Investing in Fixer-Uppers : A Complete Guide to Buying Low, Fixing Smart, Adding Value, and Selling or Renting) High

Investing in Fixer-Uppers......Page 4
Copyright......Page 5
Introduction......Page 14
Contents......Page 6
Part One. Getting Started in Fixer-Uppers......Page 18
1. How to Make $1,000,000 Working Smarter......Page 20
White Picket Fences Provide Big Payback......Page 21
Fix-Up Profits vs. Wages at the Sawmill......Page 22
Where Does All the Money Come From?......Page 23
It Doesn't Cost a Ton of Money to Begin......Page 26
The “Adding Value” Strategy and Why Properties 
Must Have Potential......Page 27
Less Competition Always Equals Better Bargains......Page 29
Classified Ads Can Sometimes Lead to the Gold Mine......Page 33
Find What You're Looking For and Act Quickly......Page 34
Fixing People Problems Is Worth Big Bucks......Page 35
Flexible Sellers Provide High-Profit Opportunities......Page 37
Good Financing Sets the Stage for Big Profits......Page 38
Looking for Loans in All the Wrong Places......Page 39
Fixer Skills Turn Ugly Duckling into Beautiful Swan......Page 40
Waiting for "Mr. Good Buyer"......Page 42
Learn to See the Money-Making Potential in Ugly Houses......Page 44
Selecting the Right Strategy Is Key to Success......Page 45
Fixing Up Looks and Management Earns Profits......Page 46
Fixing Houses Is Equal Opportunity for All......Page 47
Save 70% Doing Your Own Fix-Up......Page 48
Sizzle Fix-Ups Provide High Investment Returns......Page 49
Biggest Payday Comes from Knowing Where to Kick......Page 50
Size Yourself Up--What Are You Capable of?......Page 51
Getting Started Ranks First......Page 53
Real Estate Investors Must Think Like Business Folks......Page 54
Investing My Way--Four Basic Ingredients......Page 56
It’s Important to Position Yourself to Make Money......Page 60
If You’re Short on Knowledge or Money, “Adding Value”
Strategy Is a Perfect Opportunity......Page 61
Looking for Mr. Right, Not Mr. Perfect......Page 62
Finding Sellers Who Truly Want to Sell......Page 63
Don't Be Stopped by Lack of Cash......Page 64
Spreading the Risk......Page 65
Diversification Later Is the Best Strategy......Page 66
The Best Odds for Your Success......Page 67
10 Must-Do's That Will Speed Up Your Success......Page 68
The House Detective Approach......Page 70
Before You Invest, Do Your Homework—Obtain a Property Profile......Page 71
The Four Basic Methods of Finding and Buying Fixers......Page 73
Finding Sellers Who Truly Need to Sell......Page 81
Most Common Reasons That Motivate Sellers......Page 83
Key Factors for Making a Bargain Purchase......Page 85
Look for Owners with Equity......Page 86
It Pays to Be Snoopy......Page 87
What to Do When You Find the Right Property......Page 90
Break Ranks with the Typical Buyer......Page 92
6. My Yellow Court Houses: The Right Property
 and Seller Make for a Profitable Deal......Page 94
Timing Is Everything, from Wine-Making to Real Estate......Page 95
Making an Offer......Page 96
Success!......Page 99
The Goal Is Finding Profitable Deals......Page 101
7. Good Realty Agents Don’t Cost You Money—They 
Help You Make It......Page 102
How to Find an Agent Who's Right for You......Page 103
Five Important Benefits an Agent Provides......Page 105
No-No's to Avoid If You Expect Loyalty......Page 107
Your Real Estate Agent Can Help You Build Wealth......Page 108
Complex Formulas Are Not Necessary......Page 109
What Are Gross Rent Multipliers and Why Are They Important?......Page 110
Selecting the Right Location......Page 111
Five Common Locations and Their Investment Potential......Page 114
How to Calculate What You Should Pay......Page 117
Jay’s Super Simple Profit Strategy: Up the 
Rents and Improve the GRM......Page 119
There's a Time to Sell and a Time to Buy......Page 120
Rely on Cash Flow, Not Speculation About the Future......Page 121
Overpaying--The Deadliest Investor Sin......Page 122
Investing Long Term for Future Growth......Page 123
Study the Numbers and Keep It Simple......Page 125
Unit Cost and Rent-to-Value Ratios: How to Determine if a Property Will Be Profitable......Page 126
Jay's Income Property Analysis Form......Page 127
The Most Controversial Expenses......Page 133
Always Get a Second Opinion......Page 134
Develop the Right Approach......Page 135
Winning Over the Seller Leads to Winning Negotiations......Page 137
The Three Most Important Buyer Objectives......Page 138
It's Always Best to Let the Seller Participate......Page 139
Verify the Actual Expenses......Page 140
Favorite Concessions for Buyers to Ask For......Page 141
Typical Negotiations Work Like This......Page 142
Successful Negotiations Put Money in Your Pocket......Page 144
Don't Fix Things That Don't Pay You Back......Page 146
What You See Counts for Everything......Page 147
My Two- Part Fix-Up Strategy......Page 148
The Foo- Foo Cover-Up Strategy Exposed......Page 149
Sizzle Fix-Up Offers the Biggest Profits......Page 150
Houses with All the Right Things Wrong......Page 152
The Fix-Up Revolution—Made to Fit and 
Ready to Use......Page 156
How to Estimate What the Job Will Cost......Page 160
Recovering Fix-Up Costs......Page 161
Keep Your Eye on the Ball......Page 164
Playing the Appreciation Game......Page 165
The Magic of Compounding......Page 168
Four Ingredients That Produce Profits......Page 170
Not Everything Can Be Measured in Dollars......Page 172
Brain Compounding Can Increase Your Wealth......Page 173
Adding New Profit Bulbs on My Money Trees......Page 174
Fixer Jay's Favorite Profit Bulbs......Page 175
Creating Equity with Very Little Cash......Page 179
Knowing the Real Reason for Selling Is a Big Advantage......Page 180
The Hillcrest Cottages Transaction......Page 182
Fixing Up Hillcrest Cottages......Page 183
Removing the Risk from a "No-Down" Sale......Page 184
Part Two. Creative Financing......Page 186
Borrowing from the Bank Is Good for the Bank......Page 188
New Bank Loans Should Be an Investor’s 
Last Choice......Page 189
Buyers of Ugly Properties Get the Best Terms......Page 190
Financing That Fits the Needs of Both Parties......Page 191
Buying Back Your Own Debt Is Worth Big Bucks......Page 192
Why Would Anyone Want a Partnership?......Page 193
Partnerships Must Be Based on Mutual Needs......Page 194
Looking for Partners: The Selection Process......Page 195
How to Find a Money Partner......Page 196
Jay’s 60/40 Rule for Investing with 
a Money Partner......Page 197
A Simple A-B Partnership Plan......Page 198
Alternate Partnership Plan: Option to Purchase......Page 202
A Tenants-in-Common Partnership......Page 203
A Partnership Design Is Negotiable......Page 204
The Partnership Promise: A Co-Ownership Agreement......Page 205
Never Invest Without a Written Agreement......Page 206
Finding Money When You Don't Have Any......Page 207
A Sample Co-Ownership Agreement......Page 208
16. Sell Half the Property to Increase Your Income......Page 212
50% Sales Can Greatly Improve Cash Flow......Page 213
How to Market a Fixed-Up, Fixer Property......Page 215
Converting Negative Cash Flow into Positive......Page 217
17. Jay’s 90/10 Money Partner Plan for Cash-Poor Investors......Page 219
For Just 10% Cash, I Receive 50% Profit......Page 220
High Returns and Buying Power Are Keys to Plan......Page 221
Contributions Are Equal for Both Investors......Page 222
The Main Street Apartments: An Ideal 90/10 Partnership......Page 223
Give More of Yourself Than You Expect in Return......Page 227
18. 100% Financing with Seller Subordination......Page 229
Loan Terms Are More Important Than Interest Cost......Page 230
An Ideal Candidate for My 30-30 Seller Subordination Plan......Page 231
Where Does All the Money End Up?......Page 232
How Does a Seller Benefit?......Page 233
Lenders Want Clean, Sweet-Smelling Properties......Page 234
Paying Back the Sellers' Note......Page 236
No Limit to Creativity in Real Estate......Page 237
Variable Rate Mortgages Offer Another Option......Page 238
Bankers Like Homeowners with Steady Jobs......Page 239
Banker Enemy Number One: An Unemployed Loan Applicant......Page 240
Jay’s Five Basic Financial Documents for 
Borrowing......Page 241
More Than One Way to Profit......Page 244
Fix Up Your Rental Properties for Half the Normal Price......Page 245
How to Get Started from Scratch......Page 248
Dealing with the Local Housing Authority......Page 249
No-Money-Down Deals Are Very Possible......Page 250
Selecting the Right Property......Page 251
Watch Out for the Hidden Costs......Page 252
HUD Assistance with My Viola Cottages......Page 253
The Flip Side: Other Requirements by the City......Page 254
The Easiest Loan in Town......Page 255
The Application Process: Steps to Take with Properties You Own......Page 256
It Pays to Learn What Makes City Housing Tick......Page 257
You Help Yourself Most When You’re
 Helping Others......Page 258
20. Buying Back Mortgage Debt for Bonus Profits......Page 260
Look for Property with Private Mortgages......Page 261
Most Sellers Would Rather Have Cash......Page 263
Jay's Red Mustang Strategy......Page 264
Where Your Negotiating Skills Will Earn the Biggest Profit......Page 266
Timing Is Critical: Buy Back the Mortgage After Purchasing the Property......Page 267
Factors That Motivate Sellers to Give Discounts......Page 268
The Top Reasons Why Mortgage Holders Sell for Discounts......Page 269
Finding the Right Mortgages Is Well Worth the Search......Page 270
Jay’s Christmas Letter Generates Profits 
Year-Round......Page 271
Value, Like Beauty, Is in the Eye of the Note Holder......Page 272
Investors Need a Healthy Financial Diet......Page 273
We Do It for the Money......Page 274
Total Control over Money Decisions Is Key......Page 275
Success Means Wearing Many Hats......Page 276
The First Rule of Business Is to Define Your Customer......Page 277
Increasing My Odds for Success......Page 278
The Value of Tenant Cycling......Page 279
You Must Always Get the Money First......Page 280
The Application Form--What You Need to Know......Page 281
Rental Contracts Don't Need to Be Complicated......Page 283
Tenant Urgency--Not My Urgency......Page 285
Owners Should Do Evictions......Page 286
Repairs and Customer Service......Page 288
Obey the Laws of Habitability......Page 289
22. Tips for Dealing with Tenants......Page 291
Your Tenants Are Your Customers......Page 292
Limit Improvements to What the Rent Can Support......Page 295
Cut Down on Repair Visits—Get the Details 
over the Phone......Page 296
Collecting the Rents and Knowing Where to Draw the Line with Deadbeats......Page 297
Noncontact Management Works Quite Well......Page 299
Don¡¯t Get Bogged Down with Routine Stuff......Page 301
Join the Real World of Investing: Find a Mentor......Page 303
The Dream Alone Is Not Enough......Page 304
High Rent- to- Value Ratio Indicates Profits......Page 305
I Didn¡¯t Grow Up to Be a Landlord......Page 307
Avoid Doom and Gloom like the Plague......Page 308
Roadblocks—Your Momentum Will Carry You 
Around Them......Page 309
Positive Cash Flow Makes It All Worthwhile......Page 310
Appendix A. Income Property Analysis Form......Page 312
Appendix B. Typical Property Sketch......Page 314
Appendix C. Sample Co-Ownership Agreement......Page 316
Appendix D. Resources for Real Estate Investors......Page 320
Index......Page 324
About the Author......Page 337