In the News

Local Houstonian Makes Good 
as Businessman and National 
Best-selling Author!

Steve Berges (right), a graduate of La Porte High School, receives a plaque with his son, Philip, after the pair earned their black belts in Karate.

 By SUE STOUT, Special to The Sun

Monday, April 28, 2008 1:57 PM CDT

Steve Berges has learned the great lesson of success: "The key to success and anything you are doing, like going to school, is your willingness to persevere and the diligence to apply yourself." A graduate of La Porte High School, Steve Berges is now a national best-selling real estate author and successful businessman.

With his headquarters located in Michigan, Berges owns Symphony Homes, the home of the original trade-in, trade-up program. The program allows you to trade in your existing home and purchase a newly renovated or newly constructed home.

Berges is the author of eight books, two with second editions, that explains to others how to use OPM, the 'other people's money,' method.

"Growing up as a kid, Monday was family night. We loved music and my sisters and mother would play the piano. I played the trombone through my freshman year and we would gather around the piano and sing", he said. "I really developed an appreciation for music."

Steve is an inspiration to his family and especially to his three sons. "My oldest son plays the trombone and we earned our black belts together in the martial arts style known as Tang Soo Do," he stated.

After graduating from high school, Berges entered the Air Force and served as a Crew Chief Flight Mechanic, primarily active at Pope Air Force Base in North Carolina. It was then that he bought his first home after being inspired by author Mark O. Haroldsen and his book, "How to Wake Up the Financial Genius Inside You."

While serving in the Air Force, Steve took real estate classes, earned his broker's license and worked part time for Century 21. He was 21-years-old.

After being honorably discharged from the service, Berges entered Lee College and was awarded the Walter Rundell Scholarship for graduating first in his class in business management. He then went on to the University of Houston-Clear Lake and earned his bachelor's degree in finance, graduating cum laude, and later earned his MBA at Rice University.

While Berges was attending school, he began buying houses and developing rental property. A transition later caused him to focus on renovating apartment buildings and reselling them. Some of these buildings were located in the Houston area.

With his wife's family in Michigan, Berges made the move north and soon began writing about his real estate experiences. He has produced several inspirational CDs and also hosts a Saturday morning radio segment on WFBE 95.1 titled "It's a new day in real estate." The segment features upbeat and optimistic topics about getting through difficult times. He calls them "pearls of great price."

"There have been so many times in our life when we feel like throwing in the towel," Berges said. "But the willingness to stick it out and muscle through the challenges, and not succumb to adverse challenges, is the key. We must take those opportunities to strengthen ourselves. If we have the right attitude in the end, we will be triumphant and strong. It doesn't feel like it when you going through it, but in the end, the clouds will dissipate and the sun will shine again. At some point we will be better and be successful whether in school or business."

He credits his father for being the one who helped keep him spiritually grounded. His mother, he said, "inspired me to set my sights high and encouraged me to get an education." 

Builders bank on location

Ceremony marks opening of new Holly Twp. sub
Friday, October 19, 2007
By Matt Bach • 810.766.6330
Riverside North of Holly

What: A new subdivision developed by Silverman Development and Davison-based Symphony Homes.

Where: Off Grange Hall Road between N. Holly and Fish Lake roads in Holly Township.

Features: It has 84 lots. So far, six homes have been built.

Prices: From $150,000 to low $200,000s.

Details: (810) 658-3600 or


HOLLY TWP. - Steve Berges of Symphony Homes knows about the sluggish housing market, but he chooses to focus on the bright side of things. So there he was this week smiling as he and fellow members of Davison-based Symphony Homes officially celebrated the opening of their newest residential development - Riverside North of Holly in Holly Township.

"Instead of focusing on what's wrong with Michigan, we prefer to focus on what's right with Michigan," Berges said.

"Our outlook of the local economy is perhaps much more favorable than that of others."

Berges sees the many home for sale signs throughout the area, but he also sees the new $600-million McLaren Health Care Village at Clarkston currently under construction at Sashabaw Road and Bow Pointe Drive.

He said that project is expected to create 3,000 to 4,000 new jobs. That project is just 10 to 15 minutes south of Riverside North and it should have a positive impact on the area and the subdivision.

"Surely we will be well positioned to capitalize on that expansion," Berges said.

The company had a ribbon cutting ceremony this week at Riverside North. The site has 84 lots that will be available. Completion is expected to take three to five years.

The project is being done in conjunction with Silverman Development, said Berges, Chief Financial Officer for Symphony Homes and Preferred Mortgage.

Construction started in April on the first new home and the company has sold five out of six new homes that have been built there. The sixth home is the company's model, the Symphony 1482, Berges said.

He said company officials are optimistic about making the project a success despite the area economy for several reasons. Those reasons include a good location five minutes west of I-75 off exit 101 and 10 minutes east of US-23; affordable price range starting from $150,000; professionally developed community by Silverman with wooded home sites available; low Holly area tax millage rate; close proximity to major employers, shopping, recreation; and an excellent school system with low student/teacher ratio and a new high school.

"The only thing holding many of these families back from purchasing a new home is the need to sell their existing house," Berges said.

To address that concern, Symphony Homes has created a trade-in, trade-up program where Symphony will either sell or buy a person's existing home in exchange for them buying a Symphony home.

Symphony Homes was founded in 2001 by Berges, who has over 25 years in the real estate industry and has built the company into one of southeast Michigan's fastest growing new-home builders. The company has grown from zero sales in 2001 to a projected $10 million-plus in sales this year, according to company officials.

The company has more than 30 employees today.

Symphony Homes has other developments in Burton, Clarkston, Davison, Goodrich, Grand Blanc and Lake Orion.


Work on subdivision to start in summer

Development will feature upscale homes, condos



Sunday, June 04, 2006        

By Jerry Ernst

COMMUNITY STAFF WRITER                    

DAVISON TWP. - Mains will take the place of reins, and utility cables will replace stables on the former grounds of an equestrian center east of Davison.

Construction of a subdivision called Summerwood is expected to start in midsummer, said officials at Davison-based Symphony Homes, developer of the 70 acres north of Davison Road.

Symphony Homes, a Real Estate One affiliate, will eventually build 70 mostly upscale homes and 106 condos a mile east of M-15, said Jen Bongiovanni, manager of marketing and inside sales for the 5-year-old company.

Symphony has received approval for its plans and is awaiting only permits for utilities, said owner Steve Berges of Lake Orion. He expects to receive those by June.

Berges said Summerwood homes will resemble those in Laurel Heights, another Symphony subdivision. Laurel Heights, in north Davison, opened for business about six years ago and is within three houses of completing its 60-home first phase, he said.

Black Creek, a pond and a Colorado blue spruce tree farm lie within the Summerwood acreage. A 34,000-square-foot equestrian center in the back of the property probably will be converted into a community center, Berges said.

Parcels will be one-quarter to two-thirds of an acre and be served by municipal water and sewer service, natural gas lines and cable television, Berges said.

The first phase of construction will be condos, nearly all built as fourplexes and priced from $148,000 for a 1,275-square-foot unit to $198,000 for a 1,815-square-foot unit.

The second phase will be construction of up to 30 luxury homes of 3,200 to 4,800 square feet, ranging in cost from more than $400,000 to more than $700,000.

Another 40 homes priced between $216,000 for a 1,715-square-foot ranch and $288,000 for a 2,707-square-foot, two-story house are to be built during both phases, Berges said.

Purchase prices include lots and landscaping.

Berges expects two-thirds of buyers to come from within a 25-mile radius. The condos will cater more to retirees and families, he said, while young couples to families are likely to be drawn to the less expensive homes.

Symphony Homes has built six subdivisions: Wakefield Woods in northeast Grand Blanc Township, Goodrich Meadows in Goodrich, Park Island in Lake Orion and Hawkshire Estates and Pine Creek Estates, both in Burton.

Another one is in the works in west Genesee Township, Bongiovanni said. Development of Summer Breeze is expected to begin this fall on the southwest corner of Carpenter and Belsay roads, she said. Its 80 single-family homes will be like those in Summerwood, excluding the most expensive of the Summerwood houses.

More details: (810) 658-3000 or

*** • 810.766.6197

©2006 Flint Journal

Robert Bruss: Book reveals little-known foreclosure facts

By ROBERT J. BRUSS, Inman News Features
January 1, 2006

Copyright © 2006, Naples Daily News, Naples, FL

The Complete Guide to Investing in Foreclosures," by Steve Berges (AMACOM-American Management Association, New York), 2006, $17.95; 184 pages; Available in stock or by special order at local bookstores, public libraries, and

"The Complete Guide to Investing in Foreclosures" by Steve Berges is not just another book about how to buy and profit from foreclosure properties. This one is different because it reveals important but little known foreclosure facts, such as how to locate and buy FHA-HUD foreclosures in virtually any county, how to invest in and finance VA foreclosures, and how to estimate the profit potential for each foreclosure purchase.

Author Steve Berges is owner of a home building firm which both builds new houses and renovates foreclosure properties. He strives to earn at least a 20 percent profit on each foreclosure house his firm acquires, so he emphasizes both buying at the right price and then reselling with an adequate profit. His goal is to buy, renovate and resell 35 to 40 foreclosures per year.

The book begins by explaining the opportunities and the possible pitfalls of acquiring houses in the foreclosure process. According to the Mortgage Bankers Association, approximately 4 percent of all home loans are delinquent and about 1.1 percent of mortgages are in the foreclosure legal process. Another way of looking at the situation, the author explains, is one out of every 22 home loans is delinquent.

Berges says this creates plenty of opportunities for those willing to learn foreclosure procedures and, depending on each defaulting homeowner's situation, the best time to buy houses. The book is unique because the author explains the best way to acquire foreclosure and distress property profitably is often by taking title "subject to" its existing mortgage, renovating the house, and then either refinancing or selling.

Heavy emphasis is placed on understanding both the judicial and non-judicial foreclosure procedures, depending on which is used in the reader's state. A chart shows whether mortgages or deeds of trust are predominantly used in each state.

The author explains the pros and cons of purchasing foreclosures at each step during the procedure. He recommends never leasing the house back to the seller. "Instead, give sellers the boot," Berges advises.

After explaining the four foreclosure procedure opportunities, the book shifts to very specific details of acquiring FHA-HUD foreclosures, VA repos, Fannie Mae and Freddie Mac defaults, and conventional foreclosures.

Berges explains acquiring title subject to an existing mortgage is not illegal (as some uninformed real estate writers say) but it can be a breach of contract with the seller if the buyer defaults. A unique technique I have not seen elsewhere is the "double lease option" to conserve the investor's cash.

However, the book is not perfect. The publisher should have edited more carefully to break up the extremely long paragraphs which make very difficult reading. Shorter paragraphs would have made for much easier understanding of the author's excellent but sometimes detailed explanations.

The book has another fault. It is too short. The author obviously must have many personal examples he could have inserted throughout the book to illustrate his topics, such as acquiring "subject to" an existing mortgage and how both he and the seller benefited by curing the foreclosure and repairing the seller's credit. At the end of the book, there are a few examples, but not nearly enough to break up the sometimes boring explanations in those huge long paragraphs.

If you are serious about acquiring profitable foreclosure properties, this book is required reading because it offers details not found in most other foreclosure books. Although it can be difficult reading, due to the bad editing and long paragraphs, the book's superb content triumphs and, on my scale of one to 10, earns a solid 10.

Copyright © 2005, Naples Daily News, Naples, FL

The pros and cons of investing in foreclosure properties

Robert Bruss, Inman News
Published December 30, 2005

Copyright © 2005, Chicago Tribune

A few days ago, while cleaning out a file cabinet, I found a copy of my book "How to Earn Big Profits from Foreclosure and Distress Properties," which I wrote in 1992. It has been out of print for years, so don't try to buy it. As I glanced over the book, I was shocked at how much has changed since then and how much easier it is today to find and profit from foreclosures.

Although the basic foreclosure procedures remain virtually unchanged, thanks mostly to the Internet, it has become much easier today to find and profitably acquire foreclosed properties.

While recently reading an excellent new book on this topic, "The Complete Guide to Investing in Foreclosures" by Steve Berges ($17.95, AMACOM), I learned approximately 1 out of 22 houses is in the foreclosure process. As I drove down the street yesterday, when I counted 22 houses, I asked myself, "Which of these owners is behind in their mortgage payments?"

Of course, not every house or condominium that enters the foreclosure process goes to a lender's foreclosure sale. Especially in the last few years, thanks to a robust real estate market in most communities, the majority of houses were either sold or refinanced to prevent foreclosure losses.

However, as mortgage interest rates slowly rise, and fewer buyers can qualify for new mortgages, the number of home foreclosures is expected to rise in 2006. But good times or bad, there are always foreclosures. Somebody profits from every foreclosure sale, and it might as well be you.

Foreclosures happen in all neighborhoods, ranging from the very best to the very worst areas. Personally, I've acquired properties in all stages of foreclosure, usually with little out of pocket cash.

The start of a foreclosure occurs when a borrower fails to make their monthly mortgage payments for one or two months. After 45 days or so, if the borrower doesn't respond to the lender's default letters, most lenders begin the foreclosure process.

Although some borrowers stall their home loan lenders, most realize failure to reinstate the loan can be a costly mistake. Here are the three basic foreclosure steps, and the bargain-buying opportunities:

1. The lender records a lis pendens lawsuit or notice of default. The lis pendens lawsuit is used if a mortgage is involved, whereas a notice of default is recorded when the lender's security instrument is a deed of trust. The lis pendens lawsuit often results in a judicial sale of the property. But a notice of default can result in a non-judicial trustee's sale.

However, the borrower usually has three to six months to cure their loan default and reinstate it before the property goes to a foreclosure auction. This reinstatement period creates the first opportunity for a home buyer or an investor to contact the defaulting owner to see if the property can be purchased, often at a bargain price for a quick sale. Some defaulting homeowners are willing to sell for just a few thousand dollars of their equity so they can "move on" with their lives.

Because time is of the essence, foreclosure buyers during this reinstatement period usually purchase "subject to" all existing liens, such as a second mortgage, mechanics' lien, property tax lien, judgment lien and IRS income tax lien. A purchase during this "pre-foreclosure period" enables the buyer to obtain title insurance so there are no title surprises.

2. The foreclosure auction. Frequently, a property is "over-encumbered" with total mortgages and liens that exceed the property's market value. In that situation, it doesn't pay to buy during the pre-foreclosure reinstatement period because the defaulting borrower has little or no equity.

In that situation, if the borrower doesn't cure their default, the best time to buy may be at the foreclosure auction. The big advantage is most junior liens recorded after the obligation that is being foreclosed are wiped out by the foreclosure sale.

However, unpaid property taxes and IRS income tax liens are not wiped out.

Disadvantages of buying at the foreclosure auction include a) no opportunity to inspect the property interior, b) there's competition from other bidders; and c) cash (or cashier's checks) are required.

3. After the auction, if the title goes to the foreclosing lender. As frequently happens, no bidders show up at the foreclosure sale. The title then goes to the foreclosing lender.

Institutional lenders then call it REO (real estate owned) property, which they usually want to unload quickly, sometimes at a bargain price to mitigate the lender's loss.

My personal technique for buying REO property from lenders is to immediately send a FedEx overnight letter after the foreclosure auction to the lender's president with an offer to buy the foreclosed property. I enclose a substantial deposit check to show my sincerity. Although my FedEx letter has never reached the lender's president, it does get to the REO or appropriate department.

In many cities and counties, there are local legal and private subscription newspaper lists of foreclosures. Many of these lists now are available on the Internet.

Copyright © 2005, Chicago Tribune

Bob Bruss Columns - Inman News

The 10 best real estate books of 2005

By Bob Bruss

December 09, 2005

At the end of each year, it is my honor to select the 10 best real estate books out of the hundreds of realty books published that year. This article takes 52 weeks to prepare because I read at least one real estate book every week. These are the best of the best 2005 real estate books!

Selecting the top real estate books of 2005 was especially difficult because an unusually large number of new realty books were published this year. All these excellent real estate books are available in stock or by special order at local bookstores, public libraries, and Here, in no special order, are the 10 best real estate books of 2005, plus several honorable mentions:

1.) "Reverse Mortgages for Dummies," by Sarah Glendon Lyons and John E. Lucas (Wiley Publishing, Inc., Hoboken, NJ), $16.99, 249 pages. This is the best of several excellent 2005 books about the pros and cons of tax-free reverse mortgage income for senior citizen homeowners 62 or older. Especially valuable are the details about the three major reverse mortgage types, the advantages of each, their costs, and when obtaining a reverse mortgage is not a smart decision.

Purchase Bob Bruss reports online.

2.) "Building Wealth One House at a Time," by John W. Schaub (McGraw-Hill, New York), $18.95, 225 pages. Written by a very successful 32-year investor in single-family rental houses, this book reveals why investing in local houses is the safest long-term realty investment. The author explains how he buys without obtaining bank mortgages and how to select profitable houses that will attract quality tenants.

3.) "Start Small, Profit Big in Real Estate," by Jay P. DeCima (McGraw-Hill, New York), $19.95, 216 pages. The theme of this book is investing in run-down residential groups of rentals, such as five units, which are a management headache for the seller. The author recommends buying properties with fix-up profit potential that most lenders won't finance, thereby forcing the sellers to carry back mortgages on very attractive terms.

4.) "Trump Strategies for Real Estate: Billionaire Lessons for the Small Investor," by George H. Ross (John Wiley and Sons, Hoboken, NJ), $24.95, 221 pages. The author has been a successful New York real estate attorney, representing famous investors such as Harry Helmsley, Sam LeFrak, Bill Zeckendorf, and for the last 25 years, Donald Trump. The book is mostly about how Trump became wealthy thanks to his real estate strategies, but the author also shares first-hand insider stories and how he came to realize every problem has a price tag for its solution. This superb book should be required reading for every serious real estate investor.

5.) "Real Estate Dealmaking," by George F. Donohue (Dearborn-Kaplan Publishing Co., Chicago), $19.95, 177 pages. Written by the president of the nation's oldest real estate company (established 1866), this unique book explains winning real estate negotiation strategies for dealing with buyers, sellers, contractors, property managers, lawyers, and brokers. In this book, which cannot be recommended too highly, the author includes personal examples from his many years of worldwide real estate negotiations. He even shares a few of his negotiation mistakes.

6.) "What No One Ever Tells You About Investing in Real Estate," by Robert J. Hill II, Esq. (Dearborn-Kaplan Publishing Co., Chicago), $18.95, 200 pages. This is the most unusual real estate book of 2005 because it is a collection of 112 mini-chapters about real estate investor personal experiences and the valuable lessons to be learned from them. Many of these true stores will make you laugh. Others will make you cry. Compiled by a Nashville real estate attorney and investor, these real-life stories show investor mistakes to avoid and how to take advantage of profit opportunities.

7.) "The Pre-Foreclosure Property Investor's Kit," by Thomas J. Lucier (John Wiley and Sons, Hoboken, NJ), $19.95, 249 pages. This ultra-complete book reveals virtually everything necessary to profitably acquire foreclosure distress properties without making costly mistakes. The author includes the forms he uses when acquiring foreclosures, along with details of how he uses the Internet to locate distressed owners, find property records, search state foreclosure statutes and timetables, plus many other valuable websites, mostly free. Especially valuable, the author shares many personal experiences in this "how to buy foreclosures" book.

8.) "Profit by Investing in Real Estate Tax Liens," by Larry B. Loftis, Esq. (Dearborn-Kaplan Publishing Co., Chicago), $19.95, 235 pages. For those who are interested in real estate profits but don't want to actually own property, which requires management, this detailed book reveals how to profit by investing in tax liens, just as major banks do, with safety and risk avoidance. The author not only explains the procedures in every state offering tax lien sales, but he shares many personal experiences of his bidding for these high-yield safe investments.

9.) "What No One Ever Tells You About Renovating Your Home," by Alan J. Heavens (Dearborn-Kaplan Publishing Co., Chicago), $18.95, 208 pages. In a likeable, self-deprecating way, the author shares his many personal home renovation experiences, as well as those of homeowners he interviewed. Emphasis is placed on when it's best to hire professional contractors, and when to do the work yourself. "Never spend money if it won't boost your property value," is the book's theme.

10.) "Every Landlord's Tax Deduction Guide," by Stephen Fishman, Esq. (Nolo Press, Berkeley, CA), $34.99, 250 pages. This unusual book makes tax tactics actually interesting, whether you are a novice or a serious full-time investor. The author uses many lively examples and charts to make potentially boring topics understandable and interesting. The book heavily emphasizes maximizing depreciation deductions.


11.) "Profit from Your Vacation Home Dream," Christine Hrib Karpinski (Dearborn-Kaplan Publishing Co., Chicago), $19.95, 212 pages. If you own or are thinking about buying a second or vacation home, this book shows how to make such property a profitable investment and how to wisely rent it during the times you aren't personally using it. The author, who specializes in vacation home sales and rentals, shows with many examples what to look for when buying and how to successfully manage rentals from long distances.

12.) "Real Estate Investing for Dummies," by Robert S. Griswold and Eric Tyson (Wiley Publishing Inc., Hoboken, NJ) $21.99, 332 pages. Both beginner and experienced real estate investors will profit from studying all the aspects to consider when maximizing property profits. Virtually every property investment ownership topic is explained, such as how to hold title, improving cash flow, avoiding problems, and even "exit strategies" when it's time to take sales profits.

13.) "The Complete Guide to Investing in Undervalued Properties," by Steve Berges (McGraw-Hill, New York), $19.95, 201 pages. The author, an experienced real estate investor, reveals how to find under-priced properties and how to profitably acquire them either for long-term investment or resale profits. Emphasis is placed on "how you can help distressed lenders" by acquiring their foreclosed properties. The author recommends special techniques, such as paying rewards to "scouts" and using high-leverage techniques to minimize cash investments.

14.) "Tips and Traps for Remodeling Your Kitchen," By R. Dodge Woodson (McGraw-Hill, New York), $16.95, 202 pages. The author, a professional contractor for over 30 years, explains how to remodel your kitchen and survive by anticipating and avoiding potential problems which he has encountered many times. The book places heavy emphasis on "insider information" for saving money and avoiding rip-offs by bad contractors.

15.) "21 Things Every Home Inspector Should Know," by Frank Cook and Pat Remick (Dearborn-Kaplan Publishing Co., Chicago), $24.95, 200 pages. This is really a detailed "how to become a successful professional home inspector" book with a very realistic view of the work involved. The authors emphasize that the opportunity magazine "earn $1,000 per day inspecting homes" ads really aren't true. Then they share what is necessary to create a profitable home inspection business.

(For more information on Bob Bruss publications, visit his
Real Estate Center

Copyright 2005 Inman News


Real Estate Articles from Inman News

Diary of a Real Estate Flipper

Flipper talks to rehab expert Steve Berges

Friday, October 14, 2005
By Alison Rogers

Like most people who work at desks for a living, my husband is slightly suspicious of my new freelance lifestyle. He called me the other day – a day when I was supposed to be looking at houses – and he heard the TV on in the background. "What are you doing, hon?" he asked.

"I'm watching 'Flip This House,'" I replied. "It's research."

Perhaps a result of the 72 straight hours of kidding I had to endure about that, I thought I'd do some nose-to-the-grindstone work: I put down the remote and picked up the telephone.

The nice guy at the other end was Steve Berges, a principal at Real Estate One Symphony Homes, and a builder/rehabber/investor extraordinaire. Steve has been investing and writing about it for 25 years; I had read his "101 Cost Effective Ways to Increase the Value of your Home" (Dearborn) and thought it was one of the best "bang for your buck" books I'd ever read. So I thought I'd ask him what does (and doesn't) work.

The amazing thing? He told me. Here are the highlights:

  • COMPS, COMPS, COMPS: You want to spiff up a house, without over improving for the neighborhood (or the buyer). This is where your neighborhood tours come in. "Be consistent with what the market expects," said Steve. "In less expensive houses, where there's vinyl flooring in the kitchen and bath in comparable houses, you don't want to spend the money on tile and marble. In a more expensive house, though, that's what buyers expect." Remember your buyer probably has a list of 10 houses, so you want your house to look comparatively better than the other nine.

  • BRIGHT AND CHEERY: This is Steve's mantra. Paint the exterior of a house; take a navy-blue bedroom and paint it off-white; and install new lighting. "A four-bulb fixture that's a foot-and-a-half wide by 4 feet long is $105 at the Home Depot," says Steve, "and it floods the kitchen with light." He's talking about one of the new fluorescents, which have the advantage of being energy-efficient too; in a more up-market kitchen you might think about incandescent or halogen task lighting.

  • CURB APPEAL: That buyer with the list of 10 houses? You have to get them to stop with yours. That means make your house look inviting by mowing the lawn, put in a nice-looking front-door (you don't have to get a $2,500 oak or walnut door," Steve says. "For a couple hundred dollars you can have a nice-looking front door." You may also want to paint your house – you can even paint vinyl siding, though it's tricky. If the house is really dirty, power wash it first – it's absolutely worth it -- and then give it a day or two to dry. Paint adheres best to a clean surface.

  • THE KITCHEN IS THE HEART OF THE HOUSE: I asked Steve "Kitchen or Bath? – what if you have a tired house and can only fix up one?" His response was that the family spends more time in the kitchen, so, besides lighting, it might deserve new cabinets ($1,500-$7,500) and new flooring. Those '70s houses with the purple, peach or turquoise tile? Again, he says that you need to look at other homes on the market. "You don't necessarily need to rip out all that stuff, as long as it's clean and shows well." If you're going to do just a little to the bath, buy it a new floor or a new sink/cabinet combo.

  • MAKE FRIENDS WITH A HANDYMAN: I mentioned the "Flip This House" episode I had watched – where the team gets blindsided by termites – and I was surprised they hadn't noticed any signs. This reminded Steve that "there's always something unexpected" but he suggests one way to limit your surprise quotient is to get a buddy who's handy to walk through with you and alert you to signs of trouble – pre-inspection. My two cents: I wouldn't even get to the inspection stage on a house with water spots or tilty stairs. Buyers can run a quick first check for termites by taking a screwdriver and poke at some of the wood in the house – near the furnace and hot-water heater are good places to start, because bugs like to be warm too.

Reviews by -- Deborah A. Ten Brink, President LLC Loan Network, Inc.

Great Foreclosure Resource!

If you're already a fan of this author, you'll appreciate our reference to this particular book. If you're not familiar with his work, let us introduce you to one of the most overlooked authors on real estate investing today! Steve promises to provide real estate investors with:


1) Secrets to finding great properties before they're public knowledge.
2) Foolproof strategies for buying at all stages of foreclosure.
3) 7 things you need to know before investing into any foreclosure.
4) Essential forms, worksheets and checklists.

Deborah, President of LLC Loan Network states, "He hasn't steered me wrong so far! At this price, why not place an order yourself today?"

The Complete Guide to Investing in Foreclosures (Paperback)


Steve Berges has done it again!

"Over time, he has become one of my favorite authors!" Deborah says. "Steve is from my home state, Michigan. He has over 25 years of experience, is an active investor, specializing in creating value through various real estate mechanisms. This is such a timely book as most of us are looking for this type of property. At this price, this book is a steal! Buy it now and get a jump on your competition!"

 The Complete Guide to Investing in Undervalued Properties (Paperback)

"To date, this is my absolute favorite Steve Berges book on financing your real estate investment property!"
-- Deborah A. Ten Brink, President LLC Loan Network, Inc.

This is my absolute all-around favorite Steve Berges title. If you are just starting out as a real estate investor, or if you're a seasoned residential investor, you have to purchase this book! He covers all areas of real estate investment:


1) Single-Family
2) Multi-Family
3) Commercial Properties
4) Proven, effective valuation techniques! Real case studies.
5) Future and present value analysis.
6) Measurements and ratios for investment performance, cap rates, and gross rent multiplier ratios!
7) Too much content to mention!

No "fluff" or "filler". Real strategies, real math. Steve tells it to you straight. Build your portfolio today!

The Complete Guide to Real Estate Finance for Investment Properties: How to Analyze Any Single-Family, Multifamily, or Commercial Property (Hardcover)







Restraint Pays if Prepping to Sell

BY Shannon Fromma; Albany Times Union - As published in the Detroit Free Press, June 12, 2005


Whether or not you plan to sell, smart home improvements can increase your home's equity, add resale value and, perhaps, lighten your future tax burden.

"It's all about finding out what your home value is," says Willie Miranda, president and CEO of Miranda Real Estate Group Inc. "A lot of people try to be in tune with it, because they want to know what they're worth."

But don't go gutting your kitchen or pouring that in-ground pool just yet. Not all upgrades and renovations will add as much value as you might assume, so it's important to research which improvements will best increase your bottom line.

According to one of the most widely watched annual surveys -- The Cost vs. Value Report produced by Remodeling magazine -- minor kitchen and mid-range bath remodels offer the best return (more than 90 percent of the cost can be recouped based on national averages in 2004), as does replacing your home's siding. Adding a sunroom or upscale master suite, however, may only net you about three-quarters of what you've spent, according to the survey.

"When we're working with buyers, and we're out in the field, they tell us they want upgraded kitchens, baths and finished basements," says Miranda. "There's been such a growth over the last five years, and with interest rates still low, people are able to buy more home (for the money)."

Adding more square footage by converting an attic or adding an addition, or opening up a room by knocking down a wall can also pay off, according to Steve Berges, author of "101 Cost Effective Ways to Increase the Value of Your Home." And increasing value doesn't necessarily mean decreasing your bank account.

"The most cost effective (improvements) tend to be cosmetic improvements," says Berges, whose mantra is "visibility adds value." "The more visible your home improvement is, the more value it will add to the home and the more you'll be able to sell it for," Berges adds.

The best place to start, says Berges, is outside. If the general exterior is unkempt, if there's trash or debris or an old boat outside, those types of things don't bode well for the house or neighborhood," Berges says. Your home has to be inviting from the outset, and you don't have to shell out a fortune to make it look sharp.

Clean up any junk, keep the grass mowed and trim any overgrown hedges or trees that may be obstructing your home. And if the exterior paint is starting to peel, slap on a new coat of light-colored paint. 'These things are low-cost, easy to do and just require a little elbow grease," says Berges. "It's all about creating more of a bright and cheery, not dark and dreary, look."

The same principles apply to the home's interior. Two-tone paint, decorative trim, classy kitchen cabinets and modern counter tops and appliances are things consumers can see, and thus be willing to pay for.

"Our experience has shown that while most consumers say that it is nice to have a foundation, for example, that was recently repaired, there not willing to pay more for it," says Berges. "You want it to be built solidly and you expect it to be, but at the same time, most don't know or care if a No. 2 or No. 3 grade stud is used." Same goes for a new septic system or plumbing. They won't raise your bottom line, so stick to more conspicuous, cost-effective upgrades, Berges says.

A fresh coat of paint and new lighting fixtures are easy, inexpensive ways to spruce up a home's interior, says Berges. And don't ignore the dust, dirt and mold that may have collected over the years. Believe it or not, a deep cleaning can translate into more cash in your pocket.

Whatever you do, don't go dumping your life's savings into your home if you plan to put it on the market soon, says Berges. It is possible to over-improve. "You want to conform to the neighborhood and the market you're in," Berges recommends. "If all the neighbors have the standard shingles for the roof, you don't want to put an expensive tile shingle on. You'll never recoup the cost." If you think a swimming pool will spark some interest in potential buyers, think again. It won't necessarily elicit more interest.

Even if selling isn't on your agenda just yet, home improvements you tackle now can pay off down the road if you do decide to sell. If the improvements you make qualify as "capital improvements," things that permanently enhance your home's value or prolong its life, you may be able to reduce possible capital gains taxes when you do decide to sell, according to the Internal Revenue Service (Publication 523). Erecting a fence, building a deck or replacing your roof all qualify.

Copyright © 2005 Detroit Free Press Inc.

Robert Bruss: New book reveals how to buy real estate below market value

By ROBERT J. BRUSS, Inman News Features
March 6, 2005

Copyright © 2005, Naples Daily News, Naples, FL

Whether you want to buy your next home at a bargain price or you want to acquire investment realty below market value, "The Complete Guide to Investing in Undervalued Properties" by Steve Berges shows the secrets of buying at wholesale prices. But don't be misled. It takes work to locate these under-priced bargains.

The author is a successful home builder who well-understands the real estate market whether he is acquiring land for his home construction firm, buying investment property or purchasing a personal residence. Berges reveals virtually all the potential sources and techniques for buying below market value.

But don't get discouraged by the slow start of this superior book. By the third chapter, the pace picks up. However, the publisher's antiquated format makes the reader almost fall asleep.

Thankfully, the author's excellent material keeps the reader awake, despite the sometimes page-long, poorly edited paragraphs. A top-quality graphics editor could do wonders for this book.

Throughout the book, Berges uses lots of personal examples from his many years of investing in real estate. Although his Michigan examples have far-below-market prices for most of the nation, typically $50,000 to $100,000 home purchase prices, readers in higher-priced areas should be prepared for this shock. But the principles explained are sound.

Especially valuable is the chapter about foreclosures titled "How You Can Help Distressed Lenders." As a buyer of real estate owned by foreclosing lenders, I never quite viewed my purchases like that.

But I like the author's viewpoint. He explains how to negotiate with foreclosing lenders who acquired title to properties and are usually very motivated to sell them at under market value.

Berges recommends repeatedly contacting at least 8 to 10 local lenders to establish a pool of potential foreclosed property purchases. "Another very effective method of locating post-foreclosure properties is through the network of real estate agents the lenders use to dispose of their properties," the author suggests.

The principle of understanding subjective value is heavily emphasized. Berges explains why relying on realty agents to determine market value of a property considered for purchase is not always wise unless several agents are consulted to compare their value estimates.

A special technique the author recommends is to hire "scouts" to help find bargain-priced properties. He recommends paying them a finder's fee, although he isn't specific on how much that fee should be.

Purchasing bargain-priced properties for little or no cash from the buyer's pocket is emphasized in the "High Leverage Techniques" chapter.

Aimed at buyers who want to quickly "flip" a property, such as by purchasing at a bargain-price, adding some fix-up work, and then selling for a quick profit, Berges explains the methods to use.

Although the author is a big advocate of options and lease-options, he doesn't get into much detail other than explaining the generalities.

Personally, as a heavy user of lease-options, I found his lease-option explanation a bit light on important techniques.

Although this book contains many generalities rather than specifics and the publisher's boring format makes for sometimes-difficult reading, the basic content is superior and well worth reading. The author's many examples add to the usefulness. Despite the drawbacks, on my scale of one to 10, this outstanding book rates a solid 10.







"The Complete Guide to Investing in Undervalued Properties," by Steve Berges (McGraw-Hill, New York), 2005, $19.95, 201 pages; Available in stock or by special order at local bookstores, public libraries, and

4 Ways to Boost Your Home's Value
by Marc Myers, Readers Digest February 2005

he strength of your house's structure can have a big impact on its value over time.  Halt the ravages of nature by taking these small steps now.

Find Problems Early: Every two or three years, have your house examined by a certified home inspector (see  or, says Steve Berges, a builder and author of 101 Cost Effective Ways to Increase the Value of Your Home.  This person inspects the roof and basement for leaks and structural damage, checks the foundation for termites and moisture, and tests heating, air conditioning, plumbing, and electrical systems.  An inspection costs about $400, but could save you thousands later.

Upgrade Regularly: Replace your roof about every 15 years (depending on type), paint the exterior every 5 years and review the gutter system every 6 months. "Tighten the screws connecting the gutters to the fascia board against the house and examine the boards for cracks and rot," Berges recommends.

Watch for Water: Moisture usually enters the home through cracks in the roof and foundation.  "During a heavy rain, go in your attic with a flashlight to check for leaks," Berges says.  If the basement is wet, the first step is hiring a certified waterproofing specialist ( to seal the cracks.

Change the Scenery: Cut back shrubs that touch the house.  They trap moisture and let bugs inside.  Consider hiring a certified arborist (try for tree pruning.  Doing it yourself could weaken trees, increasing the risk that limbs will fall on your roof during a storm.

The 10 best real estate books this year

by Robert Bruss January 2, 2005

The most difficult real estate article I write every year is this one because it takes a year to prepare. Each week I read at least one new real estate book and then write a book review. But at the end of the year, I must choose the 10 best.

The year 2004 had an oversupply of superb new realty books (and a few duds) on topics such as home-buying and selling, how to be a successful realty agent, and how to make huge profits investing in real estate. The theme of most of these books is "how to."

All of the following books are available in stock or by special order at local bookstores, public libraries, and Based on my 52 book reviews from the past year, in no particular order, here are the 10 best real estate books of 2004:

1. "How to Be a Quick Turn Real Estate Millionaire," by Ron LeGrand (Dearborn-Kaplan Publishing Co., Chicago), $21.95, 204 pages. Written by a very successful former auto mechanic turned real estate investor who has bought more than 1,500 houses for investment, and who has taught more than 300,000 real estate students, this Florida author shares his realty investment strategies.

2. "The New Complete Book of Home Buying," by Michael Sumichrast and Ronald G. Shafer, with Martin A. Sumichrast (McGraw-Hill, New York), $19.95, 234 pages. By far, this is the best "how to buy a home" book of 2004. Primarily written by the now-retired chief economist of the National Association of Home Builders, it is authoritative and occasionally even critical of home builders. But it is a very enjoyable and profitable read for home buyers. The book has facts, charts, graphs and checklists to help home buyers make smart decisions, delivered in an easy-read, sometimes humorous style.

3. "Quick Cash in Foreclosures," by Chantal Howell Carey and Bill Carey (John Wiley and Sons, Hoboken, N.J.), $19.95, 221 pages. This amazing investment book explains unique methods to profit from acquiring foreclosure properties. But this book isn't the old "buy and hold" approach. The authors explain the foreclosure opportunities and when each should be used, always considering the situation of the defaulting property owner.

4. "Trump: Think Like a Billionaire," by Donald J. Trump (Random House, New York), $21.95, 229 pages. Trump's latest book is light on specifics and heavy on generalities. But it is required reading for serious realty investors who want advice from a super-successful investor. The most important 50 percent of this book is about real estate; the other half is Trump's fun "fluff," which is made possible by his profitable real estate investments.

5. "How to Increase the Value of Your Home," by Vicki Lankarge and Daniel J. Nahorney (McGraw-Hill, New York), $14.95, 181 pages. This enlightening book explains which home improvements are most profitable and which might be enjoyable but won't add as much market value as they cost. The book is filled with facts, not just opinions, about profitable home improvements and those which are unprofitable.

6. "Retirement Places Rated, Sixth Edition," by David Savageau (Wiley Publishing Inc., Hoboken, N.J.), $23.99, 314 pages. Study very carefully before you decide to move to a retirement location is the theme of this fact-filled book, which can save retirees from making costly mistakes. It includes a 50-question test of retirement preferences, as well as fascinating sidebars, to help retirees avoid making hasty-decision errors. Retirees and their adult children should carefully study this great book.

7. "How to Sell Your Home Without a Broker," Fourth Edition, by Bill Carey, Chantal Howell Carey and Suzanne Kiffmann (John Wiley and Sons, Hoboken, N.J.), $19.95, 172 pages. Realty agents have nothing to fear from this "how to sell your home alone" book, which explains what is really involved with selling your home, getting top price, and avoiding lawsuits after the sale closes. This book provides fascinating reading for the "do it yourself" home seller crowd who think they can sell their own home without professional advice, the powerful Multiple Listing Service, and the Internet.

8. "The Millionaire Real Estate Agent," by Gary Keller (McGraw-Hill, New York) $19.95, 347 pages. There should be a law requiring every real estate agent licensee to study this book before being allowed to sell a property. The author is a co-founder of the nationwide Keller-Williams Realty chain. He uses lots of examples of his super-successful agents to emphasize the profit potential, as well as the pitfalls, of becoming a realty sales agent.

9. "Investing in Real Estate With Other People's Money," by Jack Cummings (McGraw-Hill, New York), $18.95, 360 pages. This book for very serious real estate investors has a title that is misleading. The book is not about investing money for other people, but rather about using borrowed money to invest in real estate with little or none of your own cash. That's called leverage. Cummings explains 43 no-down-payment methods to control property and the profits.

10. "The Mortgage Encyclopedia," by Jack Guttentag (McGraw-Hill, New York), $19.95, 250 pages. If you are a home buyer, homeowner, realty agent or mortgage lender who wants to know the "insider secrets" of the mortgage lending business, this is a "must read" to learn what mortgage lenders don't want borrowers to know. The author is clearly on the side of borrowers, as he warns about the dirty tricks some lenders play on their customers.

Honorable mention

11. "101 Cost-Effective Ways to Increase the Value of Your Home," by Steve Berges (Dearborn-Kaplan Publishing Co., Chicago), $18.95, 247 pages. In this book, a 25-year home builder and realty investor author shares the facts about which home improvements usually add market value to your residence. He also explains which renovations will add little or no market value."Visibility adds value" is the theme. If it isn't visible, such as foundation repairs, the author says the home improvement probably won't add any market value.

12. "What Every Landlord Needs to Know," by Richard H. Jorgensen (McGraw-Hill, New York), $18.95, 209 pages. This small-town realty investor (Marshall, Minn.) shares his sage insights for profiting from modest rental properties and managing "tenants and toilets." Although not as well organized as the author's previous books, the valuable insights make the disorganization come together at the conclusion.

13. "Cities Ranked and Rated," by Bert Sperling and Peter Sander (John Wiley and Sons, Hoboken, N.J.), $24.99, 817 pages. This monumental book rates major cities for living desirability. However, if you are looking for the ideal, perfect place to work or retire, this book won't reveal it. The book is filled with facts, but short on the opinions of the expert authors. They consider nine statistical attributes, and one subjective quality of life viewpoint, to rank U.S. and Canadian cities for livability.

14. "Home Seller's Checklist," by Robert Irwin (McGraw-Hill, New York), $12.95, 167 pages. If you are getting ready to sell your home, this handy checklist emphasizes important considerations in a unique format. Key topics include selecting a real estate agent (or selling alone without professional help), selling a home under pressure (such as a pending foreclosure), preparing seller defect disclosure statements, and handling professional home inspections.

15. "Maverick Real Estate Investing," by Steve Bergsman (John Wiley and Sons, Hoboken, N.J.), $24.95, 269 pages. This well-researched book explains how the "big boy" real estate investors go about acquiring large investment properties. Investors profiled include Sam Zell, Samuel and Richard LeFrak, Gerald and Jeffrey Hines, Walter and Douglas Shorenstein, Donald Trump, and many others.

How to Track Down
Foreclosure Properties

By JAMES R. HAGERTY - Staff Reporter Wall Street Journal
Special to RealEstateJournal August 27, 2004

Question: I want to invest in foreclosure property. Where do I get up-to-date information?

-- Tony, Chicago

Tony: Steve Berges, a seasoned renovator of distressed homes and author of real-estate investing guides including "The Complete Guide to Flipping Properties" (John Wiley & Sons, 2003), suggests that novices interested in buying foreclosed houses find a good local agent specializing in that area. He says many real-estate brokerages have agents who are experts on foreclosed properties. Some of them advertise that skill in local real-estate publications. Agents who work regularly with banks in finding buyers for foreclosed homes should be able to let you know what's available and guide you through what can be a complicated process. Try to find someone experienced in your market who can recommend an agent.

Another real-estate author, William Bronchick, whose books include "Flipping Properties: Generate Instant Cash Profits in Real Estate" (Dearborn Trade, 2001), suggests finding a local information provider to e-mail you regular reports on notices of default. He pays about $40 a month for one such service covering six counties. There also are national companies that provide such information, but sometimes their information is dated, Mr. Bronchick warns.

A good source of data on repossessed homes being sold by the U.S. government is the Web site of the Department of Housing and Urban Development ( Information on available homes is updated weekly, HUD says.

Both authors warn that the pursuit of foreclosed properties is highly competitive in some markets and no sure ticket to riches. Mr. Berges says he invests in houses only if he is confident he can make at least a 15% to 20% return on his money. He wants a wide margin for error because the costs of rehabilitating and selling a house can be hard to predict. That furnace that seemed sound could conk out before you sell the house. Aside from the cost of buying and fixing the house, you need to tot up the likely cost of financing, insurance, taxes and any brokerage commission on your eventual sale of the property, Mr. Berges says. "It's not as cut-and-dried as you might be led to believe," he says, but it can be very profitable if you get it right.


The most profitable real estate improvements

By: Bob  Bruss, Inman News

July 13, 2004

If you want to know how to add market value to your home by making profitable improvements, perhaps before putting it up for sale, be sure to read "101 Cost Effective Ways to Increase the Value of Your Home" by Steve Berges. The author, a 25-year home builder and real estate investor, shares the facts about which home improvements are most profitable and which probably won't increase your home's market value more than their cost.

As a longtime investor in rental houses, I had a good idea which home improvements were the most profitable. But I quickly discovered from this new book that "visibility adds value." If the improvement isn't highly visible (such as foundation repairs), it probably won't gain much (or any) market value.

Purchase Bob Bruss reports online.

Unfortunately, the book doesn't include a nice, simple list of the most profitable home improvements. Instead, it leads the reader through several chapters listing the 101 cost-effective ways to improve your home's market value, room-by-room.

Berges has a five-star rating system for virtually every possible home improvement, such as painting (one of the most profitable and least expensive improvements), to attic and wall insulation (one of the most unprofitable improvements).

The author, in my humble opinion, is too generous with his star ratings. For example, he says adding a "powder room" adds a "moderate" three-star increased value to the home because it is a small room with limited visibility. I'd like to know where he gets his statistics. Frankly, very few homes I've seen even have a powder room.

But Berges is "right on" with the majority of his evaluations as to how much market value most improvements add. To illustrate, he says room additions add moderate value, meaning they add from 90 cents to $1.10 for each dollar of cost. Based on my personal experiences with room additions, he is a bit on the generous side.

This is an excellent book to consult before making a substantial improvement to your residence. Suppose you are considering spending $30,000 or more to install an in-ground swimming pool. This book could save you from making a major financial mistake.

Berges says swimming pools have a "low impact value." That means for every dollar spent on a new pool, you will be lucky to add 50 to 90 cents to your home's market value. Additionally, he cautions pools often detract from home marketability to prospective buyers with small children because of the danger of swimming pools.

If you are getting ready to sell your home, and are considering updating it before listing for sale, reading this book can be very profitable time well spent. To illustrate, Berges recommends adding new kitchens appliances and including them in the sales price even if your kitchen isn't updated. He rates new appliances as a five-star improvement.

However, some high-rated home improvements are surprising. For example, adding a pantry rates a five-star improvement value rating, according to Berges. Except in luxury up-scale homes, how many homes have you seen that have a pantry for storing food items? As a regular attendee at home builder national conventions, having toured hundreds of model homes, I can't recall any modest-priced homes with a pantry.

Chapter topics include "Your Home is Your Greatest Asset'; "Required Approvals'; "Everything You Need to Know About Subcontractors"; "General Property and Grounds"; "Exterior Structures"; "General Exterior"; "General Interior"; "Interior Rooms and Components"; "Structural, Heating and Plumbing"; and "Electrical."

This new book provides a quick and easy resource to determine if a contemplated home improvement will be a profitable investment, especially if you expect to sell your home within a few years. It also provides an excellent guide to which improvements will add the most market value and which should be avoided because they add little or no value. On my scale of one to 10, this superb new book rates a solid 10.

"101 Cost-Effective Ways to Increase the Value of Your Home," by Steve Berges (Dearborn Publishing Co., Chicago), 2004, $18.95, 247 pages; Available in stock or by special order at local bookstores, public libraries and .

(For more information on Bob Bruss publications, visit his
Real Estate Center

Copyright 2004 Inman News

Renovating a house for a profit?
First, eliminate the 'Yikes!'

   May 6, 2004

The single most cost-effective investment you can make to increase the value of your home is to buy a roll or two of plastic trash bags. Stuff them with junk outside the house -- from beer cans to raked leaves.

Nothing could be more common-sense than cleaning up the yard and exterior, right?

"You'd be surprised at how many people don't recognize the importance of doing these kinds of items," says Steve Berges, a real estate investor in Michigan who buys dilapidated houses, fixes them up and sells them for a profit. His advice: When renovating a house or preparing it for sale, spend money on things a buyer can see.

Any successful investor is adept at spotting hidden value, buying low and selling high. That's what Berges does when he scouts properties, generally houses 20 to 70 years old. "One of the things that we like when we drive up to a house is what we refer to as high 'Yikes!' appeal," he says. He defines "Yikes! appeal" as the state of a house in which a normal person would drive up, say, "Yikes!" and keep on driving.

What a 'Yikes' house looks like
A house with high "Yikes!" appeal has weeds, a boat parked in the front yard and an old car transmission on the side of the house, nested amid beer cans. A rain gutter hangs down. Overgrown shrubs obscure the front windows, creating a dreary interior. People actually try to sell their homes in such condition, creating opportunities for bargain-hunters.

Working the other side of the equation, Berges has written a book called 101 Cost-Effective Ways to Increase the Value of Your Home.

The book lists various kinds of exterior and interior improvements (improving the porch, replacing kitchen cabinets) and ranks each project's "impact value." A one-star impact value means the project won't add to the home's value and might actually lower it; a five-star impact value means the project could potentially add $1.50 or more to the home's price for every dollar spent.

A lot of money is at stake. Homeowners spent $166 billion on home remodeling in 2001, according to the Harvard Joint Center for Housing Studies. More than three-quarters of that was spent on what the Joint Center calls improvements, with the rest going to maintenance and repairs. Another $48 billion was spent on the remodeling of rental properties. Researchers credit the $214 billion in remodeling for preventing the economy from dropping further into recession in 2001. More money was spent on remodeling than on clothing that year.

Researchers discovered that 6.3 percent of remodelers spent more than $20,000 on improvements in 2000-2001 and 2.7 percent spent more than $35,000. Much of that was targeted toward fixing up kitchens and bathrooms.

Protect, improve, appreciate
"Families that spent more on home improvements also realize the greatest rates of price appreciation," the Harvard study said. "In many regions of the country, homeowners recover as much as 80 to 90 percent of the cost of home improvements in the form of higher home values. Little wonder, then, that homeowners spent almost $2,300 on average in 2001 to help protect and improve their most important financial asset."

If you're getting ready to sell a house, you want to be among the homeowners who recover 80 percent or more of their investments in the form of a higher price. Berges says the key is thinking like a buyer. And what do buyers do? They drive up to a house and look at it. If they're not repelled by what they see, they step inside and look around.

Based on that typical experience, Berges formulated the following guidelines:

  • Spend money on what can be seen vs. what can't be seen;

  • Fix up the exterior first, then the interior;

  • Focus first on what Berges calls the "Yikes!" appeal -- clutter, trash and bad smells that drive down a home's value.

"Visibility adds value," Berges says. "The improvements that are most visible are the things you need to focus on."

What you see is what pays off
This means that, if you have $10,000 to spend, and you can either spend it all on a new roof or all on repairing a cracked foundation (but you can't do both), you should replace the roof because it can be seen. Whatever your budget, put a higher priority on improvements that can be easily seen, because those give you the best bang for the buck.

"People expect the foundation, plumbing and wiring to work," Berges says. "If they don't, they detract from value. But fixing them to bring them up to code doesn't necessarily add value."

Because an unkempt yard and ugly exterior can cause prospective buyers to drive away without going inside the house, you should work on those first. Clear up clutter. If you want to, hire day laborers to remove that old engine block in the driveway and reattach that rain gutter that fell two years ago and has been lying by the side of the house ever since. Then concentrate on landscaping. Prune hedges, trees and shrubs, especially if they obscure the front of the house. Paint. If the roof is dirty, hire someone to power wash it.

From the curb, "the roof takes up 30 percent of what you see," Berges says. "If you have a nice-looking roof, that goes a long way in curb appeal for the house."

Cut clutter, clean
Maybe you notice that Berges isn't recommending that you break the bank -- just that you spend a little time and money to make the place look better. You should do the same inside the house -- reduce clutter and clean everything. If you own a pet, invite a non-pet owner inside the house to sniff around. You might be inured to the smell of your Weimaraner's urine, but the stench could make a buyer retch.

When Berges buys a house that he intends to fix up quickly and sell, he almost always has the interior repainted wall-to-wall and has the carpets and vinyl flooring replaced. Once, when he and his wife sold their own home, they didn't replace the carpets and they regretted it.

"We thought that by offering a flooring allowance, a family could move in and select their own flooring," he writes. But he discovered that buyers don't want to select their own flooring. He already had bought a house and didn't want to be stuck with two mortgage payments, so he unloaded the old house quickly, for $10,000 less than he thought it was worth.

Deal with the hassle, keep the profit
"For half that amount we could have replaced all of the flooring and sold the house for its market value," he ruefully writes. "People don't want to fool around with painting and replacing carpet and fixing the house up. In the world of fast food and instant gratification, people just want to buy a house and move in."

Berges's book is geared toward middle-class homeowners. On the upper end, buyers expect well-kept yards and painted walls, of course, but they often yearn for amenities that middle-class people might not expect. For example, one of the hot trends in the Hamptons on Long Island, says architect Marcia Previti of Gillis Previti Architects, is for two dishwashers in the kitchen. "You might reserve one for glassware and one for pots and big dishes," she says.

Adding a second dishwasher might be a sound investment in the Hamptons or in Beverly Hills, but it would be a waste of money in Toledo or Peoria. Berges' final piece of advice is to keep up with the Joneses, but "you don't want to over-improve."

Berges lives in a neighborhood of concrete driveways. A neighbor recently spent $28,000 replacing a concrete driveway with brick pavers. In a high-end neighborhood, that would be a cost-effective use of money, but Berges' neighbor won't come close to recouping the cost of installing the beautiful driveway.

When you're trying to decide how to spend remodeling money, Berges recommends seeking the advice of an experienced real estate agent who is familiar with your neighborhood. A licensed appraiser should be able to provide guidance, too.

Look Around the Block
When Comparing Homes

By JAMES R. HAGERTY - Staff Reporter Wall Street Journal
Special to RealEstateJournal May 5, 2004

Question: I purchased a home in an upscale Illinois neighborhood about six months ago.  Although the average home price for my ZIP code is about 40% to 50% higher than what I paid for my home (with the exception of my neighbor who just did a complete rehab), the other homes on my street are valued at around 35% less than mine.  My house has only three bedrooms and two baths. We are thinking about adding a second story to the house with another bathroom and at least one more bedroom. My concern is that I would overbuild for my street. Should this be a concern when four-bedroom homes two blocks away sell for a 40% premium? Is there any rule of thumb to calculating a price for a given area? Is the median price in the ZIP code enough? Should I look at the median value of homes on the street I live on? The street I live on is a good location; the only thing holding it back is that there are several older couples on my street who have no reason to renovate.

-- Bryan, Lake Forest, Ill.

Bryan: This sounds like a tough call. There are no definitive answers, but here are some pointers from people who deal with these questions on a daily basis.

Comparing your house price with the median for your ZIP code would be casting the net far too wide.  A single ZIP code can encompass a full range of housing, from luxury to squalor. On the other hand, you needn't compare only with the values on your block.  Prospective buyers may well be comparing your home with ones within a few blocks. Still, to the extent that other homes on your block look shabby, that may well hurt your resale value, no matter how posh your house looks.

Expanding your home can be a good investment in terms of resale value, but it isn't a sure thing. Kyle Wheatley, the owner of Century 21 Team Wheatley in Killeen, Texas, says people often find that they don't recoup their full investment in a home expansion when they resell a home. Mr. Wheatley, who also owns a construction company, advises against such a project if your only aim is to increase the value of the house. But go ahead if you need the extra space, he says.

Steve Berges addresses this question in his new book, "101 Cost-Effective Ways to Increase the Value of Your Home," due for publication by Dearborn Trade Publishing in June. Mr. Berges, who owns Symphony Homes LLC, a home-building and renovation company in Lake Orion, Mich., says it's vital to consider how the size of your house compares with others in the neighborhood. If yours is one of the smallest, he says, it may make sense to add a room.  If it's already one of the largest on the block, "investing your hard-earned money to make it even larger would most likely yield negative returns."

What pays off most in terms of resale value? Mr. Wheatley suggests renovating bathrooms and kitchens. Something as simple as re-facing cabinets or putting in new countertops can make a big difference. Mr. Berges agrees about kitchen and bathroom makeovers. But he says lots of other relatively small projects also can make a big difference in resale value: better landscaping (or even just removing junk from your lawn), fresh painting, roof repairs, new flooring and improved lighting. And don't forget good ventilation, he adds. You may no longer notice stale pet or cooking odors, but prospective buyers will.


Robert Bruss: Experienced investor explains 'flipping' profit details

By ROBERT J. BRUSS, Inman News Features
February 28, 2004

Whether you are a novice or experienced real estate investor, in "The Complete Guide to Flipping Properties" by Steve Berges you will enjoy learning the details of how to earn profits by "flipping" properties. Just in case you are not familiar with that term, flipping means acquiring either title or the right to buy a property and then quickly reselling at a substantial profit.

The author, both a real estate investor and a home builder, has considerable experience as a real estate entrepreneur. The many examples throughout the book add realism to his explanations of flipping techniques.

The essence of flipping is the property is acquired at a bargain below-market purchase price, usually fixed up to add considerable value, and then resold within a few months, sometimes even quicker. Berges explains how it is easiest to "flip" houses, but he also explains how to flip other run-down properties, such as apartment buildings.

This easy-to-understand book is written for both beginner and advanced realty investors. It starts by defining the flipping properties strategy, followed by explaining the three primary classes of flippers. The author labels these people as the scouts, dealers, and retailers. He then shows how each earns their profits, depending on the amount of their work involved.

But this book is definitely not about buying flipper properties in run-down slum neighborhoods. Instead, it emphasizes the importance of decent locations and even lists methods to determine the best locations for flipping.

The two chapters to which I did not relate well are titled "Valuation Methodologies" and "Financial Analysis." Perhaps because they are so technical, with heavy emphasis on ratios and numbers, many of the details seem overly complicated and non-essential to calculating flipper profits.

One of the book's best chapters explains winning negotiation techniques to avoid overpaying for potential flipper property. Berges emphasizes the importance of determining the seller's true motivation for selling and then satisfying the seller's primary motive for selling.

The examples in this chapter are especially applicable to explain how to negotiate what is truly important, such as price and terms, but give in on unimportant aspects such as any personal property to be included in the sales price.

The book concludes with a motivational chapter about power principles: vision, passion and autonomy. Berges uses a non-real estate example of an individual who used these principles to succeed in his business. The strong implication is readers should also apply these principles to their real estate investing strategy.

Chapter topics include "Flipping Properties Defined"; "The Value Play Strategy"; "Ten Ways to Locate Properties"; "Valuation Methodologies"; "Financial Analysis"; "Seven Steps of Successful Negotiations"; "Financing and Closing Considerations"; "Assemble a Winning Team of Professionals"; "Three Keys to Maximizing Your Potential"; and "The Three Principles of Power."

Finding fault with this well-written book is difficult. It is easy-to-understand, with many personal examples from the author's flipping experiences to illuminate the topics explained. With emphasis on flipping properties involving a minimum amount of the investor's personal cash, this is an excellent book for learning quick-cash profit methods. On my scale of one to 10, this well-written book earns a solid 10.

"The Complete Guide to Flipping Properties," by Steve Berges (John Wiley and Sons, New York), 2004, $19.95, 182 pages; Available in stock or by special order at local bookstores, public libraries and


Ribbon Cutting Ceremony

The Davison Index

August 28, 2002

Small Town Treasure

Former La Porte resident takes talent to the top

The Houston Chronicle       

August 1, 2002

Copyright 2002 Chronicle correspondent

Steve Berges, 43, a native and former resident of La Porte, is a small-town treasure, and it's funny how some treasures refuse to stay hidden. His recent book, The Complete Guide to Buying and Selling Apartment Buildings, published by John Wiley and Sons, is the latest accomplishment on his list of successes.

Berges, the son of Herman and Arlene Berges, always has been a bit of an overachiever. He was a Walter Rundell scholar and valedictorian at Lee College in Baytown, and while he was in school, he secured his real estate broker's license and worked in the market. After graduating from Lee, he attended Rice University, where he earned his master's degree in business administration in finance.

He hasn't stopped there. After spending more than 30 years in La Porte, Berges moved to Michigan a few years ago with his wife, Nancy, and two sons, Philip and Samuel. He continued his successes there, teaming with his brother-in-law, Don Mahoney, to found Symphony Homes, a home construction company.

The name of the partnership was easy enough to pick out. "I played the trombone and piano in high school," Berges said, "and Don and I love music, so the name came naturally from that influence."

Their work with an award-winning East Coast architecture design firm has brought them a number of housing contracts, including a recent development with 215 sites.

Berges said he loves working in real estate, where the challenges of the market help him to learn even more about it. "I enjoy the challenge of taking on new projects," he said, "because it pushes me beyond my comfort zone, and allows me to grow and develop my own skills and talents."

Although he found a number of sources about real estate investing, Berges couldn't find one related to purchasing multi-family buildings, so wrote his book as a culmination of his research and experience.

He includes one of his strategies, "the value play," in the book. The strategy influenced the creation of a Web site,  where visitors can purchase his book and get more information about real estate strategies and investing.

Juggling different projects can consume a lot of time, but Berges knows where his priorities stand. "I don't become overly consumed with the principals of work," he said. "I find a proper balance by spending time with my family and with my church activities."

He said the new book and successful company in another part of the country have not changed him a bit, and his roots in La Porte run deep. Berges returns regularly for Christmas and in the summer for the annual family reunion, but he might not make this year's reunion, because he wants to spend time with his new son, Benjamin Henry, who was born this past April, just a couple of weeks after his book was published.

Throughout the success of his business ventures, his new book and new son, Berges seems to keep a sense of humor, and likes to talk about Benjamin Henry, who is the seventh generation Berges with that middle name. "We're glad he's not the eighth generation," he said with a laugh. "Because then he'd be Henry the Eighth, and that might not sit well with him."

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