All Forum Posts by: Jay DeCima

Mike

You are right that many sellers that took back the seller financing will cash out at a discount.  Why? Because they needed a chunk of cash at that moment, instead of small monthly payments.  You or I may do the same.

The So. Seminars from 2016 were filmed and are available.  Please message me.

Good luck with the seller financing.  It is so important to speed up your buy and hold real estate investing.

Go luck.

Fixer Jay DeCima

Thanks for being my customer Mike.

I hope the book gives you an introduction to what I call "investing with a twist". Once one understands this, the cash flow is way more than one would get buying houses one at a time.

Good luck with your investing.

Let me know if I can help.

Best 

Fixer Jay

Norcalreia.com is excellent.  David Granzilla

Tell him Fixer Jay referred you to him.  Many times I have presented to his club and did training seminars for their members.

Best.

Fixer Jay DeCima

Taylor

At my high water mark I had 250+ rental homes in Norther Calif.  The kind I buy are not really affected much by the overall economy.  The values are based on the property cash flow.

I did this over 40+ years but I could not have done this buying one single family home at a time (which IS affected by the current economy). Takes way too much time and effort.

I developed a plan to buy groups of older homes (usually 5 or more) on a single parcel.  These will always be in older parts of town (not war zones) and in need of fix up. 85% of my deals had seller financing (sellers know they need to carry financing on this type of property because the bank WILL NOT TOUCH THIS KIND OF RUN DOWN PROPERTY OVER 5 UNITS).

The rents are under market when I buy, because of the condition.  I teach my students that if you raise the rents 50% over 2 years (remember they are under market when you buy) and fix the property up, you just about DOUBLE the value of the property (and have nice cash flow).  

How does it double? Because you fixed it up, investors will pay more for it (if I sold). This can be calculate roughly by using the GRM, gross rent multiplier (all property rent of a year time divided into thee property price). If you fix up the property like I teach, you can raise the GRM by 2 points (eg from a 7 to a 9). Increasing this GRM by 2 points and the 50% rent increase over 2 years is where you see that you have about doubled the property value.

Food for thought.  Good luck.

Best

Fixer Jay DeCima

Shiloh

Over 40+ years of investing I developed my Managing Your Tenants By Mail process.  I created this to keep my sanity when I had 250+ rentals at my high water mark.  This will eliminate most personal, usually emotionally charged, tenant encounters.

Mark

Give me your email and I will send my property analysis form and the accompanying details how to fill it in.

I have been using this for over 40 years with my cash flow rentals and taught my students how to use it.

It is especially useful when I am getting seller financing (85%+ of my deals).

Best

Fixer Jay DeCima

Sharon

Over the last 40+ years investing in all kinds of real estate, I eventually honed my buy and hold plan.

I have done flips and wholesale deals but quickly realized this is really a job.  You get taxed at the highest personal gains bracket and pay social security like an employer (for you and you as employer).

For 28 years I have taught my students my COLONY TYPE INVESTING.  My colony is a group of houses (usually 5+) on a single parcel.

With these type of older, in need of fix up, in older part of town groups I almost always get seller financing.  When I eventually sell, I WANT TO OFFER SELLER FINANCING.

Because rents are low because of condition, I teach my students how to raise rents by 50% over 2 years, fix up the property..........these 2 things usually DOULBLES the value of the property.

Increase rents go to my pocket for many, many years into the future.

Why don't you spend some of your time exploring this type of investing.  If you like it, I can help you.

Best.

Luis

I just posted the below today to a different investor with similar questions.

From my 40+ years in cash flow investing, I have never been a fan of jumping on a plane and buying in other parts of the country.  Many parts of country have no appreciation.

Try this.  Get a map of your area.  Online or with a pen and a compass, draw circles until you are in an old area, not war zone, that might have some of below items.  Way easier to drive 60-90 minutes than fly somewhere.

You have control this way.  

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Previous post:

Some food for thought. Here is my way of investing for meaningful cash flow.

For 40+ years in Northern Calif. I did all kinds of real estate investing. I love it all.

But I quickly found that buying one single family house at a time with no "real" cash flow and hoping for appreciation was not a recipe for financial success in my lifetime. Way too slow and boring.

Fast forward. Here is the plan I used to get 250+house rentals at my high mark (they are houses but not like the one mentioned above).

Plan:

-Buy GROUPS of older houses on a single parcel.

-These could be a combination of small houses, cottages, duplexes, conversions, legal non-comforming, small apartment on a SINGLE PARCEL.

-Older parts of town, not dangerous parts.

-Ideally they need fix up, probably because of weak management.

-5 or more units. This makes it ideal for seller financing. Banks will not loan on rundown properties with 5 or more units. The seller knows this and will almost always be open to carry the financing. 85% + of mine had seller financing.

-Seller financing can be terms that are beneficial to you: Term, no payments for awhile, graduated payments. What ever you need to get cash flow.

-I usually put about 10% down.

-Because the units are run down, the rents at time of purchase are almost always below market.

-Because they are run down the GRM (gross rent received from property for a year) is lower than it would be if units were fixed up.

-My goal over a 2 year period was to fix up the units, get better tenants over that period and raise rents by 50%. Remember they were already below market and fix up raises rents. Because I fixed the units up I will raise the GRM that an investor will pay( IF I were to sell) by 2 points.

-Raising rents by 50% and the GRM by 2 just about DOUBLES the value of the property. Very doable.

-I manage them, usually using my Managing By Mail techniques. I developed this to keep my sanity in the property management part of the business. Way less personal contacts with tenants.

-Years later when it came time to sell, I INSISTED ON CARRYING BACK THE FINANCING. I call this PAJAMA MONEY. Remember I forced up appreciation at the beginning by fix up and have many many years of general market appreciation (if no market appreciation, I still do very well). At the beginning of each month I can go to my mailbox, pick up the checks for the buyers of my properties..........I can do this in my PAJAMAS.

-Buying groups of houses is way safer than just buying one. A vacancy with 1 house is 100% vacancy. If I have vacancy with 5 houses, it is only 20% vacancy. 80% of other rent keeps rolling in each month.

Message me if you have questions.

Best of luck.

Fixer Jay DeCima

Rick

Some food for thought.  Here is my way of investing for meaningful cash flow.

For 40+ years in Northern Calif. I did all kinds of real estate investing.  I love it all.

But I quickly found that buying one single family house at a time with no "real" cash flow and hoping for appreciation was not a recipe for financial success in my lifetime.  Way too slow and boring.

Fast forward.  Here is the plan I used to get 250+house rentals at  my high mark (they are houses but not like the one mentioned above).

Plan:

-Buy GROUPS of older houses on a single parcel.  

-These could be a combination of small houses, cottages, duplexes, conversions, legal non-comforming, small apartment on a SINGLE PARCEL. 

-Older parts of town, not dangerous parts.

-Ideally they need fix up, probably because of weak management.

-5 or more units.  This makes it ideal for seller financing.  Banks will not loan on rundown properties with 5 or more units.  The seller knows this and will almost always be open to carry the financing.  85% + of mine had seller financing.

-Seller financing can be terms that are beneficial to you:  Term, no payments for awhile, graduated payments.  What ever you need to get cash flow.

-I usually put about 10% down.

-Because the units are run down, the rents at time of purchase are almost always below market.

-Because they are run down the GRM (gross rent received from property for a year) is lower than it would be if units were fixed up.

-My goal over a 2 year period was to fix up the units, get better tenants over that period and raise rents by 50%. Remember they were already below market and fix up raises rents. Because I fixed the units up I will raise the GRM that an investor will pay( IF I were to sell) by 2 points.

-Raising rents by 50% and the GRM by 2 just about DOUBLES the value of the property. Very doable.

-I manage them.  I developed this to keep my sanity in the property management part of the business.  Way less personal contacts with tenants.

-Years later when it came time to sell, I INSISTED ON CARRYING BACK THE FINANCING.  I call this PAJAMA MONEY.  Remember I forced up appreciation at the beginning by fix up and have many many years of general market appreciation (if no market appreciation, I still do very well). At the beginning of each month I can go to my mailbox, pick up the checks for the buyers of my properties..........I can do this in my PAJAMAS.

-Buying groups of houses is way safer than just buying one.  A vacancy with 1 house is 100% vacancy.  If I have vacancy with 5 houses, it is only 20% vacancy.  80% of other rent keeps rolling in each month.

Nirzhar

Let me suggest that you pause a moment.

I like all kinds of real estate and have invested in most of them over my 50 years in this great real estate investing business.

Though I have done many flips, I learned after awhile that, for me, they did not lead to my financial success.

What I quickly learned:

• There are few tax benefits with flips
• You pay the highest rate of taxes (pretty much like a W-2 wage earner)
• Surprise..........you pay Social Security like you were a business
• (I found this the hard way). Your calculated profit figures of what you should get at the close of escrow are not the same as what you take home.  "Investment profit evaporation."
• If you are trying to make a living doing this you need to identify your next property almost before you close on the current one.  Too much work.

When I changed to buy and hold of Colony houses, my bank account grew quickly.  Colony houses are groups of older houses, duplex, conversions, etc. on a single parcel in older parts of towns (not war zones).  

At my "high water mark" I had 200+ monthly rental checks coming in from my Northern California rentals.

I also learned:

• By fixing up units when I bought them, I FORCED UP APPRECIATION that was not taxable today.
• In addition to forced appreciation, I enjoyed the market appreciation over the years.
• Tenants, that I never knew previous to renting to them, were paying my mortgages and ALL MY BILLS and my lifestyle.
• In later years, I sold by carrying the financing and collecting monthly checks from the buyer.  I call this Pajama Money.  I could pick up these checks on the first of each month by going out to my mail box in my PAJAMAS.
• Depreciation when you have many rentals is very good for keeping you taxes down.
• Many other tax benefits.....car, computer, tools, milage, software, etc.

Good luck.  Personal message me if I can be of help.

Take care.

Fixer Jay DeCima