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.

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When my eyesight was just a little bit sharper than it is today, I could shoot a fairly respectable game of billiards. If you know anything about shooting billiards or pool, then you probably already know that position is what makes a winning pool player.

Getting Good Position

Each time you shoot a ball in the pocket, you must concern yourself with where the cue ball (the one you shoot) ends up so you’ll have a clear unobstructed shot at the next ball. That’s called getting good position. When you don’t have good position, chances are you won’t make your next shot. If you don’t, then you lose your turn as the shooter to your opponent.

Why settle for one shot deals?

Obviously, when you miss your shot, you’re no longer in control of the game.

Real estate investing is a lot like playing billiards. You can settle for buying properties with very limited potential (one shot deals) or you can position yourself to earn bigger prof­its by acquiring the kind of real estate that pays off in several different ways. Obviously, your chances of being a winner are greatly increased when you can make money a vari­ety of different ways with the same real estate.

Under-Performers

Buying rundown properties or “under­performers” is the quickest way to build CASH FLOW and EQUITY. The main reasons are: you can purchase at discount prices, and rundown properties are generally rented out for less than their fixed-up potential. Often this allows for a fast round of rent increases. There is generally visible evidence of why properties are under-performing.

Solve Problems

As a buyer you can reap big benefits if you are willing and able to help solve distressed seller’s problems. In the process, you can build large equities quickly that might other- wise take years to develop with non-fixer real estate. This technique is known as “adding value” and it’s especially suited for new inves­tors without much money to start with.

The Kind of Properties You Should look For

The kind of properties you should look for will generally fall into one of the following categories:

1. Rundown and Ugly: No maintenance being done.

2. Bad Tenants: Junk cars, motorcycles and lots of Visitors.

3. Half-empty Properties: Tall weeds, garbage on grounds, unsightly.

4. Financial Problems: Foreclosure, bankruptcy and bank repos,

5. Partially Completed Buildings: Activity stopped lack of funds.

The reason you are looking for ugly, dis­tressed and financially-bust type properties is that they represent serious problems for their owners. The idea is to use your time and your personal efforts to fix these problems in lieu of regular cash down payments.

Corrected problems have cash values. Often the price to correct a problem will amount to a much higher dollar value than the normal cash down payment might have been. The point is, your Willingness and personal ability to fix problems for others can create a very profitable opportunity for you. Many investors, including myself, have used this wealth-building technique to quickly develop large real estate portfolios. It is the perfect solution for anyone without down payment cash – which includes most of us when we’re just starting out.

What Kind of Sellers Own Rundown Properties?

The following list will give you some idea of sellers most likely to own distressed real estate and who are willing to sell.

A.     Out-of town owners

B.     Owners with financial problems

C.    Family problems (divorce, death, life-style changes)

D.    For sale by owners ads (all newspapers)

E.     Owners who have lost jobs

F.     Elderly or disabled

G.    Inherited property owners

H.     Owners who advertise lease options or even houses for rent

I.         Job transfers – owner moved, now has two house payments

Tags: Vision of Opportunity by FixerJay
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I am a firm believer that the world is divided into three separate groups of people those who make things happen, people who watch what happens and those who wonder what happened! Do-it-yourself investing requires that you be a part of the first group. It’s not good enough to wait and wonder if you expect to be successful doing this stuff!

My message to investors is this — Nothing is going to happen for you unless you make it happen! It’s always been that way – always will! Because real estate investing offers such a wide variety of profit making opportunities beyond simply buying and selling properties – investors should never find themselves bogged down in a position where they can’t do something to improve their net worth! For example; I don’t concentrate on selling when it’s a buyer’s market! That means buyers have all the advantage – there are too many properties available for too few buyers who want them! When the situation reverses – that’s when I start to think about selling. Obviously, fewer properties with more buyers means a higher selling price for me. Meanwhile, I can work on other ways to improve my real estate wealth! Perhaps my favorite is the local HUD grant funded rental housing program — Sometimes called the matching funds program.

UNCLE SAM STILL HAS MONEY FOR ECONOMY HOUSES

While much of the traditional real estate activity has slowed down like the economy, investors can still find high profit investment opportunities. One such bright spot is government assisted low-income rental housing rehabilitation. The program is available nationwide! .

Grant funding is the governments most active program to assist landlord owners in fixing up sub-standard rental properties – making them available to lower income-subsidized tenants. What makes this program so attractive to property owners is — Grant funds are free money. That’s a big difference from loan funds which must be paid back. Free money is the government’s “dangling carrot” to attract property owner participants. If you learn the ropes and do this right, I’ll assure you it’s well worth the time and effort it takes working your way through the “red tape”.

HOW TO GET STARTED FROM SCRATCH

The first step is this! Visit your local city/county-housing department, often called the Housing Authority of Housing Assistance Office. Incorporated cities generally have their own housing department under the direction of the public works official. In rural communities the county performs the same function.

For example, in my area, Shasta County, California, the county population is approximately 200,000. My town has nearly 100,000 population. I deal with the city primarily because most of my properties are within the city limits. Outside the city limits is county jurisdiction. Quite often there are big differences between the two government agencies, even though their funding source is exactly the same. One significant difference is worth mentioning here! Within my city limits, property owners like myself, are not allowed to perform grant funded rehab (fix-up) work on their own properties! They may, however, if they’re licensed contractors and are approved to bid on city housing projects.

In the county jurisdiction, the rules are not nearly so strict! I am allowed to do all rehab work on my houses, so long as I can convince the county housing authority that I am responsible and that I have the necessary “know-how” to complete the work. Shasta County is also much more liberal when it comes to obtaining building permits associated with their low income housing projects. Only extensive work would require a permit for Hud rehab jobs.

The main reason I’m passing this information along, is to make you fully aware that local housing departments differ a great deal in their methods of administering housing rehab funds. It will be to your advantage to search out all the information and rules concerning your own particular area before you formulate a plan of action. In summary; first go visit the housing authority! Ask for all information about grant rehab funding for landlords. Ask how it works! Finally, get a map of the area where the city or county wants to apply their funding. I’ve found it’s usually in the older-rundown sections of the city. That’s where rehab is needed the most.

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Besides more monthly income, real estate investors who subscribe to my investment strategies, buying the kind of income properties that produce cash flow every month - now comes the best news of all. Nationally, home construction and apartment building has slowed to 790,000 units, down from an average of 2 million units. This is a record setting low dating back more than 50 years since they began keeping track!

You might be asking yourself — What’s this got to do with me? Nothing if you don’t own rental houses – but if you do, like most of my subscribers, then your stock just went up “sky high” because your houses are turning to pure gold. It’s like the old saying goes — They ain’t making ‘em any more, they’re a lot more scarce, which of course, bumps up the value.

The record low construction pace is only a tiny part of the rental housing crisis however, because the lion’s share of new units are custom homes not affordable to the majority of renters. Once again, the landlords who own affordable rental properties are gonna prosper big time – but there’s also a tremendous opportunity brewing if you don’t yet own properties!

It’s also a very unique opportunity! First, the economy is down, lending is in the dumper, the big bubble - or the “American Dream Home” has burst wide open at the seams! The real estate market has never seen worse times in at least 20 years or so. And yet, Don, Beth, Silva and Dan, all my students, will tell you flat out, they’re prospering! Times have never been better when you ask them! Are they all smokin’ funny cigarettes, or what?

The truth is, they never bought “bubble houses” so there’s nothing to burst! They don’t finance their properties with regular bank mortgages, so FICO scores and lending policies are of no consequence. Over the years, 84% of all my investment property financing has been from the sellers who sold me their properties. If I were just starting out today during this current economic meltdown - with no commercial loans even available, I’m certain that all my mortgages would be 100% seller financing!

What’s different about Don, Beth, Silva, Dan and myself is that we only invest in houses that pay us more money every month than we spend on them. In plain old fashion terms; that’s called cash flow – a term that somehow escaped in the planning for many bankrupt house investors. One strategy, or one sentence to be more exact, that I’ve always stressed at my seminars — Buy only the kind of properties that the largest percentage of renters in your area can afford to rent from you. -It will make you rich!

I’ve always felt that my investments should pay for a better) life! I’ve also believed that my houses would always provide me with financial shelter no matter what happens to the rest of the economy. So far I’ve not been disappointed! I’ve got the best retirement plan money can buy!

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Back in the mid 1990’s for almost 8 years in a row there was hardly a smidgen of appreciation in my hometown. Both housing prices and the cost to rent stayed about the same. Then suddenly, the wheels came off! Home prices doubled, rents shot up by 50% and vacancies dried up to almost none!

It don’t take a rocket scientist to figure out when you own a bunch of houses like I do – every morning it’s like gettin’ up to a brand new Christmas every day. Everything to do with real estate values had simply gone nuts! In most types of business, one might ask — What have you done differently? I almost feel guilty when I tell you the answer is nothing. I might look like a genius, but I’ve done absolutely nothing different for 35 years or so!

Back in October 1987, Fortune Magazine wrote an article (page 157), “REAL ESTATE HAS PRODUCED THE BIGGEST FORTUNES IN HISTORY.” The article revealed he names of the several super-rich guys with more zeros in their net worth than I can even count. As I read their stories, it occurred to me that although I’m not in their league financially, real estate investing has rewarded me with far more wealth than most other folks in my hometown.

ORDINARY INVESTORS CAR BUILD EXTRAORDINARY WEALTH

At my seminars I teach small-time, “Mom and Pop” investors how to become financially independent investing the same way I do! I show students how ordinary, everyday investors, both part-time and full-time, can build extraordinary wealth, one property at a time. Sophisticated investors like the kind in Fortune Magazine are by no means the only folks who can share in the American dream. Real estate wealth is wide open to everyone willing to roll up their sleeves, learn some new skills and jump right in the pie! That’s what I did and that’s what I can teach you!

Another thing I learned from reading Fortune Magazine was there are only two kinds of rich real estate investors! Those who start out like I did doing one small deal at a time – and those who inherit real estate wealth from others. If you don’t happen to be in the second group like most of us, then you’ll have to do it my way. The good news is – you can if you’ll give yourself permission to do it! I’m ready to teach you if you’re ready to learn. Do yourself a big favor Make up your mind right now to join me at my next seminar. You’ll be glad I helped you decide.

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There are many good reasons why fixers are the perfect properties to begin a real estate investor career. However, leading the list is CASH FLOW.  Fixer -houses by far offer the best opportunities for small-time investors, without much cash to spend, to acquire real estate with minimum down payments and still achieve cash flow quickly.  No other real estate I know of will do that!

It is reasonable to expect – after paying an average of 10% down that one can create a positive cash flow property within a relatively short period of time after the purchase.  Obviously, the time it takes will depend on many factors, such as how long does the fix-up take – how much market value is added to the property – and most certainly, the skills and aggressiveness of the fixer.

I have learned from experience – cash flow is much easier to achieve buying small multiple residential properties, such as 2 or 3 houses on a single lot, several duplexes with a house or two, or any combination of these cluster type properties.  I own many properties from 5 to 8 living units each.  They are excellent cash flow producers after a year or so.  My goal for a complete turn-around is I8 to 21 months.  We’ll discuss this part and the reasons why later.

LESS COMPETITION

Anytime there are fewer buyers who want something and you are shopping that particular market, your odds for success are greatly increased.  Competition is what drives up prices.  Conversely, the lack of it holds them down.  It’s difficult to purchase prime real estate at a discount or get any kind of a break on the terms.  The reason: Too many buyers are willing to pay the asking price.  Why would a seller need to discount?

There are basically only 2 methods to buy real estate at bargain prices!

Method #1

Situations where you are the only potential buyer who knows about the deal (no competition) and, the seller is willing to accept your offer and terms without seeking outside bids (offers) from anyone else.

Method #2

Where the public knows about a property that’s available but cannot visualize its potential value – like after it’s all fixed up.  They are therefore not buyers – only lookers.

Most students who seek my advice are not yet sophisticated enough to be in the information loop where they can benefit from Method #1.  I’ll show you several ways I make Method #1 work for me later on!  However, two of the most common ways Method #1 is used is by licensed real estate agents who buy their own listings and by friends of probate attorneys who get a secret telephone call when an asset (real estate) needs to be disposed of quickly.  In both cases, the public never knows about the deal.  Private deals avoid competition – therefore, they don’t get bid-up in price!

Method #2 is how most of my students will buy real estate.  We shall focus in a market where properties are for sale.  They are even advertised and certainly known to many potential buyers.  However, 95% of all the potential buyers (the competition) see ugly rundown houses as pure junk and not even worth the asking price. Most will not make and offer and those who do will totally alienate sellers by insulting them with “low-ball” offers. With 95% of the competition gone, the playing field is definitely tilted in our direction.

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Make no mistake about it – all the financial ducks are lining up in a row! We’re about to experience the mother of all buyer’s markets. Right now, the only question you should be asking yourself — What must I do to prepare myself so I can take advantage of all the bargains coming down the pike!

First, you must decide about buying the right kind of properties that will do you the most good. You want the kind that will start cranking out money in the shortest possible time! For most small-time investors, the right kind are small multiple unit properties with tenants who are already paying the bills. Owners who sell these kinds of properties today clearly understand they must provide seller financing in order to make a deal. Since mortgage money has all but dried up, you’ll get terms that will start you out with cash flow! Seller financing is about to enjoy its finest hour, so don’t miss the boat!

In order to seize these extraordinary opportunities, you must be ready and willing to oversee the customers who will ultimately make you rich. Some folks will tell you – there’s no money in land lording, so you’re better off to avoid it! I will tell you from experience, that’s a whole lot of baloney! As a matter of fact, it’s the renters who have made many of us rich. You should never intentionally avoid customers who are willing to pay you their hard earned money every month. To do so violates every sound business practice I know of!

Learning good land lording skills will put you in the driver’s seat for negotiating some super profitable bargains. Many cash flow properties already have decent paying tenants; but the buildings are run down and terribly mismanaged. Turning these under-performing properties into your own personal gold mine can be your ticket to long-term financial security. The only requirements to seize these golden opportunities will be your abilities to manage paying customers and negotiate transactions without traditional financing.

The window of opportunity is now! While financial markets are confused and frightened owners think the sky is falling. Now is the perfect time to strike. While it’s true that home prices have declined – it’s just the opposite for properties that generate income. Rents provide an ideal hedge against inflation. The key, of course, is to pounce on confused sellers before they figure out; the sky is still a long ways up!

To acquire the right properties, you must take over the sellers’ problems! After all, that’s likely the motivation for selling! This is where your management skills can earn you super paydays. My strategy is very simple, yet effective! Take over the seller’s short-term management problems in exchange for long-term financial benefits that will last you a lifetime and guarantee your retirement.

Successful investors who have attended my land lording seminar, MANAGING TENANTS & TOILETS, held once each year in November, will be he first ones to tell you they owe most of their success today to their ability to manage the customers who pay for their properties.

Tags: Vision of Opportunity by FixerJay
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During my 45 years investing, I’ve struggled through 4 economic downturns at various hurricane levels, but this one is shaping up to be the best ever! Up till now, the Jimmy Carter presidency has always been my all-time favorite because Jimmy and his crew made me a $1,000,000 overnight. When folks ask me exactly how he did it, I’m still a bit in awe, but what I can tell you - having my name on the deeds to a bunch of duplexes was pretty much all I had to do. Jimmy’s runaway inflation did the rest. My property values doubled in hardly. no time at all.

WILL HISTORY REPEAT ITSELF?

Home sales have slowed to a trickle where I live. My state (California) has risen to the leader in foreclosures! Bankers are scratching their heads wondering why they wrote so many “liar loans” (no docs) for deadbeats and of course by now, everyone knows lenders Freddie Mac and half sister Fannie Mae are in the “dumper”. Meanwhile, the Wall Street bunch is mopping around totally baffled. They thought the problem was four-dollar gas.

 Once again, the inflation sharks are circling faster than anytime since 1981. New construction (home building) is at a 17 year low and mortgage defaults are growing by the day. Of course, there’s some bad news too! Interest rates are still comparatively low – which means Jimmy’s record remains unbeaten for now – still, we’re hearing awful bad vibes on the street. The unemployment fund is nearly broke, major retailers are filing bankruptcies and there’s big problems still ahead for oil. When the interest rates finally bust loose – you can kiss 01′ Jimmy’s record goodbye!

WHAT’S A POOR INVESTOR TO DO, YOU ASK?

My quick answer is get yourself in position to become rich! After all, how many Jimmy Carter’s are out there? You can’t expect them to help you all the time! If you miss the boat this time, you’ve got no one but yourself to blame. You can’t get rich sittin’ at the intersection when the light turns green! This get rich formula hasn’t changed in over a hundred years. You must acquire income-producing (assets) real estate before the inflation dam bursts. You must have the vision to see the leaks now, and be prepared to act quickly!

It’s important that you seek out and acquire the kind of properties that will rise with the tide! If you’ll purchase investment properties that are already earning income today; they’ll automatically rise with inflation- quite similar to a toilet after you flush! The added value (appreciation) which accompanies inflation is the easiest money you’ll ever earn and it’s all tax-free when you keep the property. Imagine if you can, acquiring an income property where inflation automatically drives up the value and the income, while your mortgage payments stay the same. That’s exactly what Jimmy’s term in the White House did for me. It was the perfect storm then – and it’s about to make an encore.

Tags: Fixing For Money, Vision of Opportunity by FixerJay
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You can smell it in the air – something is dead!  Real estate investors and all those who wanta be are just about to find out, so let me spill the beans right now!  It’s the seller’s market that’s died.  After a spectacular six year run, it’s over, and it’s dead!  A brand new cycle is dawning!  Remember how hard it’s been to get cash flow – even when you pay a super-large down payment?  That’s all about to end for those who learn how to shop wisely.  If you will develop the skills so you can take advantage of the changing cycle, you’ll be riding high in the saddle just in time for the next seller’s market, I promise!

SEIZING THE OPPORTUNITY

By far, the biggest profits are made when the general public is convinced that real estate has gone sour! The so-called bubble has finally burst! Skilled investors, on the other hand, are licking their chops in anticipation of a new gold rush!  A dead seller’s market can be the opportunity of a lifetime.  For some, it may be the very first chance to enjoy the feel of cash flow investing.  Going with the flow – I call it! It’s a valuable lesson I teach every student at my Fixer Camps and One-On-One Counseling visits.

BUILDING YOUR MONEY MACHINE

Acquiring properties in a buyer’s market is how you get cash flow to start with, or shortly thereafter!  Terms like seller financing, a promissory note for the down payment and shelving a portion of the equity to pay at a later date are not unreasonable terms to motivated sellers.  Their realtors might not understand, but I’ll guarantee you, sellers do!  These are the very same methods I’ve used for years to build my personal real estate empire.  When you see my properties at a FIXER CAMP, you’ll be looking at a “time-tested” money machine!  My houses produce cash flow, year-around regardless of what cycle we’re in!

TODAY IS TIME TO PLAN FOR YOUR FUTURE

If I had a nickel for all the telephone calls I get about “lopsided investments” – callers wanting to know how to get relief or somehow dump the properties they have, I’d be rich enough without owning any houses! No houses – but a football stadium full of nickels.  Today, investors can begin to make things right for themselves!  Buying properties with a sky full of buzzards is different than business as usual. You must learn how to ask for – and negotiate the benefits you need.  Cash flow allows you to keep your properties – and more importantly,  keep the money spigot running.  At FIXER CAMPS, I teach students how to sell for top price and create attractive seller financing with added security to protect yourself.  A 100,000 dollar promissory note will pay you back double over 20 years.  Just one or two deals, the way I teach, can easily double your retirement income

THE RIGHT TEACHER IS MOST IMPORTANT

Smooth-talkers and genuine investor can be one in the same, but it’s very rare indeed!  Real estate investors can show you their properties like I do at my FIXER CAMPS and personal ONE-ON-ONE training.  Real investors who teach about investing should have a few students doing what they’re taught – otherwise something’s wrong with the teaching! Here again, I have a high percentage of successful students who actually invest.  Also, I’m willing to give you a couple names if you’re dead-set about learning!  Finally, there are several ways you can check out legitimate teachers!

One quick easy to use service offers a comprehensive evaluation of every real estate guru in the nation.  It’s a website operated by well-know real estate entrepreneur-author John T. Reed in Alamo, California, www.johntreed.com.  Naturally, satisfied customers and word of mouth will always trump most other sources. Once again, I’m happy to provide names of several investor students (with their permission, of course).

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