Be Successful Now – Not Someday
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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