Fixer Jay’s Mom & Pop Millionaire Blog

Sad as it may be, anyone can be sued anytime, anywhere for anything! Hey, it’s the American way! Naturally, landlords and property owners fall smack-dab in the middle of this Wild West, shoot ‘em up free for all! The big question for us hard-working landlords and housing providers is: What can we do to protect ourselves?
If you operate real estate and manage the tenants who live there, your first line of defense will always be your insurance policy. Don’t confuse corporations, LLC’s, trusts or hiding on some far away island with the protection you need. When you own mortgaged properties and you have rental customers (aka), tenants living on your properties – you must have adequate insurance to protect yourself from losses. The only thing we need to discuss now is what kind.
Basically property owners (investors) need two kinds of insurance! They need property insurance (a fire policy) and they need liability insurance, which protects against personal accidents and injuries that may occur. I call this the people insurance! Liability insurance for investment real estate owners should provide protection for two different kinds of exposure. The first would be protection for accidents at the property. For example, say the bathroom floor falls through with the tenant standing on it, causing a personal injury.
The second kind of liability for investors is what I would call the imploding liability. It’s a risk for owners but has nothing to do with the property itself. In this situation, the property doesn’t cause the problem, yet the owners and his real estate holdings will be exposed to a loss just the same! Here’s an example of what I mean. Let’s say your handyman worker has just purchased a new toilet plunger at Scotty’s Building Supply and while driving to your duplex loses control of his VW bus and steers right through the middle of a troop of Girl Scouts selling their cookies on the sidewalk. Obviously, the property had nothing to do with this accident; yet• the liability will be tied to the owner and his real estate through the actions of the handyman! Naturally, you as the property owner-employer will be held responsible. You’ll need lots of insurance to pay for the cookies, believe me!

Tags: Fixing For Money // Add Comment »

Substantial discounts must fall in the 20¬50 percent range to make serious money. Don’t tell me how hard it is. I already know. The good news is, it can be done and with a little knowledge, you can do it.

When I talk about these sizable discounts, I’m talking about the difference between what you negotiate to pay for a property and what it will be worth after you become the new owner.

For example, if I determine a shabby looking house is worth $100,000 after I clean it up, and I estimate the clean-up effort will cost $10,000, my goal would be to acquire the property for no more than $70,000 or a 30 percent discount. If you can do this with a HUD, house or foreclosure – fine!

Looking for bigger and more substantial discounts is what led me to my favorite type of investment real estate: small multiple unit properties. I quickly discovered that 30 per¬cent discounts like the single house example above, were like child’s play compared to run-down multiple-unit properties.

Multiple unit values are primarily deter¬mined by the income they generate. The appraisal is the only measurement of value for single family homes.

When a small apartment building or group of duplexes is allowed to become run down, the income or rents the property generates go down with the property. Buying properties with low rents is where discounts can really become substantial-40-50 percent dis¬counts are not unheard of. ‘Investors who learn to participate at this level can rip, snort and rumble when it comes to paying the right price the day they buy.

Tags: Fixing For Money // Add Comment »

Right now is a perfect time to consider income-producing properties! Done correctly, these properties offer fail-proof investing – plus the income (rents) is indexed to regular living costs, which provides protection against inflation. For W-2 wager earners attempting to save money for retirement. Acquiring small apartments offers the perfect business opportunity.

To start with, whatever amount you have to invest can quickly be multiplied with safety. This is extremely important because many so-called retirement plans linked to the depressed stock market continue to collapse, dumping your dollars as you read this letter. Extraordinarily high investment returns of 20-50% are not the least bit uncommon for leveraged real estate – and when your transactions are properly structured, aII positive income can be sheltered from Uncle Sam’s tax collectors.

Cheap houses in a bunch (like bananas) and small rundown apartment units offer the best ray of hope for Mom & Pop investors in their search for cash flow investments. This is what I teach at my FIXER CAMPS and this strategy has made many students wealthy and financially independent. Many have built sizeable retirement incomes that won’t dry up before they do. My investment techniques are very do-able for average working folks! First of all, we’ll build a solid cash flow foundation so we never have to retreat! Every now and then, someone asks me — Will your teaching make me like Donald Trump? They answer is no, it will not. I can however teach you ways to invest that will make you financially secure for your remaining days on the planet – assuming of course, you’re ready to do your part!

Perhaps the most significant benefit for ordinary working folks who are concerned about their future is that affordable rental houses and small apartments can provide a quick alternate income. Also, income property equity builds much faster than traditional savings plans because affordable houses are always in demand. Additional income, equity growth and increasing cash flows offer the best guarantee that you11 be able to enjoy the comfortable retirement you deserve and are counting on!

Tags: Growth, Risk and Longevity // Add Comment »

Don’t forget this: Fix-up specialists are not remodeler, so don’t try to be one! Like I always say, you wouldn’t be happy with the money they earn. Playing house and remodeling tends to go together. Things like splitting up big rooms to gain an additional bedroom or dining room – also, making the kitchen big­ger, expanding the bathroom or changing the hallway around seldom pays off. If you’ll stop to think about these schemes, they are gener­ally a matter of preference or taste I More often than not, two people could never agree on rooms or configurations anyway. You’ll be money ahead if you keep things simple! Leave the house alone and simply clean it up and fix what needs fixing!

Fiddling around with the walls and room sizes can throw a house out of balance! For example: Changing a two bedroom house to three bedrooms likely means more people will Jive there. You might need more heat, cooling and electrical circuits. The bathroom and kitchen may be too small for larger families. Just one change could have a ripple effect. If you need more power and more heat – those things could easily cost more than any benefits you’ll gain.

Tags: Fixing For Money, Success Secrets // Add Comment »

Often you’ll find the biggest rewards are off the beaten pathway. This might be your first step towards “big bucks” and real cash flow. Try to think about investing a little differently. Isn’t it the folks with vision who always seem to get there first and make the most money? Followers are always lagging behind and are never quite certain about what they’re doing. Generally, they show up too late after the competition has “bid up” the bargain prices. Often, they get snookered into buying prop­erties using the “Greater Fool” theory. Many traditional investors have long since given up any ideas about making profits. They’ll be happy just to break even. Their biggest con­cern about the properties they own is getting their original investment back.

The big reward for house fixers who learn to solve ugly house problems is seller conces­sions. Sellers who have problems are highly motivated to make deals. It’s these deals that earn big money. There is no way to make “cash flow deals” with folks who might sell with enough persuasion. Terms such as seller financing and discount prices don’t come from sellers who are still proud of what they’re selling. For every “barn burner” transaction I’ve made there has always been a seller who has very few options to bargain with.

Allow me to clear the air about fixing houses for money. First, lots of people can fix up houses, but the majority come up short on the money part. They don’t earn much money for all their time and effort. People get paid for their skills. You won’t make a killing in the fix-up business from painting a house or hanging shutters. The house will look better, but your bank account won’t.

Following is a list of the top five conditions that create the biggest purchase discounts, the best buying terms and ultimately the biggest profit potential for us house fixers.

1. Ugliness: pigsty looks, tons of junk -discount range 30-50%.

2. People problems: unruly deadbeats, non paying-discount range 30-40%.

3. Older: junk, deferred maintenance -discount range 25-35%.

4. Rundown: out-of-state owners, tenant manager-discount range 20-30%.

5. Cosmetic fixer: needs paint, minor tune-up-discount range 10-15%.

Tags: Success Secrets // Add Comment »

For the vast army of “Mom and Pop” investors, landlording skills are the price you must pay to become lots richer than your snoopy neighbors. Granted, landlording is the most unromantic part of being a wealthy tycoon – but for aspiring real estate investors who wish to make it to the Promised Land – take my advice, learn about landlording at the same time you learn investing skills. Both are inseparable parts of your “becoming rich” plan.

WEALTH MUST INCLUDE RIGHT INGREDIENTS

To make the big bucks in this business, you must hold onto your rent-producing properties. Flip-flopping and selling off assets might sound a little more sexy, but its short lived at best. Selling works in direct opposition to retaining income, depreciation credits and avoiding the tax collector. Combined with appreciation, these are the main ingredients for wealth. Obviously, keeping properties requires handling the tenants, who pay you their money every month – but as your collections grow landlording becomes much more tolerable, and eventually, more fun!

YOUR EDUCATION NO MATCH FOR YOUR TENANTS

Finally, learning “street skills”, as well as rules and regulations in the book, will make your landlording job 100 times easier. You must learn enough street knowledge to gracefully handle tenant intimidation (#1 cause for landlord suicides). Also, you need to learn my special techniques for handling routine renter business by mail, as opposed to personal confrontations or obnoxious phone calls. You’ll totally fall in love with this technique – I promise

If you ask folks who are successful long-term real estate operators what made them that way – I’Il bet I can tell you their answer. It’s their ability or skills to handle the peqp1e who live in their properties! Do-it-yourself investors like me don’t become successful without landlording skills. No one is born with these unique set of skills, but it’s nearly impossible to succeed without them.

To make the big bucks in this business, you must hold onto your rent-producing properties. Flip-flopping and selling off assets might sound a little more sexy  but its short lived at best. Selling works in direct opposition to retaining income, depreciation credits and avoiding the tax collector. Combined with appreciation, these are the main ingredients for wealth. Obviously, keeping properties requires handling the tenants, who pay you their money every month – but as your collections grow; landlording becomes much more tolerable, and eventually, more fun!

JOIN ME ON FEB. 26 27 28 AT MY ANNUAL MANAGING TENANTS AND TOILET SEMINAR

FOR DETAILS – CLICK SEMINARS OR CALL 1-800-722-2550.

Finally, learning “street skills”, as well as rule, and regulations in the book, will make your landlording job 100 times easier.  This is where I can help you the most.  I have years of “tender loving” tenant management under my belt and I’ll share my triumphs, as well as some pitfalls. When you finish my seminar, you’ll have enough street knowledge to gracefully handle most tenant intimidation (#1 cause for landlord suicides). When you learn my special techniques for handling routine renter business by mail, as opposed to personal confrontations or obnoxious phone calls, you’re gonna totally fall in love with my training –

I’LL GUARANTEE IT!

Tags: Fixing For Money // 1 Comment »

Many small mom and pop type investors give up the opportunity to make a ton of money and have a wonderful free come and-go” lifestyle simply because they never see the importance of learning to be a skilled landlord. You don’t become a skilled landlord when you acquire houses. You become the owner-that’s all! Skilled landlording will … take some education.

Basically there’s just two ways to learn landlording. You can learn from people like me or you can learn from the tenants. If you pay me 10 times more than I charge to teach you, it’s cheaper than learning this job from your tenants.

Every landlord should know and under­stand landlord-tenant laws in his own area. Once you know the laws, your fear of rent­ers or of being intimidated will vanish. An overwhelming number of property owners incorrectly assume these laws favor deadbeat tenants. I can assure you this is not the case, although sometimes it appears that way. Laws are mostly about equity. Remember, there are unscrupulous landlords as well as naughty tenants.

Landlords often find themselves in seri­ous hot water with tenants because they try to inject too much logic and common sense into tenant management. Logic and common sense have their place, but they seldom count for much where legal issues are concerned. For example, it is nearly impossible to effectively force your personal living standards and ideals on your tenants. To do so could seriously affect your sanity. What earthly good would it do to make a million dollars from your rental properties if your tenants drive you crazy?

Tags: Managing Tenants and Toilets, The Joy of Cash Flow Investing // Add Comment »

Today can be the first day on the road to your financial freedom! Now more than ever, income real estate will work for newcomers and “old salts” alike. A collapsed housing market, coupled with failing mortgage lenders, has created a depressed market, ideally suited for small-time do-it-yourself investors. Why is this good – you ask?

To begin with, income real estate like duplexes and small apartments are caught in the downturn same as the houses we live in! The big difference however - ­rental units earn you money – houses cost money! Since the general real estate downturn includes all real estate, houses and income units alike, an extra­ordinary lifetime opportunity presents itself!

Rents are actually increasing as more homeowners lose their houses and are forced into renting. Income property prices have shrunk to 20 year lows, just like houses, however; the financing for older rental units that I mostly recommend, can now be negotiated between the buyers and sellers. In other words, we’re once again back to seller financing where cash flow can be automatically structured in the deal. No longer are small-time investors stuck with what the bank says.

If the train left the depot without you before, this Is your time and opportunity to catch up! You can now buy properties with seller financing and cash flow that make sense. For many, it’s a second chance to buy real estate that can lead to financial freedom. Today, you can often start with cash flow, build a second income and even switch to full-time real estate investing. It’s truly the perfect real estate investor storm.

Tags: Vision of Opportunity // Add Comment »

Real estate agents account for 95 percent of all the real estate sales. Therefore, anyone who thinks going around agents is good business, needs to rethink the issue. In my own case, I would have nowhere near the real estate holdings if it weren’t for my professional real estate helpers.   My two agent-brokers have been involved in 60 percent of all my activity, both buying and selling. Believe me, in this busi­ness you will need help if you expect to make any serious money any time soon.

I pay real estate commissions if agents bring me good deals. Real estate wealth has nothing to do with stiffing agents. If you get the reputation for being a “tightwad,” you could lose out on valuable tips and good deals simply because the sales people don’t want to deal with you. How much time would you spend with a client who thinks you don’t deserve to be paid?

I can buy a property quickly. To an agent that means fast paydays and they all like that. My requirements are: the property must fit my strict financial guidelines and just any property won’t do. Property qualifications are needed to determine if the property is a candidate. Agents won’t hang around you if you’re a looky- loo. No agent worth his salt can afford that nonsense. My agent’s job is to know exactly what I will buy. He doesn’t call me about every property for sale in Redding. A good agent will immediately qualify the property to determine if it has potential. My agent knows I don’t normally want deals where new bank financing is required. He also knows I want sellers who will carry paper. He knows I rank small “leper” properties, like four to six houses on a single lot or a bunch of ugly rundown duplexes, at the top of my buying list. When he hears about those kinds of properties, he acts quickly.  Finding a good agent is not a lot different than finding a good wife or husband. It’s simply a matter of weeding out until you find the right combination.

Tags: The Big Picture // Add Comment »

Fixing run-down houses for profits is not the same thing as remodeling houses. If it were, lots of custom builders and remodeling contractors would end up rich and handy­man-types like me would be working for them. Fixing houses the way I do has a lot more to do with budgets and accounting than with hammers and wallpaper. Fixing is my goal, but only if there’s a profit to be made.

You need to understand that “leverage fix-up” is the kind of fix-up that adds money to your pension plan. If it costs $20,000 to fix up a $70,000 rental house you bought for $50,000, you’re better off waiting for social security. There’s just not enough fun spend­ing a ton of money not knowing if you’ll ever get it back, even without a profit.

This is what many small-time re-modelers do. And of course it’s the reason that a large number of them end up 25 years down the road with nothing to show for their skills but a used Chevy pickup, a box of worn-out tools and no health insurance. It’s not because they don’t know what they’re doing. It’s because what they’re doing doesn’t earn them enough profits. I’m trying to show you a way that you can earn 10 times more money than journeyman re-modelers, with 10 times less remodeling skills. I call this maximum leverage of your personal efforts and its much more fun and lots more profitable.

The most frequent questions I’m asked about fix-up are: What is your dollar limit and where do you draw the line and simply walk away? Dollar limits are a matter of writing out my fix-up cost estimate and then adding that to the amount I’m willing to pay for the property. If those two numbers are higher than 80 percent of the fixed-up market value, I generally back away, especially on lowered properties.

For example, let’s take a house that I figure will have a $65,000 market value after my fix-up work is done. I’m willing to spend $52,000 total to acquire the property and do the fixing: $43,000 purchase price and $9,000 for fix-up work. If my fixing estimate is on target, I’ll end up with $13,000 equity when I’m done.

Tags: Success Secrets // Add Comment »