Fixer Jay’s Mom & Pop Millionaire Blog

BECOME A BLUE JEANS MILLIONAIRE

There’s never been a better time to join ranks with “do-it-yourself’ real estate investors than right now – TODAY! From a pure financial standpoint, owning income-producing properties could easily turn out to be the smartest security decision you’ll ever make.

Tens of thousands of traditional jobs have simply vanished into thin air, while savings and retirement funds are siphoned away for everyday living expenses. Creating a long-term financial backup plan makes more sense today than ever before!

Investing for monthly income has hardly anything to do with the “topsy-turvy”, up and down real estate market. It’s not about qualifying for “hard to get” mortgages either. When you learn about this business, you’ll quickly discover that sellers are ones who will give you the special terms you need for cash flow earnings every month. By acquiring the right kind of properties, you’re not the least bit dependent on appreciation or victimized by sudden downturns that plague most new investors.

The investment business I’m talking about will allow you – the investor; to enjoy almost absolute control over all your earnings and future profits. This is extremely important! It’s the real key to investor success. Look around you today! Most workers have almost no control over their jobs – or their earnings. They must live in constant fear about the decisions of others – not a great confidence builder for your future, I’d say! It doesn’t take a lot of money to start, nor must you have a handyman background! Average working folks can become “blue jean millionaires” and build a future with bigger paydays, long-term profits and a guaranteed retirement.

Tags: Changing Careers by FixerJay
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 It’s always surprising to me that so many landlords I talk to don’t have the foggiest notion about what they should do if their tenant goes bonkers. It’s almost as if they think that once the house is rented out that’s it. Everyone is gonna live happily ever after. Folks, let me tell you right now, that’s hogwash! Plainly stated; it just doesn’t happen like that.

 

“Scuzzos will still slip through your check-points … ”

Any landlord who’s been around the block can tell you that qualifying a tenant on paper is not 100 percent fool-proof, even when a prospective renter presents you with a beautiful well-written application form, the kind where every blank line is filled in perfectly and you get all the right answers to the important questions. Quite often appli­cants have good references and flowery letters from their last landlord. Even so, the system is not perfect. Scuzzos will still slip through your check-points occasionally. When that happens you’ll need to erase your mistake quickly and painlessly as possible.

 

Recently a young landlord said to me, “Jay, I’m not much interested in learning how-to kick tenants out. That won’t make me any money. Renting my units faster is what brings in the big bucks. That’s what I want to learn to do better.” It’s quite obvious that my young landlord acquaintance does not yet understand there are basically two ways to make money in this business. Collecting more rent is what most people think of first. However, equally important is controlling or reducing expenses.

 

Let me ask you this question. Who is better off, the landlord who grosses $1000 every month and pays out $500 in expenses; or the owner who takes in $1 00,000 monthly, but pays out exactly the same amount for expenses? Obviously, it doesn’t do you much good to improve your gross earnings if you lose it out the back door to higher expenses. That’s something like trying to fix a leak in a ruptured water line by increasing the pressure. By the way, I didn’t just make that up. A friend of mine actually tried to do that instead of calling in a plumber. It didn’t work very well. He blew the water line apart in five different spots.

 

“Doing an eviction is not very glamorous. ”

Sometimes evictions don’t seem like hot shot investor work. However, I think it’s helpful to understand just how much money is involved. Eviction costs are not exactly the same as ordinary expenses to a landlord. They are more like paying double to fix the same problem. That’s the good news. The bad news is often they cost a great deal more than double. Why should they cost double or more you ask? The reason is because when you have an eviction going on; in 99 percent of the cases you’re not receiving rent payments. At the same time, your house is still occupied which stops you from generating new income from tenants who are willing to pay. The total effect of this combination, even without adding in the legal costs can be a very expensive proposi­tion for landlords.

 

” … evictions don’t seem like hot shot investor work. ”

Some may argue that eventually, when you get your default judgment, or assuming you will prevail in the courtroom, you’ll get all your money back. In most cases, the odds are more in your favor that a flock of geese will fly down your chimney and swim in your bathtub.

Tags: Managing Tenants and Toilets by FixerJay
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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.

 

” … there are unscrupulous landlords as well as naughty tenants.”

The Pitfalls of Management

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?

 

Professional property managers rarely act mostly they react.

The Keys to Good Management

Enforcement of the rules, whether civil code laws or your own house rules is the best way you develop a smooth running manage­ment operation. Preventative techniques are as important to managing tenants as they are for the doctor who manages your personal health. One of my main criticisms about professional property managers is that they rarely act-mostly they react. They’re always ready and willing to fix the busted door, but only after the horse is outta the barn.

Rent monies are life blood to apartment owners. Yet, I know many property manag­ers and owners alike who participate with their tenants each month in a silly little “rent collection ritual.” The tenant starts the game by saying the checks in the mail. Then the landlord begins calling every day or driving out to the property to inform the tenant he hasn’t received it yet. This can go on for weeks.

 

Don’t allow yourself to be part of this game. Use the rules already on the books: the state landlord-tenant civil laws and your rental contract terms agreed to by your tenant.

Action Keeps landlords One Jump Ahead

Landlords who learn to act before small problems become big will control most tenants. This strategy works very well for collecting rents and also for enforcing your tenant rules. Many landlords have too many rules. It’s better to keep your list of rules short and enforceable.

 

Would you rather be popular or profitable? You don’t have to be greedy to be a wealthy landlord. What you must be is a fair-minded business person. Fair-minded means that rents are collected in a timely manner and that your houses are maintained properly by the tenants who lease them. See how simple this stuff is.

You won’t be hated when you demand timely rents. Landlords that insist on timely rents are no different than cashiers in the supermarket.

Tags: Managing Tenants and Toilets by FixerJay
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Many people like the idea of investing in real estate but can’t seem to decide how or where to start. They attend seminars featuring a variety of investment options offered by many different lecturers. Quite often they leave not knowing exactly whose advice to follow.

 

My feeling is this: part-time investors or those just starting out need training and experience in about equal proportions. Stated another way, they don’t need a lot more education than they can use or apply. They need enough education and know-how to begin; and then on a continuing basis as they gain experience from doing it.

 

There is no quicker way to become an experienced real estate investor than to jump right in and buy real estate. Unfortunately, the kind of experience many get using this method is not the experience they need. Frequently beginners buy properties based mostly on looks. Invariably they pay too much. Paying too much coupled with having little or no experience can turn the American dream into a nightmare.

 

“Invariably they pay too much.”

Real estate investing requires many skills other than simply buying properties. Classrooms and books are important and necessary in order to learn technical informa­tion. However, there is absolutely no faster or better method to learn the practical side than doing it yourself. It’s called on the job training. This learning experience is best accomplished with properties that require some personal attention.

 

 

Rundown houses that need work are ideal candidates because they’re inexpensive and because perfection is not important. Most any work you do is likely to improve the property even if it lacks professional quality, and we all get better with experience. But we can only get experience by doing.

 

Fix-up jobs require a multitude of skills. The investor must purchase a property cheap enough to earn a profit. Fix-up investors will be involved with employees and contractors. They must develop a specific fix-up plan to fit within a pre-determined budget. Finally, they must choose and manage tenants for rentals or negotiate a buyer into a profitable sale.

Fix and Sell or Fix and Rent

Both strategies are “best,” depending on the individual. If you need the money from your first fix-up in order to continue investing, selling may be your only option.

Finding good properties is the most difficult task. Personally, when I find one that I can fix-up and increase rents to prod uce steady monthly income, it hurts me to sell it. Positive monthly income can quickly add to your wealth. I’m a firm believer in keeping the goose that lays golden eggs.

 

” … more houses are becoming fixers than are being fixed. “

The key is to start fixing and try both strategies yourself. Many investors start with filers, then over time gradually switch to other investment specialties. That’s a perfectly reasonable strategy. Others like myself develop a special knack for fix-up and land lording and tend to stay with it.

 

When you buy right, fixers are cheap. You should expect to pay 20-50 percent below regular market prices. The largest discounts will be earned when you buy the ugliest properties. Ugly rundown properties combined with people problems, such as divorcing owners and non-paying tenants who kick in walls, often provide even larger discounts.

 

By the time you’ve completed a fix-up project or two, You’ll have enough experience to deal with almost any real estate trans­action. And, your confidence level will increase at least 100 fold.

Tags: Getting Started Ranks First by FixerJay
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