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Flipping: Not as Easy as it Looks on TV

As the final part of our cautionary morning tale of real estate investing, the Home section of the NYPost pours cold water on our dream of making a killing by buying and flipping apartments:

Don't forget transaction costs. Say a property costs $2.178 million, and sells for $2.5 million. You've cleared $322,000, right?

Not so fast. You'll have to pay the city and state transfer tax of 1.825 percent, the closing costs of 2 percent and the brokers' commission of some 6 percent for reselling the property. That blows through nearly a quarter-mill right there. Then there's the cost of attorneys for both buying and selling, maybe $5,000, and you have a mortgage recording tax of 2.75 percent (in this case, $48,000). The end result: You've made less than $20,000.

Almost enough to fix that caved-in ceiling!
· Top Broker Shows You Five Hidden Pitfalls [NYPost]