All Forum Posts by: Jay DeCima

Jermaine

A simple wealth plan is the best. I have done it for 40 years and 200+ homes in Northern Ca.

Why is it that very few people ever achieve their financial dreams and what do the few successful ones do differently from the ma­jority who fail? Could it be they plan to fail? I don’t think so. More likely they to plan. Many waste much of their most valuable resource, their time, trying to figure out ways to make money quick and easy without much effort. These people are only fooling them­selves. Nothing worthwhile is accomplished without some hard work.

When you begin your journey to financial independence, first you must determine where you want to go. Then decide how you will get there. What are the risks and what are the sacrifices? Are they worth the end result? Don’t complicate your plan. No one likes to follow a plan that’s overloaded with restric­tions and contingencies. Keep it simple.

I decided to buy older houses and small apartments that needed fix-up. My reasoning was, I can do much of the work myself. Plus, I can buy them for much less cash down because there are fewer serious buyers for rundown distress type properties. I also thought, and it proved to be correct, that once fixed and cleaned up with bright new paint, older rental houses would command about the same rents as equivalent sized newer houses.

Good luck.

Fixer Jay DeCima

Cam

I am not an agent or broker

Agents can help you, but the vision must be yours. I like to think of real estate sales people as a large task force capable of accomplishing anything. But it’s up to me to tell them exactly what tasks need to be done in order for me to accomplish my financial goals I also tell them I can buy a property quickly, almost overnight! To an agent, that means fast paydays. They all like that! Still, I let them know a property must fit my financial guidelines.

Obviously ‘run of the mill properties, won’t do! Proper qualifica­tions are needed to determine if it’s a candidate. My first agent, Merv, brought me my Hillcrest property which turned out to be a gold mine. It took me nearly four years to train Fred (my second agent) how to gather the kind of information I need for my line of work. My line of work, of course, is real estate investing for profit. That’s a lot different than merely investing in real estate. That’s what many naive investors do, and unfortunately they acquire properties all right, but what they’re missing is profits. Let me say this before I move on. Fred is an excellent real estate agent. He has many outstanding achievements to his credit. But the simple truth is, I need Fred to be snoopy and a house detective much like me.

Agents in my town know I’m a fix-up specialist, most have all seen my properties. I get many telephone calls from agents trying to sell me their own personnel listings. These agents would rather sell directly to me, hoping to avoid commission splits with another real estate office. Its my policy to always refer these callers to Fred. He will represent me and therefore be entitled to 50 percent of all commissions, normally three or four percent of the selling price. I call this running my agent through the multiple! By putting Fred in the deal I’ve effectively set him up to get a bonus payday that otherwise would not have happened. This is what I mean by taking care of your agents.

Good luck.

Fixer Jay DeCima

Tyler

I am not an agent or broker.

Keep it simple.  Let others help you. I have used this philosophy for 40+ years and 200+ rentals in Northern California.

Real estate agents account for 95 percent of all the real estate sales. Therefore, anyone who thinks going around agents is good business, needs to rethink the issue. In my own case, I would have nowhere near the real estate holdings if it weren’t for my professional real estate helpers. My two agent-brokers have been involved in 60 percent of all my activity, both buying and selling. Believe me, in this busi­ness you will need help if you expect to make any serious money any time soon.

I pay real estate commissions if agents bring me good deals. Real estate wealth has nothing to do with stiffing agents. If you get the reputation for being a “tightwad,” you could lose out on valuable tips and good deals simply because the sales people don’t want to deal with you. How much time would you spend with a client who thinks you don’t deserve to be paid?

I can buy a property quickly. To an agent that means fast paydays and they all like that. My requirements are: the property must fit my strict financial guidelines and just any property won’t do. Property qualifications are needed to determine if the property is a candidate. Agents won’t hang around you if you’re a looky-loo. No agent worth his salt can afford that nonsense. My agent’s job is to know exactly what I will buy. He doesn’t call me about every property for sale in Redding. A good agent will immediately qualify the property to determine if it has potential. My agent knows I don’t normally want deals where new bank financing is required. He also knows I want sellers who will carry paper. He knows I rank small “challenged” properties, like four to six houses on a single lot or a bunch of ugly rundown duplexes, at the top of my buying list. When he hears about those kinds of properties, he acts quickly. Finding a good agent is not a lot different than finding a good wife or husband. It’s simply a matter of weeding out until you find the right combination.

Enjoy the journey.

Fixer Jay DeCima

Pam

Just a few thoughts from an ol' timer in Northern Calif.

I have invested here for 40+ years and at my high point had 200+ rental homes.  If I bought these one at a time, that would have taken a lot of time.  Rather I buy groups (5-12) of houses on a single parcel. These will be older (needing work), always in the older part of town (not suburbs). Because the seller knows I can't get bank financing for junk properties over 5 units, 85% of the time I get seller financing.  My down is usually about 10%, or about the same dollars you would put down on single family home in the burbs (probably with terrible cash flow).

One of the major benefits in this business is that it’s very stable and almost 1.00 percent predictable. You can expect to enjoy a nice long career and a very rosy future if you invest in basic housing. Do not allow yourself to get side-tracked. .

A few words of caution are appropriate here. Do not get side-tracked. You must constantly stay on guard against the “slicksters” who expound on softer, easier and faster methods that will make you rich, I have discovered this vulnerability in myself. I suspect there is a close relationship between a housing entrepreneur (which I am) and a “make it quick” speculator which I ain’t. I’m just a sucker for slick sounding get rich schemes.

After many years investing and with much self-discipline, I have learned to listen politely, nod my head and finally say no thank you. I’m in the housing business and that’s all I can handle at this time 

I shall always be grateful to those people who sold me on the proposition that investing in income producing real estate was truly a solid and proven pathway that leads to financial independence. I also discovered it’s the same path that leads to a genuine personal freedom. Real estate investing has given me the opportunity to control my own life and all my affairs.

People often ask me, “What do you enjoy most about being your own boss? Is it making more money or is it the freedom to spend your time doing the things you really want to do?” The answer is both. The way I see it, life would be very dull indeed if I had to spend all my waking hours stacking my real estate earnings in a room and guarding it. On the other hand, without cash flow or profits, I wouldn’t be able to do all the things I like to do even with my freedom.

That was my problem working at the phone company. When I finally got enough seniority to take a five week vacation, I could never accumulate more than two weeks of extra money to enjoy it.

Good luck.

Fixer Jay DeCima

Javon

I just posted something similar to a newbie.

What you need is education and a plan or you will waste a ton of time and money.

I have investing for a long time. Let me give you some thoughts to make sure you are looking at real estate investing as a BUSINESS and not a HOBBY.

Every investor should know prices in his investment area whether they buy and sell or hold for rentals (I do not suggest you go out of state especially if you are a newbie.....you lose control).

Tons of information about investment properties is handed out to potential buyers by selling agents and brokers, which don’t mean “diddlysquat” about bottom line results. In the business of profit making, you must focus on two important numbers. First… What will your customers pay for your product? Second… Can you afford to pay (purchase price) to provide your product and still make a profit for yourself? You should not move forward (in my opinion) without the answers.

In the rental business, you need to know what the majority of renters can afford to pay in your area. For example, in my town I rent many 2 bedroom, single bath, houses to young couples with a small child or two and also to seniors. Both these customers cannot afford rents over $750 per month. Knowing what my customers can afford helps dictate how I buy properties. Smart investors will study the marketplace in order to deliver the right product (affordable houses) to their customers. It’s important to remember – if my tenants can’t afford to pay for my houses – I can’t either! It would be very unwise to own a stable of houses renting for $900 per month if you lived in a town full of $750 renters. If the majority of renters in your area can easily afford your houses, it’s much easier to keep them occupied and profitable.

One way you can learn rent values is to pretend you’re a renter in search of housing. Call telephone numbers in the classified ads or Craigslist for different locations within your investment area. Drive out to see what $700 per month will buy you in a two-bedroom house or apartment. Do the same for a $500 rental, etc. Once you become familiar with different parts of your town, you’ll be able to read the prices online and the newspaper ads and then have a pretty good idea about what the properties look like and how well they’re maintained.

Take care.

Fixer Jay DeCima

Nordiah

You have done fine so far without a parter.  Why change now?

Perhaps just change your idea of what to look for..........For 40+ years I have bought GROUPS of houses on a SINGLE PARCEL in Northern CA. These are always older, in the old parts of town or downtown, not suburbs. I usually pay about 10% down (about the same cash you would put down for a SFH in the burbs).

When you borrow money from banks to finance real estate, you’ll quickly discover that a group of rental houses and small apartments, properties with more than four units are a whole different kettle of fish than financing the home you live in! Mortgage money for investment properties is generally classified as commercial lending and most always comes at a much higher cost than residential loans. The reason is because bankers feel commercial loans are much more risky than a homeowner’s personal residence.

Seller financing happens when a property owner sells his property and agrees to carry back or finance the amount of the sale, less the amount received for a down payment. Say for example; he selling price is $100,000 and the down payment is $10,000. In this case, the seller would agree to finance the balance of the sale price, which equals $90,000. In other words, the seller substitutes himself in the place of a bank or some other institutional lender.

When you develop the skills to negotiate and purchase properties using this type of financing, you’ll be setting the stage for some very lucrative profits that the average investor doesn’t even know about. Not only will you place yourself in a position to earn future profits, but you’ll also enjoy a much safer investment strategy without any personal risk. That’s because seller financing is not really a loan! Not one penny of cash money is actually disbursed from the seller to you, the buyer. It’s really an extension of credit granted by the seller to facilitate his sale!

Should something go haywire and you find yourself unable to make the payments, and you default, the seller (lender) can take his property back, but that’s all! He cannot take other assets you own to satisfy the unpaid balance or deficiency.f Most bank lenders can come after everything you own to satisfy their mortgage debt because you are personally liable until it’s paid in full.

About the lucrative profits I mentioned above! Let’s take the $100,000 sale where the seller accepted $10,000 down and agreed to carry-back or finance $90,000. I would bet within 3 or 4 years after the sale when the balance is still close to $90,000…if you were to dangle $60,000 cash in front of the sellers nose, he would take this discounted amount in a New York minute. When he does, you’ve just made 30 grand. Believe me… you want seller financing!

Forget the partner......just beef up you education on something a little different. Research it.

Good luck.F

Fixer Jay DeCima

I do like your humor Daniel.

Buying a $600K++ SFH for cash flow............Just kidding you..........buy funny.

Let me give you some serious food for thought:

When you purchase average properties in average con­dition, you can expect to pay average price and get average terms. Equity creation or build-up is somewhat difficult when all things are average. Equity build-up comes from several sources. The first is very insignificant. It’s the principal portion of each mortgage payment, which adds to equity in the property with each monthly payment.

The second kind of equity is what I do. It’s called ADDING VALUE. It comes from fixing up a property or straight­ening out people problems by initiating better manage­ment. This kind of equity is forced equity. The owner makes it happen.

One of the best ways to create equity is to improve the financial performance of a property (raising rents). For example, if I’m able to fix up a rundown property and increase rents from $20,000 annually to $30,000 that is FORCED EQUITY CREATION. If the property is worth eight times the gross rents, I’ve increased the value from $160,000 to $240,000. That’s an $80,000 equity addition. It has nothing to do with normal appreciation. It was forced to increase by myA fix-up work. If the building appreci­ates 5 percent next year, that will add $12,000 equity to the $80,000 I’ve created. The operating word here is CREATE. I make it happen.

Good luck and again just kidding on the funny stuff.

Fixer Jay DeCima

I have investing for a long time.  Let me give you some thoughts to make sure you are looking at real estate investing as a BUSINESS and not a HOBBY.

Every investor should know prices in his investment area whether they buy and sell or hold for rentals (I do not suggest you go out of state especially if you are a newbie.....you lose control). 

Tons of information about investment properties is handed out to potential buyers by selling agents and brokers, which don’t mean “diddlysquat” about bottom line results. In the business of profit making, you must focus on two important numbers. First… What will your customers pay for your product? Second… Can you afford to pay (purchase price) to provide your product and still make a profit for yourself? You should not move forward (in my opinion) without the answers.

In the rental business, you need to know what the majority of renters can afford to pay in your area. For example, in my town I rent many 2 bedroom, single bath, houses to young couples with a small child or two and also to seniors. Both these customers cannot afford rents over $750 per month. Knowing what my customers can afford helps dictate how I buy properties. Smart investors will study the marketplace in order to deliver the right product (affordable houses) to their customers. It’s important to remember – if my tenants can’t afford to pay for my houses – I can’t either! It would be very unwise to own a stable of houses renting for $900 per month if you lived in a town full of $750 renters. If the majority of renters in your area can easily afford your houses, it’s much easier to keep them occupied and profitable.

One way you can learn rent values is to pretend you’re a renter in search of housing. Call telephone numbers in the classified ads or Craigslist for different locations within your investment area. Drive out to see what $700 per month will buy you in a two-bedroom house or apartment. Do the same for a $500 rental, etc. Once you become familiar with different parts of your town, you’ll be able to read the prices online and the newspaper ads and then have a pretty good idea about what the properties look like and how well they’re maintained.

Take care.

Fixer Jay DeCima

Antoinette

After doing this investing thing for 40+ years (buy and hold in Norther CA) let me say:

Besides the money, being your own boss gives you many other choices. The first choice I often call “The Ultimate Freedom” . There’s no more dreading Monday mornings or driving the crowded freeways before its even daylight. Hassles with the boss about being “passed over” for promotions, "pidley" cost of living raises and boring job assignments are all memories of the past. Believe me, no one ever invented a better way to earn a living and having so much personal freedom doing it.

Many years ago I quit my 23-year telephone job. At first, I was afraid I might starve to death, but I didn’t. I was constantly worried about losing my company paid health insurance, but soon I was earning enough money to buy my own. I think the fear of losing a steady (every two weeks) paycheck bothered me the most. Those fears all disappeared when I sold my first fixed-up investment property for a bigger profit than two years’ worth of tele­phone company paychecks put together!

Looking back now, I can honestly tell you the fear of change will be your biggest obstacle. It’s the uncertainty of what will happen next! Obviously, no one gets any guarantees. However, I can tell you from experience, most fears are easy to overcome with knowledge. As you de­velop your personal skills, confidence gradually pushes your fears behind you. Of course, that’s hindsight. No one told me that when I first started out.

“ENJOY THE JOURNEY”, Steve Jobs.

Take care.

Fixer Jay DeCima

Here is my ideas about agent based on my 40 years of buying rental homes in Northern CA.

Agents can help you, but the vision must be yours. I like to think of real estate sales people as a large task force capable of accomplishing anything. But it’s up to me to tell them exactly what tasks need to be done in order for me to accomplish my financial goals I also tell them I can buy a property quickly, almost overnight! To an agent, that means fast paydays. They all like that! Still, I let them know a property must fit my financial guidelines.

Obviously ‘run of the mill properties, won’t do! Proper qualifica­tions are needed to determine if it’s a candidate. My first agent, Merv, brought me my Hillcrest property which turned out to be a gold mine. It took me nearly four years to train Fred (my second agent) how to gather the kind of information I need for my line of work. My line of work, of course, is real estate investing for profit. That’s a lot different than merely investing in real estate. That’s what many naive investors do, and unfortunately they acquire properties all right, but what they’re missing is profits. Let me say this before I move on. Fred is an excellent real estate agent. He has many outstanding achievements to his credit. But the simple truth is, I need Fred to be snoopy and a house detective much like me.

Agents in my town know I’m a fix-up specialist, most have all seen my properties. I get many telephone calls from agents trying to sell me their own personnel listings. These agents would rather sell directly to me, hoping to avoid commission splits with another real estate office. Its my policy to always refer these callers to Fred. He will represent me and therefore be entitled to 50 percent of all commissions, normally three or four percent of the selling price. I call this running my agent through the multiple! By putting Fred in the deal I’ve effectively set him up to get a bonus payday that otherwise would not have happened. This is what I mean by taking care of your agents.

Good Luck

Fixer Jay DeCima