All Forum Posts by: Jay DeCima

Jarrod

NO MONEY - TRY SOLVING PROBLEMS

After 40+ years and 200+ of my own rental homes in Northern California, and teaching on his subject for 30+ years here are some things I did or recommend to my students over the years (most of these students did not have a boatload of cash to begin, but they learned my kind of investing).

Let’s assume you wish to acquire income or profit-producing real estate with very little money and using what you can contribute, mainly time and personal effort. We’ll also assume you have the time and are willing to provide your personal labor. In other words, you are ready to go, right now! What kind of property might you expect -to !purchase without a cash down payment? Here are some I suggestions to help you decide:

A. Out-of-town owners who are not paying attention to what goes on at their rental properties.

B. Owners with financial problems.

C. Family problems (divorce, death, lifestyle change).

D. For-sale-by-owner ads (all newspapers).

E. Owners who have lost jobs and can’t pay their bills.

F. Elderly or disabled.

G. Inherited property owners-easy come, easy go men­tality.

H. Owners who advertise lease-option or even houses for rent. 

I. Job transfers: owner moved, now has two house pay­ments.

An important point to remember is that people don’t always tell you what their true motivation is. An owner who advertises a property seeking a lease-option could easily be searching for a way to rid himself of managing a property he can’t sell.

“The one common experience of all humanity is the challenge of problems.” – R. Buckminster Fuller

Good luck.

Fixer Jay DeCima

James

After 40+ years and 200+ of my own rental homes in Northern California, and teaching on his subject for 30+ years here are some things to ponder:

I have nothing against buying notes, but I would rather you buy real estate with seller financing and buy back at a discount later.  You don't even need a calculator for this.

Here is what I mean:

Perhaps the greatest opportunity missed when seller financing is not a part of your investment strategy is the chance to buy back your own mortgage debt later on from the beneficiary (that’s the seller you make your payments to). During the course of 20 years or so, many things change. Things like death, divorce, college funds, change of life-style and loss of employment or income can quickly create a serious need for immediate cash.

When you design your seller carry-back mortgages with the good terms (for you), like I teach students how to do, they have much less market appeal to professional note buyers. Note buyers like to have a late payment clause, pre­pay penalty, higher interest and much shorter terms. They won’t pay very much without them – hence the discount is generally too much for most sellers to accept.

What this means is that the mortgage you purposely designed with nice liberal terms is now worth much less if it’s sold before it’s paid off. Now you can buy it back much cheaper because “the seller probably can’t sell it to any­one who would pay as much as you. This strategy is worth big bucks when you do it right.

I purchased a $77,000 note for $41,500 just 31/2 years after I signed it. You’ll never get this opportunity dealing with banks.

Good luck.

Fixer Jay DeCima

Avisa

I posted this recently to a newbie: 

By the way San Bernardino and your are is very good for my kind of business. Many of my students over the last 35 years have invested there very profitably.

One question that I’m asked constantly: “Where can we find the kind of properties you talk about?”

The most common alibi I hear is, “There’s no property in my home town like the ones you write about.” With very few exceptions, I must disagree. The proper­ties are there! You simply haven’t found them yet. There are several different reasons why you haven’t, however, I’ve found most folks simply haven’t been looking for them.

Most investors I know tend to do the traditional kind of prop­erty searching. If they decide to be apartment owners, they look mostly at tradition apartment buildings. Single house investors generally drive through the ‘burbs’ in search of prey. Hardly anyone is goofy enough to buy 5 house on one lot or an old motor lodge. I’m going to suggest that you broaden your vision a bit. After all, non-traditional properties can be lots more fun-as well as more profitable.

First of all, don’t panic. My kind of properties are almost always avail­able; you just haven’t found them yet. Finding the right properties,meaning the kind that will produce monthly cash flow and long-term profits, is one of the most important skills you must develop to enjoy any success in this business.

With 40+ years and 200+ home rentals of experience, I have taught my students the following:

• Ideally I am looking for groups of run down houses (or combo of houses, duplex, garage conversion, maybe a mobile or 2).
• Almost alway will be located on older parts of town (not slums or suburbs).

• 85%+ of my deals are with seller financing........Why? Banks won't finance ugly properties over 4 units. Investor sellers know this. If I sell, I take back the financing.
• Because units are ugly and rents are low, when I clean and fix and raise the rents about 50% over 2 years (remember rents are under market at beginning).....I just about double the price of the property.
• I don't suggest you buy out of state
• I manage my tenants by mail. I developed this strategy years ago to save my sanity.

Below is a sketch of what I teach:

You must always keep in mind that finding profitable deals is our goal, not just finding lots of deals.

Good luck.

Fixer Jay DeCima

Tyler

I posted this recently to a newbie:

One question that I’m asked constantly: “Where can we find the kind of properties you talk about?”

The most common alibi I hear is, “There’s no property in my home town like the ones you write about.” With very few exceptions, I must disagree. The proper­ties are there! You simply haven’t found them yet. There are several different reasons why you haven’t, however, I’ve found most folks simply haven’t been looking for them.

Most investors I know tend to do the traditional kind of prop­erty searching. If they decide to be apartment owners, they look mostly at tradition apartment buildings. Single house investors generally drive through the ‘burbs’ in search of prey. Hardly anyone is goofy enough to buy 5 house on one lot or an old motor lodge. I’m going to suggest that you broaden your vision a bit. After all, non-traditional properties can be lots more fun-as well as more profitable.

First of all, don’t panic. My kind of properties are almost always avail­able; you just haven’t found them yet. Finding the right properties,meaning the kind that will produce monthly cash flow and long-term profits, is one of the most important skills you must develop to enjoy any success in this business.

With 40+ years and 200+ home rentals of experience, I have taught my students the following:

• Ideally I am looking for groups of run down houses (or combo of houses, duplex, garage conversion, maybe a mobile or 2). These groups may have 5 to 15 units described above.
• Almost alway will be located on older parts of town (not slums or suburbs).
• 85%+ of my deals are with seller financing........Why? Banks won't finance ugly properties over 4 units. Investor sellers know this. If I sell, I take back the financing.
• Because units are ugly and rents are low, when I clean and fix and raise the rents about 50% over 2 years (remember rents are under market at beginning).....I just about double the price of the property.
• I don't suggest you buy out of state
• I manage my tenants by mail. I developed this strategy years ago to save my sanity.

Below is a sketch of what I teach:

You must always keep in mind that finding profitable deals is our goal, not just finding lots of deals.
Good luck.
Fixer Jay DeCim

Joe

I have been teaching this kind of investing to my student for 35 years. Many of them are newbies.

8 RULES FOR CAREER CHANGERS

• 1. Learn your local market. Know what properties should cost and what they can reasonably sell for. Learn how much rent you can get. Do these steps before you buy, not afterwards.
• 2. Learn to spot or identify hidden bargains quickly, then act fast to acquire them. Remember, competition is keen. You must develop a sixth sense for sniffing out hidden money-makers.
• 3. Develop a business sense...think like a retailer. This will help you to pay wholesale prices when you buy. Buying at retail prices and selling for retail prices simply won't work. Don't do it!
• 4. Invest...don't speculate. Investing is a plan to make money. You must be able to identify exactly how you will do it. That's why step one is necessary. Specu­lators are guessing without a plan.
• 5. Learn how-to do deals where you have 100 per­cent control or nearly so. Basically, this means owner financing with you doing the management. Avoid short payback notes and variable rate mortgages offered by the institutional lenders.
• 6. Learn how to live on tax-free or tax-sheltered income. Rents you collect are normally tax sheltered. Rehab loans, like Title Ones, are tax-free same as bor­rowing on equity or refinancing. When you collect $100 rent you get to keep $100. When you earn $100 in wages, you keep only $70. Taxes eat up the money you can easily keep to benefit yourself.
• 7. Learn landlording first hand from doing it. Manage your own customers (tenants). Many inexpe­rienced investors farm this function out to professional property managers. I consider this a serious mistake for new investors. Maybe it's okay later on, but owners should know the job inside and out first.

8. Once you have developed a plan that works well and consistently makes you money, stick with it until it quits working. Most investors suffer this common weakness. We're all suckers for a better mousetrap. Avoid the "too good to be true" temptation-it generally is.

Good luck 

Fixer Jay DeCima

Wade

For lower end Section 8 affordable units you have http://www.gosection8.com/

Free

Good luck.

Bryan

I posted this recently to a newbie:

One question that I’m asked constantly: “Where can we find the kind of properties you talk about?”

The most common alibi I hear is, “There’s no property in my home town like the ones you write about.” With very few exceptions, I must disagree. The proper­ties are there! You simply haven’t found them yet. There are several different reasons why you haven’t, however, I’ve found most folks simply haven’t been looking for them.

Most investors I know tend to do the traditional kind of prop­erty searching. If they decide to be apartment owners, they look mostly at tradition apartment buildings. Single house investors generally drive through the ‘burbs’ in search of prey. Hardly anyone is goofy enough to buy 5 house on one lot or an old motor lodge. I’m going to suggest that you broaden your vision a bit. After all, non-traditional properties can be lots more fun-as well as more profitable.

First of all, don’t panic. My kind of properties are almost always avail­able; you just haven’t found them yet. Finding the right properties,meaning the kind that will produce monthly cash flow and long-term profits, is one of the most important skills you must develop to enjoy any success in this business.

With 40+ years and 200+ home rentals of experience, I have taught my students the following:

• Ideally I am looking for groups of run down houses (or combo of houses, duplex, garage conversion, maybe a mobile or 2).
• Almost alway will be located on older parts of town (not slums or suburbs).
• 85%+ of my deals are with seller financing........Why? Banks won't finance ugly properties over 4 units. Investor sellers know this. If I sell, I take back the financing.
• Because units are ugly and rents are low, when I clean and fix and raise the rents about 50% over 2 years (remember rents are under market at beginning).....I just about double the price of the property.
• I don't suggest you buy out of state
• I manage my tenants by mail. I developed this strategy years ago to save my sanity.
• Below is a sketch of what I teach:

You must always keep in mind that finding profitable deals is our goal, not just finding lots of deals.

Good luck.

Fixer Jay DeCima

Christopher

Many times I have presented at NORCALreia in Sacramento.  Check their web site.

Large group of good people helping each other.

Maybe I will see you there one day.

Gook luck.

Fixer Jay DeCima

Eric

I posted this recently to a newbie:

One question that I’m asked constantly: “Where can we find the kind of properties you talk about?”

The most common alibi I hear is, “There’s no property in my home town like the ones you write about.” With very few exceptions, I must disagree. The proper­ties are there! You simply haven’t found them yet. There are several different reasons why you haven’t, however, I’ve found most folks simply haven’t been looking for them.

Most investors I know tend to do the traditional kind of prop­erty searching. If they decide to be apartment owners, they look mostly at tradition apartment buildings. Single house investors generally drive through the ‘burbs’ in search of prey. Hardly anyone is goofy enough to buy 5 house on one lot or an old motor lodge. I’m going to suggest that you broaden your vision a bit. After all, non-traditional properties can be lots more fun-as well as more profitable.

First of all, don’t panic. My kind of properties are almost always avail­able; you just haven’t found them yet. Finding the right properties,meaning the kind that will produce monthly cash flow and long-term profits, is one of the most important skills you must develop to enjoy any success in this business.  

With 40+ years and 200+ home rentals of experience, I have taught my students the following:

• Ideally I am looking for groups of run down houses (or combo of houses, duplex, garage conversion, maybe a mobile or 2).
• Almost alway will be located on older parts of town (not slums or suburbs).
• 85%+ of my deals are with seller financing........Why?  Banks won't finance ugly properties over 4 units.  Investor sellers know this.  If I sell, I take back the financing.
• Because units are ugly and rents are low, when I clean and fix and raise the rents about 50% over 2 years (remember rents are under market at beginning).....I just about double the price of the property.
• I don't suggest you buy out of state
• I manage my tenants by mail.  I developed this strategy years ago to save my sanity.
• Below is a sketch of what I teach:

You must always keep in mind that finding profitable deals is our goal, not just finding lots of deals!

Good luck.

Fixer Jay DeCima

Lou

I am not an agent or broker. 

Try to find ONE agent in an area to work with. Think long term if you are investing in a certain area. Here is what I often teach my students

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?

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.

Don’t send agents on a wild goose chases. 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 my area. 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 multiple unit 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 one that seems to like you more than the rest.

Good luck.

Fixer Jay DeCima