more than 10% down to bind a contract.

4) Ask for copies of building, plumbing, heating, and electric permits, as required.

5) For larger jobs, list several stages in the job when payment will be made. Define what percentage of the job each represents and pay only that amount when all work associated with taht stage is successfully completed.

6) Withhold 10% at each stage, reserving those sums for a final payment. Release these funds only when the job is 100% complete.

7) If the contractor is of limited financial means, arrange to pay for significant materials(including concrete, roofing, replacement windows, and deck materials) yourself. This relieves the contractor of financial burden and protects you form a lien by the supplier if the contractor does not pay him. Note that your desire to pay for materials yourself could be embarrassing for your contractor. You might stress that you are interested in buying the contractor's trade skills, not purchasing skills.

[Scraper]

Honesty...I see nothing anti-LCO in there. Those are actually good points. If the job is done correctly then full payment is made.

I really like #2 as it will weed out the scrubs and allow the "professional" contractors to get the work they deserve!!!

[machine]

Now for my rebutal:

As a contractor, I have no problem with 1, 2, 4 and 5.

As for 3, I will set the percentage for any down payment not the client. That will start us off on the wrong foot.

As for 6, whithholding any money from us during stages of the contract will delay progress or stop it entirely. That is enough for me to quit, because I forsee problems of getting payed the full amount.

And for 7, Any homeowner that is going buy the matieral for you and not going to consult you about your preferences for products is stupid. As a contractor we have better access and more knowelege of commerial products we like to use. When a homeowner buys materials he pays more money for lower quality products. My name is on that project and I will not use inferior materials. I want the job done right.

That is why I do not work for Realtors, they have money one day but no money on the other days.

I hope my cleints dont take this mailer seriously, because I will tell them to go to hell, I have more hassel free work than they realize. A word to the wise, take care of your contractor, and he will do the same. Easy going on the work site, is much appreacited, so I will go the extra mile.

[Scraper]

Machine: What real estate agency sent this? Was it a big one like Prudential or Century 21? Just wondering if I might expect to see something similar out this way.

P.S. Your rebuttal points make sense, but I see 10% as really not that much and if you are not of "limited financial means" then there isn't a problem with #7. And actually I believe this is more directed towards construction/home improvement contractors as opposed to us.

[chrisbolte]

The are trying to protect the homeowner from getting screwed. Truthfully if you are upfront with you plans wih a customer you wont have any problems.

[Runner]

I don't think this applies to us as much, because our customers see exactly what they are getting, nothing to hide. This is opposed to roofers, plumbers, electricians, and especially all those "handyman guys" that like to target older people, ESPECIALLY with "roof repair." I've heard stories that just infuriated me. We had a guy from Dtroit running around here putting black paint mixed with oil on driveways, and charging 6 to 7 hundred dollars for it. A normal SEAL job only goes for about 150 bucks around here.

[machine]

Scraper, Did You get the name by scraping sheet metal. The mailer was from Sibcy Cline.
As far as, requiring a down payment. Why not, the clients I deal with are more than willing to give me money to start, so I have always required a down payment ussually 20%-30% to cover material cost.

One part of business is to manage Cash Flow. So take for example a $35,000 installation not less than a month to complete. I get 10,600(tax included) up front a week or two before I start. $10,600 for phase 2 is due the 2nd week after the start and $15,900 at the completion.

That down payment of $10,600 is immediately deposited with my broker which he will match 70/30 in margin. So that 10,600 gives me $18,020 worth of buying power to be invested in secruities yeilding 20%-30% monthly.
That means that down payment is making money while I am working on the job. The purchase of matierals is payed on credit with a 90 day float.

At the end of the month the job has been completed and I should recieve the $15,900 in a couple of days. but look what happen to the intial down pmt and phase 2 deposit.

+ 18,020(in my account 44 days with a 38% return)= 24868
+ 18,020(in my account 30 days with a 23% return)= 22165
- Margin expense and commisons 15619

Total Down payment and one installment recieved = 31414

I know have $31,414 in my account and I am yet to recieve payment of $15,900 and pay for the matierals.

90 Days later:

+53404(31414+magin, 90days @ 62% return) = 86514.48
+27030(15,900+margin,80days @46% return) = 39463.38
-Payment for Material ( 75 days 0% ) = 12605.00
-Payment for labor on project = 6400.00
-margin expense & commisons = 35240.00

Total Profit for a $35,000 project = 71732.86

That is why is so important to get money up front and get paid on time. I hope you see the opportunity cost here.

[Mr.Ziffel]

Machine, I'd certainly be interested in knowing where you're getting a 62% return on your investment for 90 days. Even a hint would be appreciated. Thanks.
Will M.

[machine]

Will M.
Stock & Options Strategies is your answer. Few people are aware of the kind of returns that are possible because they are heavy influenced by the media telling them 10-15% per year is great. Contrary to popular beleif, investing short-term is the way this is achieved. Like business, goals are set for each month not how much reveune I will take in a year. It is all about making your money work for you.

One thing I hate, is some people will tell me that options are risky. They don't know what they are talking about because the use of options with stock can eliminate risk and lock in a guaranteed gain. If you are Interested in making larger returns look into the use of NAKED PUTS.

[geogunn]

realtors use the type of marketing game mentioned in the mailer to gain the confidence of their customer. they portray themselves to be the customers friend which in reality may or not be the case.

when I do a job it is on written proposal with terms specified and signed by both. it's a binding contract.

no way am I going to accept a 10% shortage on a partial payment due.

I had a cat try to starve me out when I was building swiming pools. the cement pond turned pretty green by that july and the frogs had a good time with the skeeters.

when one party to an agreement welches on the deal, neither parties come out ahead (usually).

GEO

[Runner]

Machine, I would LOVE to know where I could invest and get a 38% return in 44 days. Or a 23% return in 30 days. If you can show me ONE, (that actually works, and is consistent,) I would be forever grateful, for I would have thew ULTIMATE investment knowledge. I could make myself a millionaire.

[machine]

Runner, I have many strategies I use, different ones for different situtations. I would charge a large amount money, to give my serects away. I am in no way a CFP to advise you. By engaging in these types of tranactions, involues risk and possible loss of money. (Just had to put that in there)

So you don't think I am full of S**T, I will show you one of the plays I have been working. It is called ROLLING STOCK, I find a stock that has large volume(100,000 shares or greater), trades in range of support and resistance and I move in out of it, by buying low and selling high. The past couple of Days I have done this wih RAZF Thurs-Mon(3 Days so far) Bought 1,000shs @ 4.875 sold 1,000shs @ 5.000. that is 125$ gain. But guess how many times I moved in and out(Called Rolling or Flipping), in that 3 days. I flipped 10 times and made a gain of $1250; there is your 25.6% return in 3 days. I don't believe in annualized returns, but I will annualize that for you any way: 3200%.

This is all possible but requires people to change thier investing habits. It is like trying to wake up on a different side of the bed. Will you do it and how long will you stick with it?

[machine]

One more thing Runner, who wants to be a millionaire when you can be a Billionaire. Too many people are already millionaires. Think about it.

[Barkleymut]

Machine, I don't doubt that you can achieve those types of return. It is possible from time to time. BUT; why in the heck are you still mowing lawns if you are able to achieve these types of results in the market?

[Likestomow]

Yes, it can be done. For me to make that kind of dough I had to sit in front of my computer almost the whole day, staying glued to the screen. I was nervous and on edge the whole time. There were plenty of highs, and some lows, but there was tons of stress wondering when to do what. The more I traded, the more I felt I had to trade so I didn't miss another big opportunity. That's a formula for failure - making too many trades in a day. By evening I was wound up tight and itching for the next morning to come so I could start over. But in time I got burned out because it takes too much emotional capital (for me anyway) to be that involved with the market (analysis) to profit. Mowing grass pays less, but at least it's peaceful and your body gets a workout.

[65hoss]

One of two things are involved here. Either you are reading the brochure for day trading or you haven't done it long enough to lose everything. For everyone 1 person that makes money at this game, thousands lose money. If it was that easy, don't you think that the money mgrs that manage billions everyday would be doing this. Wouldn't it look real good to include in their prospectus that they had a 3200% return for the year? Market timing is like playing the slot MACHINES (pun intended). Very addictive, but long term you lose!

[geogunn]

Originally posted by machine
Will M.

One thing I hate, is some people will tell me that options are risky. They don't know what they are talking about because the use of options with stock can eliminate risk and lock in a guaranteed gain.

and in in a later post machine said:

By engaging in these types of tranactions, involues risk and possible loss of money. (Just had to put that in there)




well mr. machine, for those of us that bumped off of the turnip wagon yesterday, which way is it?

GEO

[machine]

65hoss, You sound like a critical thinker, I hope you don't believe everything these mutual fund companies tell you. Last year the top 5 fund managers were paid above 10 million each. Thats where your money went. I like how they post thier results as returns. Invest a 1$ it grows to 2$ the frist year the second year it is down to a $1 again, and they say that is 50% annual return. Which is correct and legal.

Barkleymut,
As far as bieng in the green industry, there is nothing more relaxing and unstressful than cutting grass and building landscapes for people that enjoy them. There is almost no brain work involued and I enjoy the job satifaition when I accomplish something that I can visualally appreaciate. I love to be oustide when the weather is good, but when the weather is bad I am inside making money in another Industry. I have two business which I opperate. They balance themselves out, one can be very stressfull and challenging to the mind the other is physically challenging and relaxing.

Geogunn,
I take a risk everyday when I walk out the door of my house. I could be hit by falling debis from the sky, or killed by a bus as I cross the street. But I still engage in this activity.

[geogunn]

machine--thanks for your response concerning the risk of getting conked on the head from falling debris.

you really cleared that one up for us.

GEO

[65hoss]

Not critical, just very knowledgable of the financial markets and investments. Got many years of experience in it. Not just my personal investments either. I know BS about this subject, because I have seen the results of this investment strategy. Had clients that would try market timing. They would do it more often when they would score a BIG one. Sure, one month or even year they would post big gains. Then, at some point it will go flat or even negative.

Its greed that makes someone buy and sell based on 25 cents. A well educated and prudent investor looks at the long term. Doesn't make decisions based on a 5 minute span. Don't call what you do investing, its call churning. There is a difference. Investing is using your head to prepare for the future and build wealth. Churning is just a type of gambling with your personal finances that will more often than not, in the long term, cost you dearly.

[machine]

Hay 65hoss, how can you go wrong with writing covered calls when you don't mind to be callout or writing naked puts when you don't mind to own the stock. Sure there is downside risk but most people are optimists(there is higher likehood that stocks will move higher than there is to move lower over time. Cash know, is better than the possiblity of cash later. Income gernateration is a different mentally, than the norm of captial appreacition. We just have different philosophies on life, business, and investments; nothing wrong with that.

[T.C.O.B.]

SHORT TERM CAPITOL GAINS TAX!

[machine]

TCOB, Individuals are limited to 3,000 tax deductable loss and can carry forward losses year to year. If you are concernd about Captial Gains tax, trade as a Corporation.
"Why cut grass with a 21" when you can cut with a 72"."