Fixer Jay’s Mom & Pop Millionaire Blog

Why is it that very few people ever achieve their financial dreams and what do the few successful ones do differently from the ma¬jority who fail? Could it be they plan to fail? I don’t think so. More likely they fail to plan. Many waste much of their most valuable resource, their time, trying to figure out ways to make money quick and easy without much effort. These people are only fooling them¬selves. Nothing worthwhile is accomplished without a plan and without some hard work.

Often hard work can be greatly reduced by smart work; but generally this doesn’t happen until you are well into a plan and have reached a certain level of experience. Seldom can one get the experience without the hard work initially. It just so happens that this is one of the rules for success -like a Law of Nature.

Big money is made in real estate when you can consistently get the highest investment returns. Which do you think is better, buying houses for $25,000 each with average down payments of $2000 to $3000 and rents after fix up of $400 per month – or houses that cost $60,000 each with $10,000 cash down and rent for $550 per month. If you own both kinds, you already know which are best. If you don’t know yet, by all means study the numbers.

Just remember, cash flow is good. The opposite is not.

Join us at Fixer Camp Oct. 15, 16, and 17 we will teach you the difference!!!

Tags: Develop a Business Plan First // Add Comment »

When you own the houses, you have your own personal money machine! Obviously, you must maintain the property and provide the necessary management– ¬But, in exchange for doing that, you control the money’ It’s yours to spend any way you choose. Owning your own widgets is the surest path to financial independence. The basis for wealth behind nearly every rich person can be traced back to the ownership of a patent, a copyright or a deed! Owning income real estate puts you in with the right crowd.

Well-Financed Houses Are Very little Risk

In terms of investment risk, I’m talking about the risk of losing your assets – Colony houses, like the ones I own, are about the safest kind of investment you can make. Naturally, you must avoid paying too much and taking on too much mortgage debt. Residential renters are a much easier bunch to attract than commercial tenants. Also, everyone needs a shelter. Houses are considered a basic necessity of life. The danger of anyone taking your investment houses, with any equity, is almost nil! If you buy them right and structure the financing so your tenants can pay them off, you’ll be very well rewarded for your initiative.

Tags: The Big Picture // Add Comment »

Operating rental properties and dealing with tenants are inseparable parts of landlording. I owe my real estate success to my landlording skills. Some folks argue that professional property managers get paid a handsome percentage of the gross rental income to relieve owners of this thankless task. So what’s the big deal, they say?

Proprietorship is the “big deal”. No one shares the same level of motivation like the owners. Remember, its owners who borrow money against their homes. Its owners who invest their entire life savings trying to make a better life for themselves and their families. Owners have a much greater interest in their own success than anyone else. That’s what proprietorship is about. Management fees paid to others simply won’t buy it.

Try to picture if you can your professional property manager racing out on a repair call Sunday afternoon to fix the handle on Sally Mae’s toilet. Nothing serious-the handle just broke off and the lever fell down inside the tank. You can see the flapper chain lying in a coil right there on the bottom. It’s easy to fix, but still, Sally and the kids can’t flush. Naturally all the grand kids are there on Sundays. She needs help right now or she’ll never speak to the owner again. That’s you! I’ll make you a little bet if that toilet ever flushes before Monday morning, then an owner went over to fix it. That’s proprietorship.

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

Daniel Webster said: “The world is governed more by appearance than by reality.” And, that’s exactly how your customers will judge your fix-up job.

If you spend $5000working under the house, you can consider that money to be mostly a gift for the next owner. If instead you can spend that money for beautification like exterior paint, carpets, new lawns and a white picket fence around the front, you’ll not only be in harmony with Webster, but you’ll also be adding sizzle items that both buyers and renters are willing to pay you for!
~
My Mavis property consisted of 11 older rental houses on a two acre lot. It was completely overrun with weeds and bush when I bought it. About 50 percent of my fix-up profits were earned by simply cleaning and hauling.

Avoid the Two Deadly Sins

Whatever else you do DON’T PLAY HOUSE WITH YOUR FIX-UP PLANS and DON’T SPEND OVER 10 PERCENT OFYOUR ORIGINAL COST ESTIMATE.

Both of these DON’TS are not the easiest advice to follow! I don’t expect you to get ‘em both right on your first attempt. That’s exactly what I did and I don’t know of any shortcuts to help you! It simply takes practice!

When Mavis sold, I had made a $150,000 profit. The profit cost me roughly $20,000, which I think you’ll agree, is not very much to spend for that much profit. This is fix-up lever¬age! For the Mavis job, I’m talking about 7.5¬to-t leverage. That means for every dollar I spent doing fix-up and clean-up, I got back $7.50 when I sold the property. 1 might add that during the 14 months I owned Mavis the monthly rents were increased over $1200. Natu¬rally higher rents equate to a higher resale value.

Tags: Fixing For Money // Add Comment »

People ask me all the time — Jay; which of your books is the best? Which one would you recommend I purchase? Then they often say something like ­my IQ is above average, so I understand and retain what I read. I’m sure your best book is enough to get me started! Friends, this is one of those rare times when I’m completely without words (which is very rare).

When I think back about all the real estate books I’ve bought – all the seminars I’ve attended serving my apprenticeship – this best book question always makes me feel like a slow learner! I needed lots of books, even though most were written by salesmen masquerading as real estate investors. Still, I was learning my craft and I was afraid I’d miss something. Books and seminars taught by real investors allowed me to become successful in a respectable period of time. Learning this business by yourself takes way to long and allows for too many costly mistakes along the way!

I’ve always been curious about these best book questioners and how they think! I sometimes wonder how they’d react if I told them; tomorrow morning, at 8:00 a.m. sharp, I’ve scheduled you for heart surgery! Your doctor is somewhat new, but he’s read an excellent heart book and he retains almost everything he reads. And, did I mention – his IQ is above average!

I will tell you from experience – if you treat real estate education any less serious than heart surgery – it will show quickly in the results you get. In fact, investors who go broke in this business – or file bankruptcy, often suffer severe anxieties and will eventually need the services of a good heart doctor before they undo the mess they’ve created themselves. Are there any more questions about my books!

Tags: Fixing For Money // 1 Comment »

Don’t forget this: Fix-up specialists are not remodelers, so don’t try to be one! Like I always say, you wouldn’t be happy with the money they earn. Playing house and remodel¬ing tends to go together. Things like splitting up big rooms to gain an additional bedroom or dining room – also, making the kitchen big¬ger, expanding the bathroom or changing the hallway around seldom pays off. If you’ll stop to think about these schemes, they are gener¬ally a matter of preference of taste! 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 live 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 // Add Comment »

Besides making money, being a success¬ful landlord offers some major personal benefits. For example: You can provide an excellent quality of life for yourself and your family. You can live wherever you choose and set your own work schedule. You can spend more time with hobbies and doing the personal things that never get done when you work for someone else. Being your own boss is the envy of every W-2 wage slave.

The good news is, owning income¬ producing property and landlording is a profession that provides an equal opportunity for everyone to achieve financial independence and a quality of life second to none if you choose to participate. My good friend, Richard E., who owns and manages small apartments in San Francisco, says: “If you are comfortable with the role of owner/¬landlord and don’t allow yourself to be intimidated by the responsibility for setting out the rules by which tenants may live in your properties, you will find as many others have, that owning and operating small rental properties provides a vehicle for self-employment and self-expression that is difficult to match in our society today.”

I certainly agree with Richard: owning houses that produce cash flow every month is a great way to go once you get the hang of it. However, like anything else in life, you must pay your dues up front. Landlording is the price of admission for investors who operate income properties.

Tags: Managing Tenants and Toilets // Add Comment »

People ask me all the time — Jay; which of your books is the best? Which one would you recommend I purchase? Then they often say something like ¬my IQ is above average, so I understand and retain what I read. I’m sure your best book is enough to get me started! Friends, this is one of those rare times when I’m completely without words (which is very rare).

When I think back about all the real estate books I’ve bought – all the seminars I’ve attended serving my apprenticeship – this best book question always makes me feel like a slow learner! I needed lots of books, even though most were written by salesmen masquerading as real estate investors. Still, I was learning my craft and I was afraid I’d miss something. Books and seminars taught by real investors allowed me to become successful in a respectable period of time. Learning this business by yourself takes way to long and allows for too many costly mistakes along the way!

I’ve always been curious about these best book questioners and how they think! I sometimes wonder how they’d react if I told them; tomorrow morning, at 8:00 a.m. sharp, I’ve scheduled you for heart surgery! Your doctor is somewhat new, but he’s read an excellent heart book and he retains almost everything he reads. And, did I mention - his IQ is above average!

I will tell you from experience – if you treat real estate education any less serious than heart surgery – it will show quickly in the results you get. In fact, investors who go broke in this business – or file bankruptcy, often suffer severe anxieties and will eventually need the services of a good heart doctor before they undo the mess they’ve created themselves. Are there any more questions about my books!

Tags: Fixing For Money // Add Comment »

My decision to lease a house to my tenant – and give him an option to purchase is somewhat different than most lease/option plans – and I do it for the following reasons:

1. To increase the monthly rental income on my larger more expensive houses (25-30%).

2. To secure a good paying tenant for 3 years.

3. Rent to a tenant who thinks more like an owner and will likely take much better care of my larger, more expensive houses.

4. Provides excellent selling profit – plus interest income.

I’m looking for a renter with adequate, verifiable income who for various reasons cannot qualify to finance a home! Likely credit problems – or lack of a down payment – often both.
My lease/option plan solves the two biggest problems facing most lease/option candidates – namely coming up with a down payment, and secondly, qualifying for a new mortgage to exercise the option.
My 36 month plan offers the lessee rent credits equal to the full amount of the down payment required. After the full lease period (36 months), I offer my tenant 2 different choices to finance the option sale with me. I’ll be the banker.

Tags: Success Secrets // Add Comment »

Many start-out investors must rely on their current fix-up job profits in order to acquire their next project. This is very common! Borrowing for a down payment or to payoff rehab debt makes good sense. What don’t make good sense and often happens — Investors will borrow the maximum amount they can. All the funds don’t get used for business — But even worse, the payment on the new borrowing turns the property into an alligator. That’s very bad, don’t do it!

For fix-up investors, newly created equity (after fix-up) is a prime source for quick cash. Every investor I’ve ever met needs cash. House fixers are well aware that fixin’ houses for yourself don’t provide a paycheck on Friday night like traditional W-2 jobs. Quite often, house fix-up investors must rely on their newly created equity for grocery store money.

After fix-up – it’s fairly easy to obtain a new loan or another loan to pullout all your cash, which includes the down payment and fix-up funds. In the strict sense – borrowing has little to do with profit-making. It has more to do with increasing your debt. However, it facilitates your forward movement to make profits! Without cash you cannot move forward; therefore, your investing would be stopped. Also, your overloaded credit cards will likely need relief.

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