Archive for the ‘start small’ Category

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.

 Related Posts

Remove that Garbarge Disposal Now!

Increase profits by improving your rental property

Saturday, July 9th, 2011

I’d like to share with you an email that received from an insightful real estate investor who, I think, uses a great way to increase his rental profits.

Hi Terry;

I have been the landlord of a triplex for just over 5 years. For most of that time, I simply maintained the property that I owned after making a couple of bigger renovations (windows and insulation). The biggest challenge I had was that my existing tenants paid way below market rent and rent control would not allow me to increase rents beyond 0.7%-2.2% each year. I felt stuck.

Recently, one of those tenants moved out. I managed to gut and redo the one bedroom unit and once it was finished I rented it out for almost double what I was getting before! This took the pressure off quite a bit but I realized I had to get my other “long term” renter out of her apartment. I ended up paying her to leave (2 months free rent) but it looks like it paid off. Her rent for a 2 bedroom was $474.77, but I have a lease now on the apartment for $799 a month. Surprisingly, I got this tenant because they saw pictures of the first unit I did and knew that I was finishing the second unit the same way. When they did the walk through the place was gutted and I didn’t even have the walls framed in yet!

I have looked at some other systems out there, but it seems to me that the only one that really works is finding a run down property with below market rents in a good area, fixing it up, and rerenting to higher classed tenants. If I knew a few years back what I know now, I would get the old tenants out ASAP even if I need to use my “cash for keys” program.

Right now I work full time so I rely on a dependable contractor that I feel I can trust. I hope to start renovating my own houses down the road, but I think I might need to get rid of my job to free up the time. Currently, I just do a walk through each day to see what work has been done and simply manage the renovation. Once the triplex is completely turned around next month I figure I will start looking for another project; I just need to convince my wife who still has fresh memories of my less stellar tenants.

Anyway, wishing you all the best!

Jim Thrower

 Related Posts

Remove that Garbarge Disposal Now!

Turn Your Home into a Rental Property (video)

Tuesday, November 23rd, 2010

What is the most powerful thing in the world?

An idea that has been planted in a person’s mind.

To improve your economic security you should plant in your mind the idea you should never sell a house. Converting your home to a rental house can provide long-term rental income and economic security to you and your family.


 Related Posts

Remove that Garbarge Disposal Now!

A small grouting job in the bathroom

Sunday, November 18th, 2007

Sunday, work continued on the fixer-upper house that we live in, and plan to sell (for more info on this investing strategy, see “How to Turn Your Home into a Rental Property, Instead of Selling It!” coming in Sept. 2012.) There was a little grouting left to do in one of the
bathrooms, around the tiles that made a baseboard-type border abound the bathroom floor.

Here are the tools I used – small bucket, white grout, a trowel, and a small “mud” (or joint compound) spatula (not pictured)

I mixed up a small amount of grout. Add water to the powder until you have grout the consistency of peanut butter.

When I mix grout, I wear a mask or kerchief to cover my mouth and nose. The grout mix contains cement, so if you breath in the powder it can scar your lungs.

I apply the grout with the small spatula.

Afterwards, I clean up tools with water.

After the grout has cured for three days, I apply grout sealer.

There are two pretty good books on floors and tiling published by Home Depot, “Tiling 1-2-3” and “Flooring 1-2-3“. I recommend “Flooring 1-2-3”, if you just want to buy one book. It cover tiles about as well as the other book, and also addresses how toinstall several other types of flooring. I used it as a guide to install both laminate flooring, and vinyl flooring.

As always, to make money in the fixer-upper business its best to do everything yourself. You learn by doing. Start small but work up to bigger projects.

Our first tiling project was in a small bathroom, a good place to learn the process. But since then, my wife and I have worked our way up to doing large bedrooms. We feel comfortable tackling any tiling project now.

Add to Technorati Favorites

Subscribe in a reader

Share this: | Digg | Ma.gnolia | Reddit | Stumble Upon |

Start Small, Profit Big in Real Estate — A review of Jay DeCima’s book

Saturday, August 18th, 2007

For those of us in the fixer upper and rental house business Fixer Jay is the old pro.

This book has the strong qualities of Jay’s first book (“Investing in Fixer Uppers”)–written in a easy-going, lay-back style that makes it enjoyable to read, and it presents an eminently useful model that really works.

Jay likes to avoid slick and flashy techniques because “slick is another word for slippery.” He points out the gurus who formerly expounded on a wide assortment of get-rich techniques are “either bankrupt or working in gas stations.” Jay advises to stick with run-down, fixer-upper types of properties. Buy low, and improve their value, and rent them out. It’s a winning formula that I, and many others, have used to make money in real estate.

I particularly liked Jay’s technique of taking a low key negotiation approach, like the former TV-detective Columbo when he interrogated suspects. Instead of putting the seller on the defensive, don’t directly tell them what’s wrong with their house, no one wants a complete stranger to come up and criticize their house. Instead, always show respect to the seller, and have the seller tell you what’s wrong with the house by asking him a series of polite questions. Just when Columbo was going out the door and you thought he was leaving, he would always turn around and say, “oh by the way, just one more question for you.” He asked it in the most polite way, and often the answer to that question was the one that cracked the case open.

Listen carefully to what the seller has to say. You can learn a lot by listening. Don’t be critical, never talk down to anyone. Even sellers who must sell, won’t sell to you if you try to intimidate them. Jay points out that you still must diligently verify any information you get from the seller. One way to do that is to ask for their “Schedule E” tax form.

Another key to Jay’s formula is turning motivated sellers into bankers. This is something that a lot of us, myself included, need to work on. If we follow Jay’s advice and get the seller to finance at least part of the loan, the purchase process suddenly becomes much easier.

I also liked Jay’s memo system of dealing with renter problems. In using this system, I find it simplifies my dealings with renters. If you call and tell them to do something, they forget. If they see it in writing, in an official-looking memo, they will usually, but not always, do what you ask them to do. It reduces direct contact with them and it gives you written documentation in case you later need it later to remove them from the house. I like Jay’s comment “tenants don’t intimidate me because they are simply no match for my landlording skills.” A bold statement that we should all strive for.

Overall, there is a lot to like about this book. If offers sound advice for the new, and the seasoned, investor. The Columbo negotiating technique alone was worth reading.

Share this: | Digg | Ma.gnolia | Reddit | Stumble Upon | Technorati