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Get as many yards and colors of fold over elastic as you want. 1 yard = 4 hair ties. You can buy online (sunshineshoppesupply) or at a fabrics store. It should look like the pic above.
Cut the elastic into 9" segments. Start your knot by crossing the ends over each other with the pretty side facing up.
Pull the ends through like you're tying a standard knot.
Repeat this one more time so you will have a knot at the top of your hair tie.
Tighten the knot by alternately pulling the ends and the middle of band. Before it gets too tight test it on your hair to your desired tightness. Then adjust as needed.
If the ends are long you can trim them. I like to make a diagonal cut.
Finally, lightly burn the ends to keep them from fraying. It doesn't take much so be careful!