FIX-UP SKILLS WORTH BIG BUCKS
Dreams can be a powerful stimulant for your imagination. When you study autobiographies of wealthy people, as I like to do, you’ll discover that some mighty successful folks got that way starting with only dreams and imagination.
The majority of people today don’t spend even one hour a week planning some kind of strategy for their financial future. A successful land salesman friend of mine said: “Most people I know are just too busy earning a living. They never make any ‘real’ money!”
I advise my students that your bank account will grow much faster and a whole lot fatter if you can look beyond the ugliness of the mineshaft and see the glitter of gold inside. With most run-down properties, ugliness is very shallow and up-front. It’s what shows and creates the undesirable image. After a little experience, most house fixers agree, ugliness like beauty is only skin deep and is quickly erased.
Often you’ll find the biggest rewards are off the beaten pathway. This might be your first step towards “big bucks” and real cash flow. Try to think about investing a little differently. Isn’t it the folks with vision who always seem to get there first and make the most money? Followers are always lagging behind and are never quite certain about what they’re doing. Generally, they show up too late after the competition has “bid up” the bargain prices. Often, they get snookered into buying properties using the “Greater Fool” theory. Many traditional investors have long since given up any ideas about making profits. They’ll be happy just to break even. Their biggest concern about the properties they own is getting their original investment back.
The big reward for house fixers who learn to solve ugly house problems is seller concessions. Sellers who have problems are highly motivated to make deals. It’s these deals that earn big money. There is no way to make “cash flow deals” with folks who might sell with enough persuasion. Terms such as seller financing and discount prices don’t come from sellers who are still proud of what they’re selling. For every “barn burner” transaction I’ve made there has always been a seller who has very few options to bargain with.
Allow me to clear the air about fixing houses for money. First, lots of people can fix up houses, but the majority comes up short on the money part. They don’t earn much money for all their time and effort. People get paid for their skills. You won’t make a killing in the fix-up business from painting a house or hanging shutters. The house will look better, but your bank account won’t.
Following is a list of the top five conditions that create the biggest purchase discounts; the best buying terms and ultimately the biggest profit potential for us house fixers.
1. Ugliness: pigsty looks, tons of junk -discount range 30-50%.
2. People problems: unruly deadbeats, non paying-discount range 30-40%.
3. Older: junk, deferred maintenance -discount range 25-35%.
4. Rundown: out-of-state owners, tenant manager-discount range 20-30%.
5. Cosmetic fixer: needs paint, minor tune-up-discount range 10-15%.
These are averages based on my personal experience and are intended to give you a good idea where the most money can be made in the fix-up business. Also, these five conditions are often found in combinations. Property ugliness combined with people problems are almost a sure recipe for success for skilled house fixers.
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