Fixer Jay’s Mom & Pop Millionaire Blog

Like most successful investors, I suffered through a probationary period! That’s when there’s almost as good a chance of going broke as being successful. What finally saved my bacon was when I started buying the kind of properties that would earn enough income to pay me every month. That might not sound like much to some folks – but to me, it was the discovery that kept my investment career alive – and my faith intact!

I can tell you from experience – buying the right properties, in the right sequence, makes all the difference in the world. If you’re like me, cash flow is always the biggest concern! It took me several years and some seriously overloaded Visa cards before I gave up the notion that average three bedroom, American dream houses would set me free! They almost broke me instead! Don’t misunderstand me here – I’m not saying they’re not a good investment – I’m saying they don’t provide any cash flow! My dream was to be a full-time investor and have my real estate support me.

BUYING THE RIGHT PROPERTY FIRST

When you don’t have a lot of money – and you need cash flow rather quickly, you must invest in the kind of real estate that will produce it. Single houses can produce it someday – but not until the mortgages are paid! If I was lucky enough to earn $100 per house, not likely with a mortgage - I’d need more houses than I could ever afford just to earn pauper’s pay. Fortunately, there’s a “faster, better way!

The better way is to start with fixer-uppers first - and concentrate on cash flow. With fixer properties, you can force the value up with sweat equity (yours or somebody else’s). With fixer properties, you won’t get stuck in a holding pattern, waiting for appreciation or a turn-around economy. This is very important, if your goal is to create wealth during your lifetime so you can enjoy it yourself!

BUILDING WEALTH DURING YOUR LIFETIME

Once you have a few dollars to jingle – and a respectable cash flow, you are now in a position to acquire quality houses, so long as they’re close to break even. I could never move forward very fast until I figured out the sequence! Go for cash flow first – quality houses, second! At my Fixer camps – this is what I’ll show you how to do.
Fixer investors also enjoy another major advantage over all the other investors because there’s no up and down cycles to slow you down. Unlike the general housing market, the fix-up strategy never changes regardless of what the economy does. Although I currently own a number of American dream houses now – I don’t mind confessing – my fixer properties bought every single one of then

Tags: The Joy of Cash Flow Investing by FixerJay
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There are many good reasons why fixers are the perfect properties to begin a real estate investor career. However, leading the list is CASH FLOW. Fixer houses by far offer the best opportunities for small-time investors, without, much cash to spend, to acquire real estate with minimum down payments and still achieve cash flow quickly. No other kind of real estate I know of will do it!

CASH FLOW QUICKLY

It is reasonable to expect – after paying an average of 10% down that one can create a positive cash flow property within a relatively short period of time after the purchase. Obviously, the time it takes will depend on many factors, such as how long does the fix-up take – how much market value is added to the property and most certainly, the skills and aggressiveness of the investor-fixer.
I have learned from experience – cash flow is much easier to achieve buying small multiple residential properties, such as 2 or 3 houses on a single lot, several duplexes with a house or two, or any combination of these cluster type properties. I own many properties with 5 to 8 living units each. They are excellent cash flow producers a year or so after fix-up. My timetable for a complete turn around is 18 to 24 months.

LESS COMPETITION

Anytime there are fewer buyers who want something in a particular market, your odds for success are greatly increased. Competition is what drives up prices. Conversely, the lack of competition keeps prices down. It’s nearly impossible to purchase prime real estate at a discount – or expect to get any sort of a break on the terms. The reason: Too many buyers are willing to pay the asking price. Why would the seller need to discount?

There are basically only 2 methods to buy real estate at bargain prices:

Method #1

     Situations   Situations where you are the only potential buyer who knows about the deal (no competition),  and  the    seller is willing to accept your offer and terms without seeking outside bids (offers) from anyone else.where you are the only potential buyer who knows about the deal (no competition),  and  the    seller is willing to accept your offer and terms without seeking outside bids (offers) from anyone else.

Method #2

     Where the public knows about a property that’s available but cannot visualize its potential value – like after it’s all fixed up. They are therefore not buyers – only lookers.

Most students who seek my advice are not yet sophisticated enough to be in the information loop where they can benefit from Method # I. Two of the most common ways Method # 1 is used is by licensed real estate agents who buy their own listings – and by friends of probate attorneys who get a secret telephone call when an asset (real estate) needs to be disposed of quickly. In both cases, the public never finds out about the deal. Private deals avoid competition – therefore, the selling price don’t get bid up!
Method #2 is how most of my students will buy real estate. We shall focus in a market where properties are for sale. They are even advertised and certainly known to many potential buyers. However, 95% of all the potential buyers (the competition) see ugly rundown houses as junk- ~~ poor investment not even worth the asking price. Most will never make an offer and those who do will likely alienate sellers by insulting them with “low ball” offers. With 95% of the competition out of the game, the playing field is definitely tilted in our direction.

Tags: Fixing For Money by FixerJay
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Make no mistake about it – all the financial ducks are lining up in a row! We’re about to experience the mother of all buyer’s markets. Right now, the only question you should be asking yourself — What must I do to prepare myself so I can take advantage of all the bargains coming down the pike!

First, you must decide about buying the right kind of properties that will do you the most good. You want the kind that will start cranking out money in the shortest possible time! For most small-time investors, the right kind are small multiple unit properties with tenants who are already paying the bills. Owners who sell these kinds of properties today clearly understand they must provide seller financing in order to make a deal. Since mortgage money has all but dried up, you’ll get terms that will start you out with cash flow! Seller financing is about to enjoy its finest hour, so don’t miss the boat!

In order to seize these extraordinary opportunities, you must be ready and willing to oversee the customers who will ultimately make you rich. Some folks will tell you – there’s no money in land lording, so you’re better off to avoid it! I will tell you from experience, that’s a whole lot of baloney! As a matter of fact, it’s the renters who have made many of us rich. You should never intentionally avoid customers who are willing to pay you their hard earned money every month. To do so violates every sound business practice I know of!

Learning good land lording skills will put you in the driver’s seat for negotiating some super profitable bargains. Many cash flow properties already have decent paying tenants; but the buildings are run down and terribly mismanaged. Turning these under-performing properties into your own personal gold mine can be your ticket to long-term financial security. The only requirements to seize these golden opportunities will be your abilities to manage paying customers and negotiate transactions without traditional financing.

The window of opportunity is now! While financial markets are confused and frightened owners think the sky is falling. Now is the perfect time to strike. While it’s true that home prices have declined – it’s just the opposite for properties that generate income. Rents provide an ideal hedge against inflation. The key, of course, is to pounce on confused sellers before they figure out; the sky is still a long ways up!

To acquire the right properties, you must take over the sellers’ problems! After all, that’s likely the motivation for selling! This is where your management skills can earn you super paydays. My strategy is very simple, yet effective! Take over the seller’s short-term management problems in exchange for long-term financial benefits that will last you a lifetime and guarantee your retirement.

Successful investors who have attended my land lording seminar, MANAGING TENANTS & TOILETS, held once each year in November, will be he first ones to tell you they owe most of their success today to their ability to manage the customers who pay for their properties.

Tags: Vision of Opportunity by FixerJay
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When Beth Rosander attended my Fixer Camp in the early ’90’s, her situation was a bit more urgent than my typical students.  Recently divorced with two small children to raise and very limited support payments, Beth needed to earn additional income fast.  Further complicating her life, she lived near the San Francisco Bay Area amongst the highest priced houses in California.

On a positive note, Beth understood how fixing up houses could rapidly increase the value! She and her ex-husband had completely remodeled her 92-year-old house and nearly tripled its value.  That experience gave her the courage to continue without him.  She even learned how to tile a bathroom floor, she said –Well, maybe not perfect, but certainly acceptable!  Her main problem, she explained to me, was writing up the offers – plus finding additional money for down payments and fix-up.  That’s the reason she came to my Fixer Camp!

During her three days of training, Beth explained how she first had tried working at a local grocery store.  Her net income left over for living expenses after paying childcare, was $42 a week.  In San Francisco, that just about covers your parking bill.  Obviously, Beth decided rather quickly – she needed another way to earn a living where she could keep the children with her.  Her house remodeling experience seemed to be her only logical salvation!

At Fixer Camp, Beth learned everything she needed! She learned how to write up offers, how to estimate her fix-up costs and how to get financing to acquire more properties.

In May of 1993, Beth’s house fixing success came to the attention of San Francisco Examiner real estate columnist, Corrie M. Anders. Corrie’s half-page spread in the Sunday Examiner profiled several of her recent projects, including pictures. During an on-site interview, Beth explained how she fixed the roof and remodeled a bathroom that had a garden hose running from the into to fill the tub. She spent roughly $21,000 on materials and her helper, worked long days and nights herself for over month – then sold the place for a $40,000 profit – just ninety days after she started.

According to Corrie’s article, Beth’s average profits were about $30,000 per house, and that included a period of sluggish sales for several years after the Desert Storm invasion. Obviously, Beth’s fix-up ventures received more notoriety than most Fixer Camp students get – Still, it was her personal efforts that made things happen. Beth took what she learned at Fixer Camp, added the elbow grease and presto – along came her well-deserved profits!

If you were to interview Beth today (she married her house fixing helper), I’m almost certain she would tell you something like this – Learning the information you need from a teacher who does it himself will prove invaluable for you success. Naturally, it’s up to the students to make things happen – but leaving Fixer Camp with the knowledge about what to do back home can quickly put you ahead of the competition.

Tags: The Joy of Cash Flow Investing by FixerJay
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