Fixer Jay’s Mom & Pop Millionaire Blog

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 by FixerJay
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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 by FixerJay
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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 by FixerJay
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Real estate agents are the eyes and ears of the real estate business. I’d be hard pressed indeed to think of any successful investors I know who got that way without benefiting from their services. At least 50 percent of all my business over many years has been directly involved with a real estate agent who was paid to make the transaction happen. I’ve had several situations where an agent referral to a non-listed property or a special tip about an owner who needed to sell was all it took to create a big pay day for me.

More than once I’ve heard real estate gurus tell their audiences that an excellent strategy or technique for getting rich is to completely avoid paying commissions. Certainly I’m not one to recommend throw­ing your money away, but I must tell you paying commissions should be helping you make more money; otherwise you need to re-think your investment plan. Even in the worst case situation for me, assuming I paid a full six percent commission, I would still have 94 percent of the value left for me-plus all the benefits I acquire with a high-profit property. To me, that doesn’t seem like such a bad trade-off.

No one will make you rich except you.

I would recommend that a new investor simply walk into five or six realty offices sit down with an agent who is on the floor and discuss the kind of properties you wish to acquire. Some agents will jump through hoops to help you. Others will shine you on. Personalities will naturally play a role. Some people you like-some you don’t.

The hard fact is that no one will make you rich except you. No agent will make you rich. No other person will do it for you. You alone must make it happen. However, real estate agents are powerful helpers if you will teach them what you want done. You must give them parameters regarding what constitutes a good deal for you. They must know what you will buy and how fast you can close the deal so they can get paid.

Tags: The Big Picture by FixerJay
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