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.

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!
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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.

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!

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.

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!

I recommend that all new investors become specialists! Naturally “fix-up” is my choice recommendation. The idea is to become the best at your specialty within your own investing community. Believe me, it doesn’t take long when you practice constantly — Soon you’ll be better than everyone around you. You now have the upper hand!

Later on you may branch out and do other kinds of investing — But in the early years, concentrate on being the very best at your specialty. It will provide your rock solid foundation and always serve you well throughout your career.

Down payments are traditionally less for older income units – even when they’re well kept and full of smiling tenants! 10% cash down is normally what most investors expect to pay. Many young start-outs with tons of energy to burn feel fortunate to come up with 10% cash. My problem is not really the low down pay­ment — It’s the matter of protection I’m concerned about.

When I sell property for a small cash down payment, I insist on securing my mortgage or note with not just the real estate I’m selling – but also, another property the buyer owns or quite often, his relatives own! For example, a young man wishes to purchase my small apartment with 10% cash down. He doesn’t own any other property, but Daddy agrees to help his son get started. Daddy owns a $200,000 home with a $100,000 first mortgage.

If I’m selling a $100,000 apartment for $10,000 cash down – I will simply record a 2nd mortgage on Dad’s house for an additional $10,000 as added security for me. No payments are required from Dad – and I will generally reconvey (release Dad’s house) after 60 months of faithful payments to me from Junior. Meanwhile if Junior goes bonkers – Dad’s house is on the hook for $10,000. Ain’t Dad great or what!!

To better under the power and profit potential of my Colony Concept; you can review the 15 minute video presentation by clicking to my home page. “The American Dream” presentation by 2 of my successful students should help you to better understand why colony houses can rip, snort and rumble. If your plans include flow now faster cash - or full-time investing with a worry-free retirement, do yourself a favor – study the numbers and the presentation very closely – you’ll be glad you did!

Exterior painting is one of the most produc­tive jobs on the fix-up list. It’s not unusual to spend $100 painting and get back $10,000 or more in added sale profits. You’re accom­plishing high leverage fix-up when you can spend one dollar – and get ten dollars back!