First Chat
Posted on November 21, 2003
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Following is a partial transcript of the chat this morning, featuring the authors of THE WEEKEND MILLIONAIRE–Mike Summey and Roger Dawson:
Welcome to the chat, Ralph Roberts!
[Investment Chat]: Ralph Roberts has entered (10:59 am)
Dennis: You guys wrote a great book
Ralph Roberts: Excellent book!
Mike Summey: Thanks
Roger Dawson: Thank you
Dennis: Will you be appearing at any book stores in OHio
Mike Summey: Its the # 2 Best Selling real Estate book on amazon.com this morning.
Mike Summey: Probably, especially if you visit one near you and ask them to invite us. … continues
Dennis: Deal
Ralph Roberts: Mike was at my bookstore recently… and we have autographed books for sale now.
Mike Summey: I’ll be at Barnes & Noble in charleston SC in Dec & Jensen Beach FL in Jan
Ralph Roberts: at least signed by Mike… we’ll have to get Roger to visit again
Roger Dawson: Mike, I got the articles from the Asheville newspaper. It looked great!
Mike Summey: Thanks
Mike Summey: Dennis, where in Ohio are you from?
Dennis: Columbus
Mike Summey: I have friends in Columbus.
Dennis: Do you ever visit
Mike Summey: Not recently
Dennis: Go buckeyes
Mike Summey: Have you started investing yet?
Roger Dawson: I spoke there a couple of years ago. Nice town.
Dennis: No
Dennis: Yes
Mike Summey: I have to support Florida State & Furman, I have sons at both universities.
[Investment Chat]: LJ has entered (11:04 am)
Mike Summey: Hi LJ
[Investment Chat]: mn_newbie has entered (11:05 am)
Mike Summey: Welcome to the chat.
LJ: hellp
Dennis: I’m planning on following your weekend checklist
LJ: hello
Mike Summey: Welcome mn newbie
mn_newbie: thanks
Mike Summey: The checklist make it simple for people just getting started.
Mike Summey: Once you get the hang of things, you’ll find yourself doing a little of everything at the same time.
Roger Dawson: When you start you’ll be amazed how many tracts of homes there are that you never knew existed.
Mike Summey: LJ & mn newbie, where are you from
Dennis: You guys make it sound like fun
Mike Summey: It is.
Roger Dawson: It beats wages?
mn_newbie: I am from Mpls, MN
Mike Summey: It’s like playing Momopoly…for keeps.
LJ: so I’m in the middle of the book- great btw. I’ve invested in a few properties over the last five years but would like to get into it more. I live in DC and it seems the larger homes are renting more than the smailler ones. Is that the case in most parts of the country? Do you think DC is good market ?
[Investment Chat]: Ralph Roberts has entered (11:09 am)
Mike Summey: Welcome back Ralph.
Ralph Roberts: thanks
Roger Dawson: Mike, a reader Emailed me to ask: if you have a good property manager, why not buy out of town?
LJ: what about buying near colleges?
LJ: Any thoughts?
Mike Summey: College towns are great, but youhave to keep a closer watch of properties rented to students.
Roger Dawson: College towns are a stable enocomy but I’m not sure about renting to students.
Mike Summey: They tend to get a little rowdy at times and cause some damage.
Mike Summey: I’d recommend getting substantial security deposits and havin the parents co-sign.
Ralph Roberts: the professors might be good to rent to
Ralph Roberts: marginally less rowdy, at least
Mike Summey: A good property management firm will also check credits and criminal backgrounds before renting.
Roger Dawson: I think professors would make great tenants.
LJ: That all makes sense- thanks.
Mike Summey: Roger, I missed your question earlier about buying out of town.
Dennis: A freind of mine has $30,000 cash to start with but no credit. What would you recommend to him?
Mike Summey: If you have a great property manager and trust them completely, I don’t see a problem, but I prefer and recommend that you keep your investments as close as possible.
Mike Summey: The cash will allow your friend to leverage a lot of owner financing.
LJ: Good question…after you answer that, what amount of reserves would you recommend having before you get into a rental?
mn_newbie: I have been to a couple of RE Investment seminars/classes and they always hand out detailed MLS listings as examples of how to compare properties
Mike Summey: Once he/she get a couple of properties and starts building a track record of payment with some owners financing, the banks will start to show more interest.
mn_newbie: however, whenever I do research, I can never find that level of detail. Is there a source of such detail available to someone like me?
Roger Dawson: Bear in mind that listing prices don’t tell you what the property is worth.
Mike Summey: I recommend having reserves equal to 3-6 months of expenses and keep building these reserves as your portflio grows.
Mike Summey: That may sound like a lot, but if you set aside a small amount regularly, you will get ther before you realize it.
Mike Summey: having reserves also helps build banking relations.
Roger Dawson: But a lot of people get started on a shoestring and pull themselves up by the boostraps.
Mike Summey: mn_newbie - I’d forget about the MLS listings.
Mike Summey: I never use them.
LJ: where would you recommend looking for 100% investment loans? Typically I can find 80%, sometimes 90% but I can’t seem to find 100%?
Roger Dawson: Nothing substitutes for getting out there and inspecting the properties.
Mike Summey: I look at properties and determine what they would be worth to me as investments and let that determine what I offer. I don’t care about what the asking price is.
LJ: I’m sure these answers are in the book but again, I’ve only just started it. Thanks
Mike Summey: Everything we’ve discussed up to this point is covered in the book, but I don’t mind discussing them.
mn_newbie: I bought the book but have not had time to read it quite yet.
Mike Summey: LJ you probably won’t find 100% loans. Typically the way you get 100% financing is with a combination of bank or third party financing and owner financing.
[Investment Chat]: MikeP has entered (11:23 am)
Mike Summey: Hi Mike
Mike Summey: Welcome to the chat.
Roger Dawson: Hi Mike P
MikeP: hello
Mike Summey: You’re late…we’ve been waiting for you.
[Investment Chat]: Dennis has entered (11:24 am)
MikeP: thanks, was busy w/ clients
Roger Dawson: Hi Dennis
Mike Summey: welcome back Dennis.
Dennis: thanks
Mike Summey: Back to the 100% financing…I’ve financed many deals with small 1st mortgages from a bank or third party coupled with a larger 2nd mortgage with the seller.
Mike Summey: I have even gotten several 0% loans from sellers under these circumstances.
Mike Summey: There’s a whole section in the book on how to do this.
Mike Summey: As well as a discussion about why giving 0% financing makes sense for some sellers.
Roger Dawson: Re the question about bad credit. If you’re only getting a 50% loan it doesn’t matter does it? then the seller can carry back the balance?
Mike Summey: Sometimes you only need to get 20-20% loans from the banks to get owner financing.
Ralph Roberts: That’s awesome!
Mike Summey: I once bought a house with a $15,000 bank loan and a $78,000 second mortgage from the seller.
Mike Summey: Once you get a property or two paid off, you can leverage them to get the cash you need to put up to get owner financing and you still have a -0- down purchase.
Roger Dawson: Sellers are more willing to carry back these days because they can’t get high rates of return anywhere else.
Mike Summey: The low interest rates and nervousness about the stock market probably makes this one of the best times in my lifetime to get owner financing at 0% or low interest rates.
Mike Summey: I have a question for everyone.
Roger Dawson: Plus sellers have equity built up because of prior inflation.
Mike Summey: How do you like the idea of having regular scheduled chats like this?
Dennis: Great
Ralph Roberts: Good idea!
LJ: after i read the book, this would be a great idea
mn_newbie: I like that idea a lot
Mike Summey: This is the first one we’ve scheduled, so we’re just starting to look for the best times and dates for future ones. Any suggestions?
LJ: thanks again and hope to talk to you again soon!
MikeP: i like 1pm… my mornings are generally busy being a mortgage broker w
Mike Summey: We had to schedule this one in the morning due to Roger’s schedule. Maybe the next one we can schedule in the evening.
Roger Dawson: In scheduled chats we could give you some feedback on the properties you’ve been inspecting.
Dennis: You would probably get a bigger turnout in the evening midweek sometime
Roger Dawson: We’d have to consider time zones. Noon on the West Coast is 3PM in the East.
Mike Summey: Roger is in California and I’m in North Carolina, so we have the time difference to consider.
[... chat continued on ...]
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