10 SUCCESS TIPS
1. First, develop a total investment plan from start to finish. I recommend specializing to begin with. Let’s say your plan is to buy 4 rental fix-up properties each year for the next 5 years. Each one must produce $100 monthly cash flow. That’s a very reasonable plan.
2. Learn your local real estate market. Know what properties should cost and what they will reasonably sell for. Learn how much rent you can charge. Do this step before you buy – not afterwards.
3. Develop a business sense – think like a retailer. That will help you to pay wholesale prices when you buy. Buying at retail prices and selling for retail prices simply won’t work.
4. Learn to spot or identify hidden bargains quickly – then act fast to acquire them once you do. Remember, the competition is keen. You must develop a sixth sense for “sniffing out” hidden money-makers - then act quickly.
5. Learn landlording firsthand – from doing it. Manage your own customers (tenants). Many inexperienced investors farm this function out to professional property managers. I consider this a serious mistake for new investors. It may be okay later on, but owners should know the job inside and out to begin with!
6. Invest – don’t speculate. Investing is a plan to make money. You must be able to identify exactly how you will do it. That’s why step one is necessary. Speculators are simply guessing without a plan, which makes buying properties very risky.
7. Learn to live on tax-free or tax sheltered income. Rents you collect should be largely tax sheltered. Rehab loans, like Title Ones, are tax-free, same as borrowing on equity or refinancing. When you collect $100 rent your goal is to keep $100. When you earn $100 in wages – you keep only $65 or $70. Income taxes will eat up the rest.
8. Learn how to do deals where you have 100% control or nearly so. Basically, this means seller financing and you doing your own management. Avoid short payback notes and variable rate mortgages offered by the institutional bankers and hard money lenders.
9. Establish local trade accounts. Most building supply stores will give you 10% discounts. It’s not automatic – you must ask for it. Besides saving money, you are building a solid credit history. Another benefit – you don’t need to carry a pocket full of money around. Paying monthly statements is much easier and creates better bookkeeping.
10. Once you have developed a plan that works well and consistently makes you money, stick with it until it quits working. Most investors suffer a common weakness. We’re all suckers for a better mousetrap. Avoid the “too good to be true temptation” – you ‘ll find it generally is.
FIXER JAY INSIGHTS
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