Fixer investors enjoy a major advantage over all the other investors because there’s no up and down cycles to slow you down. Unlike the general housing market, the fix-up strategy never changes regardless of what the economy does. Although I currently own a number of American dream houses now -I don’t mind confessing – my fixer properties bought every single one of them! It doesn’t happen overnight, but when you consistently keep the profits rolling in, you have the money to take on bigger and better opportunities when they present themselves.
When you acquire properties with financing, you should always insist on long-term pay backs, the longer the better, but nothing less than 10 years. Be very careful when you agree on the amount of the mortgage payments. Investment properties that have combined mortgage payments higher than 50 percent of the scheduled income are 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 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.