Fixer Jay’s Mom & Pop Millionaire Blog

Many investors buy houses without the slightest idea about how they’ll make a profit! Others buy real estate and more or less figure that when it’s time to sell, profits will somehow automatically be there for them. Investing in this fashion is an easy way to fail. It’s too much specu­lation or guessing rather then investing.

When you have limited funds, like 95 percent of all my subscribers, you must make a thorough analysis or projection of future profits before you close escrow on every single purchase. You need to understand exactly how each investment will pay you back for owning it. One method is to explain it thoroughly to an unsympathetic spouse who would rather use the down payment for a trip to Disneyland. If you can pass this test, chances are you’ve already given considerable thought to the idea, which is exactly my point here!

My method is a very simple one which has served me well for a good many years. My tools consist of a yellow legal pad and a couple of pencils. I sketch out sort of a credit-debit schematic or cash-flow chart showing all the dollars I expect to spend in each year of my ownership. I also es­timate my income or profits for every year. These income figures represent all the monies I expect the property to pay me for my period of ownership.

Lastly, I estimate my future selling price and develop a realistic plan for making the sale. By going through this exercise, I’m forced to take a hard look at the various factors that contribute to a profitable investment. Of course, that is the main purpose of the exercise!

Take if from me, if you can’t show someone on paper how you intend to make your profits, chances are, you won’t!

Tags: Good Deals Created by You by FixerJay
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Unless you’re a cash buyer, good fi­nancing is absolutely essential to earning big profits. If you can’t offer decent fi­nancing when you decide to sell, you’ll end up making concessions to the buyer, which will greatly reduce your potential profits.

What I do, and what I recommend for you, is to mentally sell your property at the same time you are negotiating to buy it. In other words, think ahead to when and how you plan to market the property someday, specifically the kind of financing you’ll be able to offer to your buyer in the future.

If you agree to mortgages that can’t be assumed (due-on-sale clauses), you’ll restrict any future sales to a buyer who must qualify for new financing. If you agree to short-term notes or mortgages, most buyers will balk at assuming them. High mortgage payments are also re­strictive because buyers are concerned about cash flow.

The best kind of financing you can have, when it comes to making a future sale, is a long-term (20 to 30 years) seller carry-back mortgage without a due-on-sale provision. Also desirable are payments that are 50 per­cent or less than the current rental income along with a modest interest rate. This type of mortgage can easily be wrapped (wrap-around) by a new all-inclusive mortgage allowing the seller to earn extra profits on the interest spread. Also, avoid big income taxes from the sale by using installment reporting.

Tags: Success Secrets by FixerJay
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Buying for cash is one way you can get big discounts, especially in a buyers’ market. With good knowledge about your buying area, it’s not too difficult to purchase

$100,000 houses for $80-$85,000 cash! Every time you do it, you’ll make $15-$20,000 at closing! Five or six deals a year will earn you $100,000 in profits, plus $4,000 worth of monthly income! With cash flow and tax savings, you’ll likely earn 20 to 50 percent annually. And, with appre­ciation, it’s even higher. It’s a good sound plan. It’s safe and offers excellent earnings to investors who have the cash.

If you’re not quite ready to pay cash just yet, then it’s absolutely necessary that you learn an alternate strategy for profit-making. I call mine “The Poor Investor’s Plan for Profits.” It’s also a bit more complicated than buying for cash. But, if you do it right, you’ll end up just as wealthy as the investors who had money to start.

Rental Houses Pay the Grocery Bills

One of the biggest reasons I’ve kept my flock of rental houses over the years is because they provide me a guaranteed income. Having a reliable income allows me time to market my properties without being under the gun. There’s a tremendous disadvantage having to sell when you need the money to live on.

Waiting for Mr. Right can often be worth 20 to 40 per­cent more when you’re negotiating with a full stomach… Therefore, it’s always my standing advice: Buy a few good rental properties to start with. Get a monthly income established so you never look hungry when you’re selling. Buyers can always smell a starving seller a mile away.

Tags: Success Secrets by FixerJay
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NOTHING DOWN OFTEN EQUALS NOTHING

Every time I start talking about making profits at my seminars, someone always reminds me that all one needs to do is buy properties wholesale and sell them at retail!

The big problem is, buying low and selling high is not all that easy to do. In fact, it takes some real sound profit engineering to develop a money-making strategy. A good plan must have several common ingredients, such as proper timing, equity creation, good financing and a reasonable method to extract the profits. None of these can be left to chance if you intend to make any serious money investing in real estate.

Every once in a while even dummies make money in real estate! But take my advice, don’t give up your day job thinking it happens too often, because it doesn’t. A far more realistic approach is to learn exactly how and why real estate profits are made to begin with. If you will do this, you’ll be in a position to make money in good times and bad alike. Also, you won’t need to depend on inflation to make your profit. Inflation earnings should be a bonus for investing wisely.

Many neophyte investors have made the mistake of buying marked-up houses for no money down. They automatically assumed they could earn a profit because no cash was invested! With high mortgage payments and short-term balloon notes, their dreams of becoming rich tycoons quickly turned to nightmares instead. The “free lunch” strategy may work well for selling slick-covered books on cable TV, but in the real world, you won’t buy much value for nothing!

The important thing to remember is you can purchase properties with dollars or pay with your personal skills, but you must always pay. When you are negotiating to buy a property, stop and think about the deal as if you were the seller. Would you sell your real estate for nothing down if you thought someone would pay a normal down payment?

Tags: The Right Ingredients by FixerJay
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Ring savvy investors understand that time is much more valuable than money, Money is can be lost on a bum deal or two – but you can always earn it back! With time however, once it’s spent, you will never get it back!

Just for the record, let me say – my kind of investing is the year-round, all season type! I invest for cash flow! I don’t speculate or guess what the future might hold. Since I must live my life in the present, I prefer to own investments that pay me as I go along. Renting properties to tenants who pay all my bills may not seem very sexy or glamorous, but I’ve never once gone broke! The fact is – investing my way is about as fail-proof as any investment can be.

A SOLID FOUNDATION WILL GUARANTEE WEALTH

Investing my way is ideal for CAREER CHANGERS and folks who need to earn more income in a reasonable period of time. Also, it doesn’t cost an arm of a leg to acquire my kind of properties. As you will learn, older rundown properties earn much bigger profits and are likely to cost 3 or 4 times less than regular houses when purchased in small multiple groups or colonies. The math is real easy to understand. Renting a $50,000 dwelling for $695 per month will make you a whole lot richer – and much faster than renting a $200,000 house for $1000. You won’t need a calculator to figure which is best! Just try it for awhile and prove it to yourself.

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