Cash Flow Today - The Key To Longevity
by Fixer Jay Decima
When you own the houses, you have your own personal money machine! Obviously,
you must maintain the property and provide the necessary management- But, in
exchange for doing that, you control the money' It's yours to spend any way you
choose. Owning your own widgets is the surest path to financial independence.
The basis for wealth behind nearly every rich person can be traced back to the
ownership of a patent, a copyright or a deed! Owning income real estate puts you
in with the right crowd.
Well-Financed Houses Are Very Little Risk
In terms of investment risk, I'm talking about the risk of losing your assets -
Rental properties, like the ones I own, are about the safest kind of investment
you can make. Naturally, you must avoid paying too much and taking on too much
mortgage debt. Residential renters are a much easier bunch to attract than
commercial tenants. Also, everyone needs a shelter. Houses are considered a
basic necessity of life. The danger of anyone taking your investment houses,
with any equity, is almost nil! If you buy them right and structure the
financing so your tenants can pay them off, you'll be very well rewarded for
your initiative.
Your Own Personal Money Machine
After many years of trying different strategies to make money with real estate,
I can tell you without the slightest "hiccup" - it's not a sound idea to buy
houses that don't pencil out on the day you acquire them or shortly thereafter!
There's only one reason in the world that I know of to buy investment real
estate, THAT'S TO MAKE MONEY. If it don't or can't, then I don't want it
regardless of whatever else I may like about it.
Buy Properties That Earn Big Profits TODAY
I have been "sucked-in" on FUTURE VALUE, HIGHER POTENTIAL and PRIDE OF OWNERSHIP
so many times, I'm embarrassed to admit it! Fortunately for me, I learned my
hardest lessons early in my career before I lost the ranch.
If your goals are similar to mine, which are investing for current income and
long- term security (at least until I'm senile), with the least amount of daily
management involvement, then my strategies will work for you like they do for
me. Naturally there are many things to learn and most of it should be
accomplished during the early stages of your investing. On-the-job training is
most effective! There are several important things you need to consider without
delay.
I Have Been 'Sucked-In' -
Don't Let Big Mortgage Payments Rob Your Profits
When you acquire properties with financing, which most of us do, you should
always insist on long-term paybacks. The longer the better, but nothing less
than 10 years.
Be very careful when you agree on the amount of the mortgage payments. In my
opinion investment properties that have combined mortgage payments higher than
50% of the scheduled income are a bit too risky, unless of course, you have
adequate back-up resources to pay for negative cash flow.
I'm always satisfied when my mortgaged properties earn me a small positive cash
profit consistently every month. Little profits allow me to buy more properties,
which in turn provide additional little profits! First thing you know, little
profits add up to big bucks.
Walt Disney was delighted to draw the first cartoons that moved on a big theater
screen. He was paid just $12 apiece for each one, but he kept drawing lots of
them, over and over again. Needless to say, his $12 drawings eventually made
Disney a very wealthy man. It didn't happen overnight, by any means, but when
you consistently keep the profits rolling in, you have the money to take on
bigger and better opportunities when they present themselves.
There Is No Substitute for Cash Flow
There are several good economic reasons why I favor keeping a flock of rental
houses but the reason dearest to me is - they furnish me with a pocket full of
cash every month, come rain or shine! Over the years, as the mortgages are
retired (paid off) I have extra cash on hand to buy discounted mortgages,
including buying back my own debt. It's a very lucrative companion business to
my real estate investing.
In my opinion, nothing comes ahead of cash flow! If you have it, you can
continue to grow. You can transition from smaller properties to larger ones or
fixers to pride- of-ownership. You can use your cash flow to buy mortgages for
passive income or take a trip around the world every month when the rents come
in. Cash gives you choices!
Bio:
Jay P. DeCima, known to many as "Fixer Jay" is a seasoned real estate investor
with more than 40 years of hands on experience; nearly half that time has been
devoted to Jay's specialty - fixing-up rundown houses and adding value. Fifteen
years ago, Jay Decima began teaching others about his money-making strategies at
seminars and at his popular house fixer camps in Redding, California.