Archive for the ‘buying real estate’ Category

When to Hire a House Inspector – Radio Interview with Rich Peterson

Wednesday, July 31st, 2013

 

This morning I was interviewed by the masterful interviewer, Rich Peterson (KROC Radio 1340 AM, Rochester, Minnesota), about my book “Turn Your Home Into a Rental House Instead of Selling It!”

I was also on Rich’s show a couple of years ago to promote my earlier magnum opus “Fix em Up Rent em Out.”

Today, Rich asked the question,

“Does the city have to  inspect a house before you can rent it out?”

My answer was,

“No the city doesn’t do inspections unless you have constructed a guest house, or added or room, or make some major modification to the property. You must comply with building codes, but if you don’t make any changes, the city is not involved.”

When to Hire an Inspector

While there is not need for the city to do an inspection, prior to purchasing a new home, it’s critically important to hire your own inspector to make sure that everything is “operational” in the house that you want to purchase.

Usually, the owner has to fill out a “disclosure” form that informs you of any existing problems that the house has, that he or she is aware of . Sometimes, owners will have a report available by an inspector that they hired to inspect the property.

Even in that case, you still need to hire your own inspector. It may sound like a case of “dueling inspectors,” but I like to have a report written by the guy that is representing me, not the guy who is representing the seller.

Hiring a good inspector is especially important when you are purchasing a foreclosed property, where there is usually no owner present. Then, the only thing you have to make your decision about the condition of the house is the inspector’s report.

Tid Bits: NBA Trivia and Unwise Career Moves

1st NBA Basket

Prior to my interview with Rich, I was listening to his radio show and I learned that the first basket scored in the NBA was by Oscar “Ossie” Schectkman, who recently passed away at age 94.

I also learned:

4 Things that People do to Help their Career that Actually Hurts Their Career.

1. Staying too long with the same company. Employers wonder why you haven’t changed.

2. Being too good at something you don’t like doing, because you’ll be hired to do it more and more.

3. Keeping your mouth shut. You should tell supervisors before they make mistakes. You may get fired, but improves your status under point #1.

4. Putting in a recommendation for a friend. If the friend is a failure, it reflects badly on you.

As Rich Peterson says, “We’ll’ see you down by the riverside.”

 

Upcoming “Turn Your Home Into a Rental House ” Radio Interviews (most shows can be heard  on the internet)

Tuesday, August 6th, at 8:10 am (central time), I’ll be on Bob Schmidt’s show, WLFN 1490 AM, Onalaska, WI.

Tuesday, August 6th, at 9:40 am (eastern), Greg O’Conner will interview me, WKHM 970 AM, Jackson, MI.

Wednesday, August 14th, at 9:15 am (eastern), I’ll be on Dave Kelber’s show, WRNJ Radio, Hackettstown, NJ.

Watch this space for information on additional interviews.

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How I Evicted A Problem Tenant in 4 Steps

When to Hire a House Inspector – Radio Interview with Rich Peterson

Getting Rid of Bad Tenants

“Turn your home into a rental” on Mark Wayne Show

7 Reasons to Live in a Fixer-Upper House While You Repair It

6 Steps to Roof Maintenance (for the Home that will Turn Into a Rental House)

Our First Rental House Plunge

10 Most Frequent Problems Found by House Inspectors

5 Steps to Get Your House Ready to Rent by Terry Sprouse

5 Steps to take if your house is flooded

Some perfectly legal ways to maximize your rental profits

Add “Start a Rental House Business” to Your Bucket List

The 5 Rules on How to Lose Money and Get Your Rental Property Trashed by Tenants

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Required Roof Maintenance for Fixer Upper Houses

Learn to Repair Your Fixer Upper Houses

How I Got Started In Fixer-Upper Houses

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10 Most Frequent Problems Found by House Inspectors

Tuesday, December 11th, 2012

These kids come to me and ask, ‘Hey Arnie, are you God?’. I just laugh and say ‘Nice try, but keep looking.

— Arnold Schwarzenegger

Buying fixer-upper houses, living in them, repairing them, and eventually renting them out is a safe way to generate short-term income and long-term economic security.

Even Arnold Schwarzenegger,  in his new book Total Recall, cites investing in real estate as a valuable step on his road to financial success.

But, how can you be sure that a house is worth what you are offering to pay for it? Based on experience, we can “eyeball” the property and probably be able to make a pretty accurate estimate of its worth, maybe 75% of the time

That’s probably closer to 95% of the time for Arnold, with that Terminator vision of his.

Get a professional inspection

However, that’s not good enough. We need more information than our educated eyeball can provide in order to:

1.) Avoid any surprise defects. After you buy the property, trying to get reimbursed for those defects will be too late.

2.) Negotiate a lower selling price for the house.

I hire a professional inspector to provide me with a complete written inspection report that can be used to negotiate a lower price on the house if it uncovers anything that is in need of repair.

Looks straight to me. Why do you ask?

When having the physical inspection done, you should be aware of the most common house problems.

Ten Most Frequent House Problems

 A survey of U.S. home inspectors resulted in this list of the most frequently encountered problems:

 

1.) Improper Surface Grading/Drainage 
This is responsible for the most common of household maladies: water penetration of the basement or crawl space.

2.) Improper Electrical Wiring 
Includes such situations as insufficient electrical service to the house, inadequate overload protection, and amateur, often dangerous, wiring connections.

3.) Roof Damage 
Involves roof leakage, caused by old or damaged shingles or improper flashing.

4.) Heating Systems
Problems in this category include broken or malfunctioning operation controls, blocked chimneys, and unsafe discharge of exhaust.

5.) Poor Overall Maintenance
Includes signs such as cracked, peeling, or dirty painted surfaces, crumbling masonry, makeshift wiring or plumbing, and broken fixtures or appliances.

6.) Structural Problems
Many houses, as a result of problems in one or more of the other categories, sustain damage to such structural components as foundation walls, floor joists, rafters, window and door frames.

7.) Plumbing 
Problems consist of the existence of old or incompatible piping materials, as well as faulty fixtures and waste lines.

8.) Exteriors 
Flaws in a home’s exterior, including windows, doors, and wall surfaces, are responsible for the discomfort of water and air penetration. Inadequate caulking and/or weather-stripping are the most common culprits.

9.) Poor Ventilation
Perhaps due to overly ambitious efforts to save energy, many home owners have “over-sealed” their homes, resulting in excessive interior moisture. This can cause rotting and premature failure of both structural and non-structural elements.

10.) Miscellaneous
Includes primarily interior components, often cosmetic in nature. May include dents in doors and walls from children’s unsupervised indoor karate practice, or possibly from having Bigfoot (or the Governator) as a former resident. (I inserted those last two examples based on some unfortunate personal experiences I have had.)

A specialist in mold removal or riled up Governator?.

A home inspector’s standard practice typically does not include the following, for which a specific license to inspect and identify is required:

  •  Asbestos
  • Radon Gas
  • Lead Paint
  • Toxic Mold
  • Pest Control

If you suspect the presence of any of these items, you would contract with inspectors in these areas independently.

 

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How I Evicted A Problem Tenant in 4 Steps

When to Hire a House Inspector – Radio Interview with Rich Peterson

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“Turn your home into a rental” on Mark Wayne Show

7 Reasons to Live in a Fixer-Upper House While You Repair It

6 Steps to Roof Maintenance (for the Home that will Turn Into a Rental House)

Our First Rental House Plunge

10 Most Frequent Problems Found by House Inspectors

5 Steps to Get Your House Ready to Rent by Terry Sprouse

5 Steps to take if your house is flooded

Some perfectly legal ways to maximize your rental profits

Add “Start a Rental House Business” to Your Bucket List

The 5 Rules on How to Lose Money and Get Your Rental Property Trashed by Tenants

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Required Roof Maintenance for Fixer Upper Houses

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How I Got Started In Fixer-Upper Houses

How to learn to operate a fixer upper house business

The Peaceful Warrior and Fixer-Upper Houses

5 Steps to Get Your House Ready to Rent by Terry Sprouse

Tuesday, November 13th, 2012

“Life is either a daring adventure or nothing.”

Helen Keller

If you are following my suggestion and turning your old home into a rental house, or if you are just purchasing an investment fixer upper house, use these 5 steps to prepare your house to rent out.

 Step 1:  Remove Furniture

Move all of your furniture and personal belongings out of your old house. The absence of these items makes the house look bigger and the home is more inviting if it is not cluttered up with beds, chairs, food supplies, and toys. It also makes it easier to do a thorough job of cleaning the house.

This only applies to the first time you rent out your new rental house. After tenants leave in the future, they will take most of their things with them. Of course, some tenants do not follow the normal procedure, and they may leave in the middle of the night to avoid paying their last rent check.

(Occasions like this make it tempting to slip a magnetized GPS tracking device under the fender of the renter’s car.)

An incident like this happened to me a couple of years ago. Not only did the tenant leave a pile of clothing, bottles and boxes of cleaning supplies, cupboards of food, and a sofa, but also left behind a car that didn’t work. (So much for the GPS idea.)

Renters like this one are the exception. Tenants normally take all their things with them when they leave, making it easy for me to prepare the property for the next tenant, and without much effort, present an appealing yet empty house.

Step 2:  Clean Up

 Thoroughly clean the house. This includes painting walls (a fresh coat of paint makes the place look and smell good), washing floors, cleaning appliances (especially the oven), shampooing carpets, washing the windows, cleaning the bathrooms and checking the roof.

 Step 3:  Make Repairs

 Take care of all repair work. Leave nothing to chance and make all repairs before tenants move in. Change broken outlets and switches, patch holes, remove stains, replace cracked and broken glass, repair dripping faucets, replace missing shingles, and fix roof leaks.

The old saying that “Left to themselves, things always go from bad to worse,” is especially true with rental houses. It’s tempting to assume that that small leak in the bathtub, or a toilet that flushes most of the time, won’t bother anyone. But trust me, you will get that call to repair the bathtub or toilet at the most inopportune time.

This doesn’t mean that everything in the house has to be new, but everything should be in working order.

It is a rental house after all, and not Buckingham Palace.

For example, bedroom doors do not have to be replaced every time they have a crack or a hole in them. I rehabilitate the door with wood putty, and a fresh coat of paint. The guy in the “Easy Repair of Hollow Core Door” video below uses drywall mud to fill the hole, with equally good results.

 Buy used construction materials

Missing or broken light switches, outlets, covers can be replaced inexpensively with quality used ones. I have also purchased reliable doors, cabinets, stove tops, dishwashers, and toilets at stores that recycle construction materials, for pennies on the dollar. The Habitat for Humanity Store is one such place that I frequent for good used materials. There are 825 Habitat Restores in the United States and Canada. You can locate a store near you at www.habitat.org

Buy new or used appliances?

 If broken clothes washers or dryers cannot be easily repaired, our policy is to replace them with a quality used one, or with lower end new appliances (like the Kenmore brand from Sears).

 Buy bargain appliances before you need them

 Craigslist and yard sales are great places to find good used appliances at bargain prices. If I see a nice working appliance for a good price, I will purchase it, even though I don’t have any immediate need for it. I’ll just store it in our shed until I need it.

I bought a like-new furnace at a yard sale for only $40 and installed it into a rental house and it has worked great. For furnaces, there are very few moving parts to worry about, and the wiring is relatively simple. As long as the motor works, you’re home free.

I once literally picked up a clothes dryer from the side of the road that had a “Free Dryer” sign taped to it. I gave it a new home and it has been working

Low maintenance yard (in the southwest)

reliably for over 10 years now. The only repair, about five years ago, was that I had to change the on/off switch on the door.

Step 4:  Simplify Landscaping

The front yard of your rental houses must look great. Curb appeal gives the potential tenants a good first impression. Simple and neat landscaping gives the client  comfort that the yard is low maintenance and ecologically and economically low in water consumption saving the tenants money on water and saving you time later not having to replace a yard of dead plants.

This yard went too low maintenance!

I personally like to utilize decorative rocks on our rental yards, and plants that don’t require any watering, like Mesquite and Palo Verde trees, which have long roots that tap into the aquifer.

 Step 5:  Re-key the Locks

 One other thing that I like to do before a new tenant moves in is to re-key all the locks. This is cheaper than buying new doorknobs, and it provides security for our tenants. This protects you and your tenants in case a previous tenant has surreptitiously kept an extra copy of a house key.

 

Related Posts

Remove that Garbarge Disposal Now!

6 Steps to Roof Maintenance (for the Home that will Turn Into a Rental House)

How I Evicted A Problem Tenant in 4 Steps

When to Hire a House Inspector – Radio Interview with Rich Peterson

Getting Rid of Bad Tenants

“Turn your home into a rental” on Mark Wayne Show

7 Reasons to Live in a Fixer-Upper House While You Repair It

6 Steps to Roof Maintenance (for the Home that will Turn Into a Rental House)

Our First Rental House Plunge

10 Most Frequent Problems Found by House Inspectors

5 Steps to Get Your House Ready to Rent by Terry Sprouse

5 Steps to take if your house is flooded

Some perfectly legal ways to maximize your rental profits

Add “Start a Rental House Business” to Your Bucket List

The 5 Rules on How to Lose Money and Get Your Rental Property Trashed by Tenants

Window Repair with #2 Son

Required Roof Maintenance for Fixer Upper Houses

Learn to Repair Your Fixer Upper Houses

How I Got Started In Fixer-Upper Houses

How to learn to operate a fixer upper house business

The Peaceful Warrior and Fixer-Upper Houses

Add “Start a Rental House Business” to Your Bucket List

Friday, August 24th, 2012

Taking a break from my regular fixer upper rental house blogging, today I am going to comment on some favorite blog articles that I have recently read.

Fearless Men

While I agree with Fearless Men’s article on the silliness of most bucket lists, in their article, 12 Things A Man Doesn’t Have To Do Before He Dies-Stupid Bucket Lists, I also think that starting a part time business is the exception to the rule.

While most bucket lists consist of activities that might reduce your life expectancy ( e.g., bullfighting), or your ability to enjoy life (e.g., broken body from the ever-popular choice of skydiving), a part time business, like owning rental houses, can actually improve your life.

Landlord Investor

Chuck’s article on Vacancy, First one in a while for us . . . is an insightful description a recent episode of  losing  and replacing a tenant. I appreciate this “real life” rental story that I can both relate to and learn from.

Louisville Gals Real Estate Blog

In her article entitled, 13 Cool Tools to Make You a Marketing Superstar, Sharon describes 13 amazing tools to help real estate investor to streamline their business. This is great for me because I didn’t know a lot of these things even existed, or that I needed them, until I read her article.

Any Shiny Thing

I actually read Lynn’s article Nora Ephron Left Us Sleepless a couple of weeks ago. It’s the type of article that touches your heart and makes you reflect on life’s bigger issues.

Turn Your House into a Rental House

By now, you probably know that my theory is that one of the easiest ways to get started in real estate investing is by turning your home into a rental house, instead of selling it.

My wife, Angy, and I are presently finishing up a book about how we go about doing this, entitled, not surprisingly, How to Turn Your Home into a Rental Property, Instead of Selling It.

Here is a quote from a book

According to the American Association of Realtors, the average American purchases 7 houses during their lifetime. In our opinion, those are 7 houses that we should hold onto for the rest of our lives, to generate monthly income and for long-term economic family security. Don’t give away the goose that lays the golden eggs!

 

The usual procedure that most people follow is to sell the home that they live in and to use the cash from the sale to buy a new house. If we tweak the old procedure just a little, it can result in a huge difference in our net worth and our economic security. We propose that instead of selling your home, just refinance it, and use the money from the refinance as a down payment on your next house. Now, you own two houses and you can just turn your old home into a rental property.

Presently, the book is going through the final editing and formatting process. Of course, it’s being reviewed by Homeland Security and the Pentagon, to avoid any classified information from leaking into the wrong hands.

By September the book should be available in both Kindle and paperback editions.

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The 5 Rules on How to Lose Money and Get Your Rental Property Trashed by Tenants

Friday, August 10th, 2012

The Arizona Network of Real Estate invited me to give a presentation to their group about my book “Fix em Up Rent em Out.”

I thought the video might be available to the general public but it looks as though that’s not going to happen.

However, so that no one feels left out, I am going to provide  a summary of the key points that I hit during the presentation. As someone who was regularly picked last for teams in gym class, I’m sensitive to people feeling left out. Casting modesty to the wind, I am also including exclusive photos of the event.

So here are:

The 5 Rules on How to Lose Money and Get Your Rental Property Trashed by Tenants (based on an article by Andrew Stefanczyk)

1. Choose the Worst Possible Area

Location will determine the kinds of tenants you will attract, and how much rent you can fairly charge.

Do you want these bearded wonders as tenants?

The best approach is to identify target areas in your city where you would like to focus your purchases. I like to focus on “transition zones” (where there is a mixture of housing types) which are good for investors because we can purchase properties at lower prices, and there is high demand to live in these areas.

2. Put in the very best of things when fixing up  an investment property

Use new and expensive sinks, doors, refrigerators, light fixtures, etc. Never shop at stores that recycle construction supplies. Spare no  expense.

Of course, the problem is that tenants will not take care of our properties as well as we would,

Habitat Store

so we end up with many broken or worn out items. The better alternative is to shop at used building supply stores, and to purchase good, inexpensive, supplies for our rental houses. One such store is the Habitat for Humanity store.

3. Make sure you have absolutely no experience in make basic repairs

Not knowing how to change electrical outlets, unclog drains & toilets, and replace broken windows will cost quite a bit down the road.

The better way is to:

A. Learn as you go, and comply with EPA regulations

B. Take construction classes at junior college

C. Learn from handymen and contractors

D. Take the Zen approach to  house repair learn to do everything yourself

5. Utilize fix-up books, investing books, & YouTube to find answers on how to make house repairs

4. Do not screen your tenants

Being as uninformed as possible about who you rent to may be the best way to lose money as a landlord. Do not ask for or check references. Do not call previous landlords and ask questions like, did they pay rent on time? How was the condition of the house or apartment when they left? Did they ever disturb neighbors with loud music or shouting matches? How often would you have to make special trips for repairs? Being as uninformed as possible about whom you rent to will make a huge difference and will increase the chances that you will get tenants that will trash your property and refuse to pay rent.

However, the better way is to:

A. Use a checklist for tenants. Decide what kind of tenant that you want ahead of time.

B. Look at their paycheck to verify income.

C. Check county records to see what illegal activities they’ve been up to.

D. Know the Fair Housing Act. Never select tenants based strictly on “race, color, national origin, religion, sex, familial status or handicap (disability).”

E. To find new tenants, use Craiglist, put up arrow signs, and host an “open house.”

5. Make sure you have not learned about your rights as a landlord

Be completely unfamiliar with the eviction process to guarantee long, drawn out disputes with tenants. Don’t keep up to date financial records or copies of correspondence with tenants. Most states provide online information about tenant and landlord rights so avoid reading these.

The better way is:

A. Get an authoritative legal guide like  “The Arizona Landlord Deskbook” by Carlton Cassler.

B.  Copy forms and letters from your legal book to send to tenants.

C. Comply with legal ways to deal with bad tenants.

D. Use memos to communicate with tenants so you have a record of correspondence.

E. Use a month to month lease instead of long-term lease to more easily scrape off bad tenants like barnacles.

F. Reward tenants for paying on time by discounting their rent $25.  

G. Send good tenants Target  gift cards for Xmas.

In Conclusion

Share Your Knowledge

“Each of us has cause to think with deep gratitude of those who have lighted the flame within us.”

–Albert Schweitzer

Carve Out Your Niche Update

My award-winning book on self-publishing, Carve Out Your Niche, is now available in Kindle format.

The Midwest Book Review called Carve Out Your Niche,

“Invaluable for anyone seeking to successfully write, publish, and market their own work.”

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Get in on the Greatest Real Estate Fire Sale in History

Saturday, March 3rd, 2012

“The greatest  real estate fire sale in the history of the United States rages on.”

— CNBC

Foreclosed properties are selling like hotcakes. Now is a great time to get some great deals on investment properties  Besides the price, below are four reasons why you can count on real estate to provide you with security today and in the future.

Cash flow

With a good rental property, after all the expenses have been covered, including mortgage, vacancy rate, repairs, and property management, you can still receive a good cash flow. This provides a reliable monthly income for as long as you want to keep the property. As the amount of rent that you charge goes up, your profits go up. See Table 1 (U.S. Census Bureau, 2012) for historic monthly rents in the U.S., from the U.S. Census Bureau.

Demand for Housing

There will be always be people in need of a place to live. With our growing population, a gain of one American born every 14 seconds, we will have a population of 400 million by 2050. Based on our current immigration patterns and population growth, there will continue to be a demand for housing well into the foreseeable future.

Appreciation

In the short term, housing appreciation seems to unpredictably rise and fall. However, in the long term, over a 60-year period, house values show a steady and consistent upward trend. According the U.S. Census Bureau, from 1940 to 2010, the average increase in the value of a house was about 5% per year, adjusted for inflation. Table 2 (U.S Census Bureau, 2012) shows historic home values.

While appreciation of 5% may seem low to some people, when we consider that we only put a small percentage down, between 5-20%, and we receive monthly rent checks that more than cover mortgage payments, it begins to make sense. If we don’t allow periodic dramatic rises and falls in home values to shake our confidence, we can count on steady, long-term, profits from our investment properties.

Tax savings

Our kindly Uncle Sam wisely gives tax incentives to real estate investors. The federal government allows you to depreciate your investment (or reduce your taxes to account for physical deterioration of the house) on Schedule E of your annual tax form. In addition, you deduct expenses related to your investment from your gross income on IRS Form 1040, and reduce the amount of income that you pay taxes on.

How to Force Yourself to Write

Security in Retirement with Fixer-Uppers

Monday, February 20th, 2012

Are you like me and never socked much money away for retirement? We are not alone. The Employee Benefit Research Institute’s Annual Retirement Confidence Survey found that pre-retirees (Americans between the ages of 55 and 65) greatly underestimate how long they are likely to live and how much money they will need in retirement.

Experts say that we need to change our mindset from “assets” to “income” in retirement planning. It’s not enough to know how much money we have in savings; we need to know how much income our savings can generate over time.

There is no better way to change our mindset and our portfolio from “assets” to “income” than by investing in real estate. If we invest wisely before we retire, and can have a stable of reliable rental properties that generate steady monthly income. We can look forward to a retirement that provides security instead of uncertainty.


Don’t rely on politicians to provide you with retirement security. If you want it done right, you must do it yourself.

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Don’t buy a house with a glaring defect

Sunday, January 30th, 2011

Opening up the old mailbag again, I am printing my response to a recent fixer upper email question that I received.

Hello Terry,

I’m writing you with a somewhat specific question.

I am looking at a house at xxxx Star St. in Duluth, MN. It’s a vacant house (so many are nowdays) and the listing price 39k. Repairs look to be 10.9k plus a fee of 1,100 for re-registering it as occupied.

I walked through the house, visually it’s fine. I like the house, don’t get me wrong. New windows, carpets, paint, etc. But the repairs are mostly plumbing etc. Should I put in my bid for 39k EVEN or throw it down for 29k?

It’s in a fairly low crime area, but across the street is a halfway house for prisoners just getting out into the world…Prior values in the 200k for this area before the Great Collapse….

Thank you for your time,

Malcom

Dear Malcom,

What I see is a red flag that should influence your decision.

The location of the house across the street from a halfway house is going to considerably limit what you can do with the house. Regardless of whether you are going to turn it into a rental or flip it, you have a very limited pool of potential tenants or purchasers. In my opinion, most people would not want to live there.

Consider, if you had a tenant who had a choice to rent your property, or one in another neighborhood nearby that did not have a half-way house across the street. Which would they choose?

Granted, the purchase price is low. However, in my opinion, it’s better to spend a little more money for a house that doesn’t have a glaring defect.

There are a lot of properties on the market right now, and many at bargain basement prices. If I were you, I would consider looking around for another one.

Donald Trump said, “Sometimes your best investments are the ones you don’t make.”

Best of luck in your business.

Best regards,

Terry Sprouse

Control Your Thoughts & Reach Your Dreams

Monday, October 25th, 2010

What things do you actually have control over in your life?

When you think about it, there are actually very few things that we can control.

For example, I was forced to give up my dream of boxing. I ruined my hands in the ring. The referee kept stepping on them.

We are required to buy insurance for our cars and houses. The kids must go to school and have supplies and clothes. We choose food, cars and most consumer goods based on the advertisements we see on television. Different levels of government and social pressures decide many things for us, or leave us with limited options to choose from.

And, it doesn’t get any better as time moves on. It seems the older we get, the fewer choices that we have. Men still chase women when they get older, but only downhill.

The One Thing We Control

Napoleon Hill says that we have control over but one thing, the ability to control our own thoughts. This is the most significant and inspiring of all human traits. It is part of our divine nature. This divine tool is the sole way to control your own destiny.

Mind control is the result of self-discipline and habit. You either control it or it controls you. The most effective way to control your mind is by keeping it busy with a definite purpose, supported by a clear plan.

The Ultimate Question

A lot of people I know have read Think and Grow Rich, and they say that they think it is a great book. But, very few know the answer to the following question.

What does Napoleon Hill say that you must do twice daily in order to make your desires become reality?

On page 36 of my copy of Think and Grow Rich, Napoleon Hill says that you should have:

1.) written a concise statement of what you want,

2.) how you plan to get it, and

3.) when you will get it,

then you should read your written statement aloud twice daily, once before retiring at night and once after arising in the morning.

What Does This Have to Do With Real Estate?

In the early 2000’s, I thought my job was going to be cut and I that would be unemployed. I decided I needed a steady second income so I wouldn’t have to rely on my 8:00 to 5:00 job to bring home the bacon .

After I concluded that buying fixer upper houses and renting them out was the best second income for me, I wrote down my desire on a piece of paper and carried it around in my wallet.

I wrote, ” I will find and buy a fixer-upper house in the next 60 days.” In less than a month, I found and bought my first fixer upper house, and that was my start in this business.

That was the first time I experienced the power of this technique. I have had many subsequent successes with the technique as well.

Like most of us. you have ideas and dreams. But, if you go beyond just identifying them and you write them down, and put your passion into them, they are more likely to come true.

Confessions of a Fixer-upper-holic

How to Get Money to Buy Rental Houses (Video)

Thursday, September 16th, 2010

During my interview with the inimitable Dan Ramey, at WBEX 1490 1490 AM in Chillicothe, Ohio, he asked whether or not people should be concerned about refinacing their house to make a downpayment on a rental house.

Naturally, people are nervous about making financial changes during a recession. But, refinancing your existing house to take down payment money out of your equity and buy a rental house is one of the safest ways to start investing in real estate. It’s the most common way that real estate investors use to purchase investment properties.

If you have a steady job and a good credit rating, now is a rare opportunity to get a loan in the 4% interest range. And, houses are selling at fire sale prices!

It’s a good idea to refinance a house that you have owned for a few years before reinancing to take some equity out of it.

Refinancing an existing property for downpayment money is a lot better than waiting until you have enough cash to purchase a rental house withouta loan. Having a loan gives you leverage, because you don’t have to use all of your own money, which could take 20 years or more, to save.

The great benefit is, after you have purchased your rental house, is that you have a stream of income that is in addition to your regular 8:00 to 5:00 job.

You can be laid off, or fired from your regular job, but you can never lose your rental property job!

Here is my new video that shows the process of putting your lazy home equity to work for you:

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