Fixer Jay’s Mom & Pop Millionaire Blog

If you’re “dead-bang” serious about real estate investing like I am — It’s time to “roll out” right now! There has never been a better time in 30 years or more to take full advantage of the current housing market. It’s a very simple proposition: if you own houses – and if you buy them right - your customers (tenants) will pay them off and you’ll end up a lot richer than you ever imagined!

Another thing that always seems to happen — A few years down the road, you’ll look back and see how smart you were! People are always telling me how lucky I am! Jay bought a bunch of houses when they were dirt-cheap! It was perfect timing, they say. I just grin a little! After many years investing, I’ve found that almost any time is the perfect time. The only thing lucky about my wealth today is that I jumped in headfirst and started!

With over 40 years of practice, I’ve perfected everything I do! I’ve become a very skilled investor. I pay the right price. I purchase only the kind of properties that will earn me money - and I buy them in locations where my tenants desire to live. Naturally, I must set the deals up to start with! I pay a small down payment and make the necessary improvements to add value. After that, my customers pay for everything else till I own the property free and clear! That’s fair, isn’t it? About all this lucky business they talk about — I’m totally convinced that good luck happens when you make the right decisions for yourself.

Speaking of decisions — If you’ve decided you need a little help or you’d like to improve your investment skills, take a quick peek at my latest book in major bookstores January 2009. The title, “INVESTING IN GOOD MINE HOUSES.” Chapter 1, THE MILLIONAIRES RECIPE, will show you how to change your luck forever – guaranteed.

Tags: Fixing For Money, Success Secrets by FixerJay
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The quickest road to success is to specialize- YES, become a specialist! Doctors, teachers and musicians all benefit from specializing in professions or activities that encompass a much larger field. Doctors may know a great deal about the human body generally, but an MD who specializes in bones will likely have greater knowledge in that area of practice - and so it is with fix-up investors in the real estate business.

Real estate investing covers bare land, construction and development and both residential and commercial activities. Restoration, remodeling and fix up can involve any improved real estate. Each has its own range of costs and measurements of value to determine the feasibility. Since costs and values can vary greatly by location, as well as the particular use, there’s no “one size fits all formula” that works for real estate investing generally! Selecting a specialty and learning it well is much faster than trying to learn everything about all the various ways to invest.

One can argue the pros and cons about which way is best, but for the majority of folks, residential real estate; like in houses and the homes we live in, is the easiest to understand, and in my opinion, the best place for beginning investors to get their feet wet. Naturally, where to start also involves the economics - as in how much money will it take to invest? Here again, everyday working folks find themselves extremely limited! As an example; when I started, $20,000 sounded like all the money in the world.

However, $20,000, $50,000 or even $100,000 won’t make much difference if you don’t know where to spend it. Money doesn’t guarantee safety and a larger amount will disappear just as quick when you don’t know what you’re doing. By specializing in one particular area, you stand a far greater chance of spending whatever amount you have, wisely!

FIXER PROPERTIES INVOLVE LESS COMPETITION

The less people who want what you’re after, the easier it will be to acquire what you want. Nothing secret about that, it’s one of the basic laws of nature! Competition drives up both cost - and desirability. Ugliness is my number one price reducer! Most people tend to back away from anything that’s ugly! Also, most people do not possess the vision, or have the training to spot value in the midst of pure ugliness. Learning to judge value where others can’t, can earn you a fortune in the house fix-Up business. Naturally, you must possess the skills to fix the problems once you find the right property.

Sellers who own ugly rundown properties (income units) often find very few buyers willing to make serious offers because most are looking for attractive, trouble-free properties! Even if they do make an offer - it’s generally a “low ball” offer, which often insults the seller. Insulted sellers don’t make counter offers, which of course, stops the deal cold. Naturally, rundown properties are worth less, but many times a workable purchase agreement can be reached by first determining what benefits the seller will accept. Here again, it’s the fix-up buyer’s skills, rather than the amount of money that makes the purchase successful.

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Once you find an agent who seems like he or she talks your language!  And of course, demonstrates some honest action like jumping right in and finding you a few properties that seem to fit your “looking for” instructions — You’ll be off to a running start.

One thing to remember here - Both you and your agent are new to each other!  Don’t make the agent do all the work. You should help every way you can, especially in the “getting acquainted” mode.  For example: If the agent is showing you properties in fair condition and you have told him you want junkers.  Reiterate your instructions so you get what you want.  By helping your agent who is trying to help you. —  You’ll end up the big winner.
The benefits you’ll receive by taking the time to develop this relationship will be worth big bucks to you in the long term! Here are some of the most important ones.

1. Your agent has immediate “pipe-line” knowledge about when a bargain property is listed for sale - Either as a member of the multiple listing service or by networking through his associates and contacts.  You’ll get the information quickly so you can write an offer fast if the property is what you’re looking for.  Being first or near first is important!

2. A good agent will do “weeding-out” for you automatically once he or she becomes accustomed to what you really want.  My agent, Fred, always brings me everything I need for making an educated evaluation on each deal.  The information provided is normally a property profile, copies of existing promissory notes and either a filled out INCOME PROPERTY Analysis FORM (the kind in my fixer house book), at least the necessary data to fill one out.  This is valuable “time saving” work for an investor - Yet it’s needed before any intelligent buying decision can be made.  Obviously, it puts Fred closer to a commission if a purchase should result.

3. My agent provides a middleman “buffer” between the buyer and seller.  This is a valuable service to me or any real estate investor who owns multiple properties already. “Mom and Pop” real estate owners (the kind I buy most properties from) often feel intimidated negotiating with me one-on-one.  They seem to feel that because I own so many properties and am successful. They’ll automatically end of on the short end of the stick! It’s a perception that’s hard to eliminate regardless of whether it’s true or not.  Fred can generally diffuse (this problem for me in his capacity as a neutral third party. Sellers often feel that a licensed person will be more sensitive to their needs, as opposed to direct, face-to-face negotiating with a “ring-savvy” buyer.

4. A good agent will never let the commission block a sale. The good ones are creative! Often they’ll take a fraction of what they have coming in order to close the sale. They’ll let you pay the balance later on, perhaps in monthly payments.  My first agent, Merv, would allow me to pay him 50% of his commission at closing and for the balance he agreed to promissory notes, anywhere from $50 to $250 per month, depending on my projected cash flow.  At one point I was paying monthly commissions of $1250 to Merv.  In addition to helping me, Merv was very happy to have the steady monthly income, plus 08% interest.

5. A good agent can put you in contact with moneylenders, both private “hard money” guys and institutional lenders with programs that fit what you’re doing.  Lenders shop real estate offices looking for qualified buyers among their clients.  This is a valuable benefit to investors who are always in need of funds for upgrading and acquisitions.  Naturally you and your project must qualify in order to take advantage here. Nonetheless, money is always the ammunition that keeps investors in the hunt.

As you might guess - The benefits must flow both ways between the agent and investor here’s what you shouldn’t do if you want to develop a profitable relationship!

A. Don’t chippy around! Use your agent for all your transactions unless you have special agreements or exceptions agreed upon.  Loyalty will move mountains.

B. Don’t try to squeeze the commissions. If you are like me, that is, you negotiate commissions, do it before the agent goes to work!  Not after the deal is written up and in escrow.

C. Don’t send agents on “wild goose” chases!  The veterans will dump you if you try.  But don’t even do it to the inexperienced dummies.  Soon they’ll catch on and will have nothing more to do with you.  I’ve heard “so-called” real estate lecturers tell novices to instruct their agents to draft up and present “low-ball” shotgun offers to purchase properties from the multiple listing book.  Ask any respectable agent what he thinks of that advice! Take it from me; don’t waste your agent’s time with such nonsense.

D. Don’t make a ton of offers without ever closing anything. No agent can survive without “paydays” same as you. Take better aim so you’ll hit the target - Close the deals.

E. When other real estate agents call you direct - Always refer them to your agent.  Also, some sellers will insist on dealing direct.  They don’t want to involve an agent! That’s fine, but tell your own agent about the exception. Sometimes I pay Fred a small fee $500-1000 to help me do the legwork in the background.  If you take good care of your agent, you will benefit the most in the long run, believe me!

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You need to define what you want to do. Do you want to buy one or two fixers and sell them for cash or are you going to buy, fix up and keep them for longer-term profits? Don’t just make this a goal you will do SOMEDAY. If you focus on getting a few houses and devote some effort, you will do far better than just dreaming of buying them SOMEDAY. Have you ever noticed that if you want to know the time, you will see clocks; if you are hungry you will see places to eat? The same is true if you are focused on buying houses, you will find them.

Plot out how much money you want to make this year, next year and in 5 years. When I decided to go full time, I started buying houses one at a time and realized that this approach was taking too long. I needed to speed things up if I was going to make my living as a full time investor.  So I changed my focus to buying groups of little houses and cottages.  Again, you will see, that when you change your focus you will start to fine what you are focusing on, just like seeing the clock when you are looking for the time.
Why did I try to buy groups of houses on one parcel?  I discovered the price per house in a group was almost always cheaper than the price of an individual house, and they rented for the same amount as a house on its own lot.  I also found that some of these groups of older houses were not real easy to finance through traditional lenders. Now you ask yourself, how would I buy them if! Can’t get them financed? The answer is that you can always find the financing for a deal, but maybe this financing has to come from the seller.   If I can’t get financing from a bank, and I don’t have a huge bag of money to pay all cash to the seller, and there is not a line of people waiting to buy the property,  the seller may be forced to carry the financing.  This can be good for you because maybe you can get flexible terms or interest rates, and good for the seller because he can sell his property quickly and not have the delays and headaches of waiting for appraisals, approvals, inspections, etc.

WHAT SEEDS DO YOU HAVE TO PLANT

Take an inventory of the talents and resources that you have.  Do you have any money to buy some houses now or do you have nothing? Do you have equity in your home that you may borrow on, a savings plan at work you may tap, or maybe an IRA you want to use?  Now, I am not telling you to invest your retirement savings into real estate. I am just suggesting that you at least take an inventory of what you have.

When I bought a group of 24 houses on Boulder Way in  Sacramento,  California, I used my IRA.  I paid the 10% penalty and just incorporated the amount of the penalty into the purchase price of the houses. The property expenses offset the tax on the proceeds.  The cash flow from the houses paid a whole lot more than the interest that I was getting in the IRA account.  Also, it did not take a very long time for me to clean up the property, put in better tenants, raise the rents and increase the value of the property many times more than the amount of IRA money that I originally invested.

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One of the best ways to sell single-family houses anywhere and almost anytime is with lease options. My special lease option works in good times or bad, regardless of an up and down economy. You’ll find my lease option is different than most selling options because I’ve eliminated the two biggest reasons why most lease options fall apart. Naturally, my lease option agreement is designed to fit my own special needs, but there are excellent benefits for both sides. Options designed with my plan can be a good solid money-maker - plus, they provide an excellent opportunity for weak buyers to become property owners.

As with all my real estate transaction- it’s the benefits that make the deal work. Benefits for both parties must be attractive and desirable, otherwise - who wants to deal? Selling with a lease option the way I do is not dependent on a good economy and works regardless of whether banks are making mortgages or not! Here again, as with most of my real estate transactions - I will control all the moving parts! Once the parties agree, there will be no surprises later on caused by events that I can’t control.

My typical transaction involves a house with a market value of $250,000 that generally rents for $900 per month in my town. The rent to value ratio is only .0036 per month - or 4.32% annual return (12 months x .36 = 32%). Obviously, from a cash flow standpoint, there’s no contest when it comes to renting cheap inexpensive houses versus larger homes with acres) 0f carpet. Quite often people say to me — Cash flow is not everything, ya know! I agree - but it’s still a long ways ahead of whatever’s in second place! Remember I told you - cash flow is my primary motivation, but here are other benefits for me as well. Here are the most important to me

     1. CASH FLOW - HIGHER RENTS - 25-30% RANGE

     2. TOP SELLING PRICE - SOMETIMES 110%

     3. LONGER TERM TENANT - 3 YEAR MINIMUM

    4. BETTER PROPERTY UPKEEP - MAINTENANCE

    5. INTEREST INCOME, LONG-TERM CARRYBACK MORTGAGE

My lease options are designed for a period of three years. Tenants must lease my house for the full 36 months - then make their choice either to buy the property or terminate the lease. I do not extend my leases since there is no reason why my tenant cannot follow through and complete the purchase. The reason for 36 months is because that’s how long it will take my leasing customers to accumulate the down payment from the monthly rent credits I allow him for that purpose.

Tags: Success Secrets by FixerJay
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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 them! Join me at my next House Fixer Camp, September 19 - 20 21.   I’ll teach you how to do the same thing yourself. Call right now to reserve your seat–- 1-800-722-2550.

Tags: Fixing For Money, Success Secrets by FixerJay
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Viewers seem to be fascinated with Fixer-Jay student Don Collins.  Many have asked Don to share his fix-up knowledge about kitchens.  Is it Possible to fix-up rental house kitchen’s economically?  Following is Don’s inexpensive (Cheap) checklist for kitchen’s and laundry rooms.

Kitchens are the most important rooms and quite often the most expensive. These minimum fix-up requirements are necessary to product am attractive functional kitchen.

12 Item checklists follows:

 Kitchen Faucet: and stops must work easily or be replaced.

SINKS : Replace ugly sinks with chips and  dings.

ALUMINUM SINKS: are best for economy rentals.

COUNTER TOPS: Replace damaged work countertops with redi-made Formica tops.

CABINET’S:  Re-work,  don’t replace unless impossible to fix or repair them.  Finish with interior semi-gloss ·paint.  Add new pulls if needed.

KITCHEN RANGE:  Furnish good used or new economy model kitchen range.

DOORS : All interior doors and key-sets must work properly.  Also check cabinet doors.  Replace pulls and catches as needed.

ELECTRICAL:  Decorative lighting fixtures add charm. All switches, outlets must work properly.  Test each!  Do not allow electrical outlets within 36″ of sink and faucet. Make sure garbage disposal unit works, otherwise replace.

WALLS:  Fill holes, repair as needed. Then paint with good washable interior (semi-gloss) latex white.

FLO O R S:   Must be clean and attractive.  Repair damage of possible.  Remove good tiles from non-visible areas to replace damaged tile.  If repairs not feasible, replace with competitive grade (FHA standard) linoleum.

WINDOWS:  Must open and close properly.  Must have locks.  If older wooden frame windows involved, consider replacement.  Single-hung or sliders can be obtained to fit existing framing.

FIXTURES : Towel bars, paper roll hangers and a telephone jack are inexpensive items people look for in the kitchen.

CURTAINS/WINDOW COVERINGS : Window dressing (inexpensive) provides a “finishing touch”. Colorful curtains or plastic mini-blinds are suitable choices.

FIXING HOUSES LANUDRY ROOM - PORCHES - GARAGES CHECKLIST

WASHER/ DRYER: Make sure washer and dryer have safe working electrical receptacles. 220-volt dryer - 110-volt dryer.

WINDOWS: Windows must open and close properly - equipped with locks.

FA U C E S / VALVES :  Laundry room faucets must be in good condition. Standpipe or laundry tray is needed for washer discharge hose.

DOORS:  Exterior doors must be in good condition and have entry key set with deadbolt for security.  Key locks to match other entrance doors.  One key for all doors is cost saver and much more convenient for owners and tenants alike.

PAINTING: Rooms must be clean, fresh looking and painted.Use semi-gloss water-base latex. Medium grade, off-white is best. White paint gives rooms large appearance and adds brightness. The opposite is true with darker colors. 

SHELVING:  Shelving and cabinets are needed in laundry room. One (1) set double-door wall cabinets, 36″ x 24″ (birch veneer), are economical and very useful. Same goes for base cabinets. Formica, ready-made top can be an attractive addition to laundry rooms and storage areas.

ELE C T RI AL:  Check for exposed wiring. Cover wires with plastic guard or wooden molding to avoid damage. Porches should have adequate lighting, also, exterior light fixture outside entry door.

FLOORS:  Wood or concrete floors can be painted (laundry room and porches). Battleship gray is excellent color choice! Roll vinyl linoleum is recommended for newer houses where “classier” job is called for.

Tags: Success Secrets by FixerJay
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The best way to begin your search for Mr. or Mrs. Right is to visit the local real estate offices in the area where you plan to invest.  Ask the receptionist if she knows which agent sells the most apartment buildings or income properties. Get yourself introduced and tell the agent exactly what you’re trying to accomplish. The interview will be your opportunity to learn what the agent thinks he can do for you! 

But remember, he must know exactly what you want done in order to respond in a meaningful way.
Just like a budding romance, the first thing that has to work is chemistry!  It will do you no good in the long run to force yourself into working with an agent who disgusts you no matter how good you think he or she may be. Obnoxious agents are best left to service obnoxious house buyers since there’s no shortage or either one out there! I mention this because it’s very important to develop a relationship that can last a long time.  Lasting together is much easier when you like each other.

AGENT’S KNOWLEDGE ABOUT THE DEAL IS THE KEY

Try and be as specific as you can.  In my situation, I’m interested in “fixer-type”,  rundown properties.  I prefer detached houses on a single lot.  For example: 10 or 12 older houses on an acre of land would be something I’m very interested in.  I’m, also looking for properties with owner financing I’m particularly interested in properties that have several private notes or mortgages that I can assume.  Deferred maintenance (rundown),  problem tenants and properties that need major clean up are my specialty.  I wish to avoid new bank financing whenever possible and I’m trying to purchase properties with 10% cash down.  I can also add notes or other properties in trade.

This description about what I’m looking for and my special preferences should be enough to give most any agent a fairly decent idea of what I’m in the market for. Naturally, the price will have to fit the deal, but don’t ever forget; the asking price seldom has much to do with the final purchase price, particularly in the fixer business.

TRAINING YOUR PERSONAL AGENT PAYS OFF

A good agent will do “weeding out” for you automatically once he or she becomes accustomed to what you really want.  Fred always brings me everything I need for making an educated evaluation on each deal.  The information provided is normally A PROPERTY PROFILE, copies of EXISTING PROMISSORY NOTES and either a filled out INCOME PROPERTY ANALYSIS FORM (the kind in my fixer house book), at least the necessary data to fill one out.  He verifies rents, vacancies and liens.  This is valuable “time saving” work for an investor, yet it’s needed before any intelligent buying decision can be made. All this stuff takes time and it costs Fred money.  The only way he gets paid back is if I buy the property.

Fred don’t make a lot of dry runs. He knows what I want and determines quickly if a property has the right stuff. How did Fred get so smart?  How did he ever learn this detective business anyway?  When Fred and I started, we spent a lot of time discussing what I wanted! Investors must be very clear about which properties they will buy when one comes along; otherwise agents will attempt to show them everything.

NEVER SEND YOUR AGENT ON WILD GOOSE CHASES

Agents won’t hang around you if you’re just a LOOKY-LOO.  That’s a person who wants to see everything but nothing ever seems to meet his approval.  No agent worth his salt can afford that nonsense!  Fred works for me for one simple reason — It’s profitable!  He knows I can close fast if he does his job.  Fred’s job is to know exactly what I will buy.  He don’t call me about every property for sale in my town.  A good agent will immediately qualify the property to determine if it has potential.  Fred knows I don’t normally want deals where new bank financing is required.  He also knows I want sellers who will carry paper and that I rank small “leper-type” properties, like 4 to 6 houses on a single lot or a bunch of ugly rundown duplexes at the top of my buying list.  When he hears about these kinds of properties, he acts quickly!

Real estate agents are the EYES and EARS of the real estate business! 96% of all sales and trades involve licensed sales persons and their brokers.  It would be very foolish indeed to harbor any serious notions about excluding them from your investment plans.  The best thing you can do for yourself is to diligently begin searching for a good one.

Tags: Fixing For Money, Success Secrets by FixerJay
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 Fixer properties should always be fixed outside before inside.  The reason: Potential customers (tenants & buyers) judge a property on the basis of what they see when they drive by.  Doing fix-up where the property is located on a main thoroughfare or a heavily traveled road—this strategy becomes even more important.  Always remember, the world judges almost everything on looks, ugly houses included.

STUDENT DON COLLINS SHARES HIS EXPERIENCES

PAINTING EXTERIOR

Painting changes the appearance of a property overnight. It’s important to do it first. Use off-white, cream or any light color on body of house. For trim, eave boards, windows, trim around doors and frames, can be a dark color like brown, maroon or charcoal for sharp appearance. Use medium grade exterior latex after scrapping (wire brush) any peeling paint. A latex primer coat may be needed on older wooden surfaces.

LAWN’S & PLANT’S

 Tenants and buyers like green grass and flowering plants. I’ve found that even watered weeds; mowed and trimmed, look enough like lawn to pass for lawn! Toss out some lawn seed to thicken the stuff! If there is no lawn, plant one and water several times each day while you’re working inside the house.  Also, plant a couple fast growing trees if none exist.  Fruitless mulberry or Modesto ash will do the trick.  Shrubs and bushes add a great deal of hominess.  Pyracanthas and flowering oleanders are fast growing and nearly childproof.  Even repeated relief visits by the neighbor dog packs won’t hinder their growth. Pyracanthas have stickers, which deter kids from plucking them up. They stay green and sprout colorful red berries “in season”.  Oleanders make good dividers and add privacy.  They grow faster than baby Dobermans and can survive under the affectionate care of most tenants.

WHITE PICKET FENCES 

 Picket fences add a truckload of street appeal to most any property. Street appeal is easy to convert to cash. Both renters and buyers are Impressed!  White Picket fences create the ultimate feeling of hominess.  I build them 36″ high, with pointed pickets!  Sharp points discourage high jumping for all but the very bravest kids. I use 4′ posts buried 12″ and cemented - 8′ apart! Use metal joist hangers to secure parallel 2 x 4’s - 12″ and 30″ off the ground. Lastly, nail on 1″ x 4″ cedar pickets, spaced 4″ apart - paint white.  Gates are optional.

SHUTTERS & WINDOW TRIM

Just like the old western movie sets - “What- people see is how they judge”.  Renters and buyers alike are generally impressed — Or they’re not as they’re getting out of their car!  The first 15 seconds is more important than the next 15 minutes.  Your house is not unlike a propped up movie set.  It must show very well from the front, so that’s where you “gussie it up”, right in the front where it shows.  Shutters, even those fake plastic ones add sizzle, especially if the windows on each end of the house are the same size. If not, window surround (trim) like 1″ x 6″ cedar boards around windows; paint in a trim color adds extra class for little cost.  Facia boards covering the rafter ends give a finished look to any house. Again, paint in the trim color.  Partially enclosing a front entrance porch or stoop often adds much to looks. Extending the roof over an uncovered porch and enclosing with pre-made 4 x 8 redwood lattice panels, painted two-tone can “spruce up” the appearance of a house with the blahs.

ROOFS

 If the street-side of the roof is worn and ugly, it seriously distracts from curb appeal! If my budget can stand it, I will likely have the street-side of the roof replaced. Leave the back till later and patch it for a while. Hardly anyone ever watches what goes down “out back”. If it’s out of sight, it’s out of mind — Nine times out of ten.

REAR YARD FENCES FOR PRIVACY

I like fences — Tenants and buyers like fences. You can rent average houses for 10% more if they have rear fences that will keep kids and dogs incarcerated.  Mothers understand the value when they first drive up to do business.  The biggest problem is cost - 6′ board fences are not cheap. If you don’t have the budget to do back yard fencing, wait until you do. But don’t rob front yard money under any circumstances. Back yards rank way below front yards and appearance.

Tags: Success Secrets by FixerJay
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Many investors like myself start out buying real estate to either keep for rental properties or to hold just long enough to re-sell at a reasonable profit! A large percentage of investors will find it necessary to carry back mortgages (promissory notes) for much of their equity in order to facilitate sales. Obviously, it’s much easier to sell properties when the seller offers good owner financing. It’s also easier to “jack up” the price when good terms and seller financing are offered!

As a result of these “carryback transactions” — Many small-time investors end up with “big time” note payments coming in after they sell all their properties. It’s kind of like a natural progression for investors — Transitioning from active daily management to a once-a-month trek to the mailbox!

HOW TO LIVE LIKE A KING ON A $1600 PENSION

A friend of mine, named -Sheldon, bought houses while he worked for IBM fixing computers! Sheldon recently sold his last two 4-unit buildings. He retired from IBM nearly two years ago. His retirement check from IBM is $1600 per month. His carryback notes from investing are $9,500. Sheldon will be the first to agree — Note payments coming in every month are very green indeed! Sheldon claims the note payments spend just as well as the IBM checks!

The bad news about selling all your properties with carryback financing is that you might not be in a position to pay all cash to buy a yacht, but the good news is –It won’t matter very much because they’ll sell it to you anyway. Exactly the same way you sold your houses!

ADDING EXTRA SAFETY TO SELLER CARRYBACK NOTES

It’s extremely important that you protect your backside when you sell properties and carry back the financing! This is very important because you don’t want to lose big bucks takings back (foreclosing) a property if the buyer can’t collect his rents and allows the houses to get trashed! This is the biggest concern for investors like myself who specialize in selling at tip-top prices with low (10%) down payments and easy-pay monthly terms. In order to protect myself, I use what I call my “2-FER” PROTECTION PLAN. The name comes from the 2 for the price of 1 sales used by major department stores to entice buyers! For example, stores will offer 2 pair of men’s jeans for the price of only 1 pair. The store jargon for this type of sale is a 2-fer sale.

Basically, what I need in exchange for selling properties with low cash down payment and EZ customized terms is more security! I want additional collateral, besides the property I’m selling. This can be easily accomplished if my buyer owns other real estate with equity and is willing to allow me to place a temporary mortgage on that property!

Most buyers, particularly “first timers”, are willing to accept this condition in exchange for the liberal purchase terms I offer! I have even recorded several additional collateral mortgages on the homes of my buyer’s parents! Obviously, it takes some convincing, but it generally always works. Here’s how a conversation might sound when I’m explaining the proposition to a buyer.

STICK TO THE FACTS AND SELL THE PLAN

Look Mr. Buyer, I’m more than happy to sell you my choice property (remember folks, I only sell fixed-up properties that look good), for very little money down! (Usually 10%) And, I’m also perfectly willing to give you good seller financing with payments you’ll be able to handle every month! I want you to be successful after you buy the property from me. The last thing I want is a messed-up property back! Now here’s my problem — 10% down is not really enough to protect me if things don’t work out for you! It could easily cost me 10% and more if I had to foreclose and fix-up the property again! What I need from you, Mr. Buyer, is a little more protection.

Let me suggest a plan that won’t cost you a dime! I will place a temporary mortgage on your residence (or other suitable property) for the amount of $50,000. There will be no payments and no interest charges on this mortgage! After you make 60 payments on my carryback note, I’ll instruct the title company to automatically remove the mortgage on your home! In other words, Mr. Buyer, you’ll be pledging an extra $ 50,000 worth of security to assure me that you will keep your promise to make the payments on my property — At least the first 60 months anyway!

BUYERS CAN BENEFIT BUT THE SELLER GETS PROTECTION

In case you’re wondering why would any buyer do this, the reason is quite simple. They will do it to get the low down payment deal with my EZ pay seller financing. After all, if my buyer does nothing more than what he promises to do anyway - the extra mortgage can do him no harm. If he doesn’t, however, I can foreclose on two mortgages instead of only one. Remember, the 2 pair of jeans for the price of one! Just substitute mortgages for jeans and you’ll fully understand how my 2-fer plan works to protect me.

I have no set rules about 60 months or $50,000 worth of additional collateral! You will need to evaluate your own level of risk. There are some situations where taking back a property would be beneficial to me - others not so. In almost all situations I would come out ahead if I were forced to foreclose on both mortgages. As a practical matter, if the buyer of your property turns out to be a flake, chances are you’d be paid the $50,000 added collateral amount and get your sale property back.

Tags: Fixing For Money, Success Secrets by FixerJay
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