Chat transcript, 02-15-04
Posted on February 15, 2004
[Investment Chat]: Ralph Roberts has entered (4:59 pm)
ATravelBug: I gotcha
Ralph Roberts: greetings to all
Mike Summey: Hi juny & Ralph
Barrett: hello
ATravelBug: greetings
Roger Dawson: Hi Ralph!
juny: hi
ATravelBug: so what’s the skinny on hard money lenders? … (continues)…
ATravelBug: how can the be of use?
Mike Summey: Ralph is our webmaster. He’s here to make sure we don’t break something.
Barrett: Would either of you recommend lending tree as a possible place to get a loan?
[Investment Chat]: Eddie has entered (5:00 pm)
Mike Summey: Hi eddie
ATravelBug: I went through them I wasn’t thrilled with thier service
Roger Dawson: What is Lending Tree?
Mike Summey: I would recommend any lender willing to make a loan at a rate you can live with.
[Investment Chat]: DavidLV has entered (5:01 pm)
Mike Summey: Hi davidv
Barrett: It’s a website where you post the terms you want and lenders contact you
ATravelBug: its a website that connects you with lenders
ATravelBug: but what they quote you on the site is not what you will get when you talk to the lenders who make an offer
Eddie: hey Mike, I had to figure this thing out
Mike Summey: Take your time…I had to also.
juny: Has anyone had luck with lending tree?
[Investment Chat]: DavidLV has entered (5:03 pm)
Mike Summey: Dale Earnhart Jr. just won the Daytona 500.
[Investment Chat]: dean has entered (5:03 pm)
Mike Summey: Hi Dean
[Investment Chat]: joy has entered (5:03 pm)
Eddie: Good race
dean: thanks, i’ll be lurking
Barrett: Are there any reference books you would recommend to read in addition to Weekend Millionaire? For someone brand new to REI?
Mike Summey: I’ve never tried Lending Tree, but I wouldn’t think they would be a very good source for investors.
Mike Summey: Hi joy
joy: I’m new to this chat and not sure what to expect…..
Roger Dawson: If you can get your hands on a copy, William Nickerson’s book “How I went from $1000 to $5 million” is still a great read. Very outdated now, but the priciples are sound.
Mike Summey: You can look on our website on the right side of the home page and you will see a link for other book & things. Click on the real estate link and it will take you to Amazon.com’s selection of real estate books.
[Investment Chat]: joy has entered (5:06 pm)
[Investment Chat]: Ralph has entered (5:08 pm)
[Investment Chat]: dean has entered (5:17 pm)
[Investment Chat]: Sean McLellan has entered (5:17 pm)
Sean McLellan: hello?
[Investment Chat]: Mike Summey has entered (5:18 pm)
[Investment Chat]: Denis_in_MA has entered (5:18 pm)
Mike Summey: I bragged too soon!
[Investment Chat]: LV has entered (5:18 pm)
Sean McLellan: anyone else having trouble with this chat? i’ve been trying to get it to work for about 20 minutes or so with no luck
Mike Summey: Sorry about that.
Denis_in_MA: Hi MIke, I ran into trouble getting here. I thought the site was down so I just sent you an email.
Mike Summey: It did go down for a few minutes.
Sean McLellan: ah, here we go. i can actually see the messages i’m typing now. earlier, i kept trying to send messages, and nothing ever showed up
Mike Summey: I guess Ralph found the problem.
Sean McLellan: excellent
Denis_in_MA: Way to go Ralph
[Investment Chat]: noye has entered (5:20 pm)
Mike Summey: Hi noye
Mike Summey: Hi LV
noye: noye
noye: hello
Mike Summey: Let’s get back to the discussions we were having before the problem.
[Investment Chat]: Roger Dawson has entered (5:20 pm)
Sean McLellan: hello Roger
Mike Summey: Ralph just called me. He said the server is acting up.
[Investment Chat]: open has entered (5:21 pm)
Denis_in_MA: what was the discussion about
Mike Summey: Let’s hope it holds up for today.
Mike Summey: Hi open
Roger Dawson: HUD now lists their foreclosed properties for sale at www.hud.gov. When we get through here you should check it out. Gives listings by zip code or city.
Mike Summey: We were talking about lending sources before the crash.
open: Hi I have never been in a chat room -interested in investing
Denis_in_MA: I just tried to buy a hud house in my area. It seems you have to bid on the hud site to get them.
Mike Summey: Open…just jump in whenever you like.
Ralph Roberts: I kicked the old server …. working now …sorry about that…. this is a temporary machine… we’ll have a much faster, new server up in about a week.
Sean McLellan: Before the server started acting up I saw someone was asking about financing saying they had perfect credit
Sean McLellan: What I am doing is going through a company in New York that is giving a 100% true no doc loan just based on my credit score
Mike Summey: I think we lost him in the crash.
Roger Dawson: Today’s LA times reported that the median price of a home in LA County is now $352,000 up a whopping 26.6% from a year ago.
Denis_in_MA: Mike, in case you didn’t read my email. I will put my message here. I am shopping in your backyard for houses. Do you have an advise or pointers. I have been doing a rather exhaustive search of Fayetteville. I have identified a property, a realtor, and some managers.
Sean McLellan: and they only require a 5% down payment. The way I am getting that money is by borrowing it at 0%… I am paying for all of our day-to-day expenses for a month on my credit card, and I am going to transfer that balance at the end of the month to a 0% interest card I just received… and then all of the money that i saved over the past 1-2 months by using the credit card instead, will be my down payment
open: What is the best source of low priced single family homes in buncombe county?
Mike Summey: I have found several private individuals with cash in CDs and have been successful in getting them to fund mortgages for me, especially during this time of very low interest.
Ralph Roberts: back up to 20 people on the site
Mike Summey: There are several neighborhoods of starter homes in Buncombe Co. — That’s Asheville, NC for those of you not familiar.
Roger Dawson: If you’re looking for private funding, ask your CPA. They know people with money who are looking for better interest rates than banks will give.
[Investment Chat]: juny has entered (5:27 pm)
Sean McLellan: ralph–if in the future you would like to set up a backup chat page in the event that these problems occur again, I have a dedicated server that I’d be happy to share use of with you. Currently it has been up and running without so much as a single restart for… almost 300 days straight now
Roger Dawson: Welcome back Juny
Mike Summey: Welcome back juny…sorry about the crash.
Ralph Roberts: thanks, Sean … I actually have several… should have thot of posting an alternate
Ralph Roberts: if we go off here, everyone is welcome to use abooks.com/chat
Denis_in_MA: MIke, is Fayetteville worth my troubles or should I focus my efforts in another region?
Mike Summey: We’ll get these problems solves as we go forward. Thanks everyone for putting up iwth the problems.
Ralph Roberts: if we go off here, everyone is welcome to use abooks.com/chat
Denis_in_MA: MIke, is Fayetteville worth my troubles or should I focus my efforts in another region?
Mike Summey: We’ll get these problems solves as we go forward. Thanks everyone for putting up iwth the problems.
Mike Summey: Fayetteville should be good.
Roger Dawson: Played golf yesterday with an investor who has just sold all his property convinced that the market in Southern California has peaked. Told him that if he invested the Weekend Millionaire way he wouldn’t have to guess what’s going to happen to values.
Ralph Roberts: if we go off here, everyone is welcome to use abooks.com/chat
Denis_in_MA: MIke, is Fayetteville worth my troubles or should I focus my efforts in another region?
Mike Summey: We’ll get these problems solves as we go forward. Thanks everyone for putting up iwth the problems.
Mike Summey: Fayetteville should be good.
Roger Dawson: Played golf yesterday with an investor who has just sold all his property convinced that the market in Southern California has peaked. Told him that if he invested the Weekend Millionaire way he wouldn’t have to guess what’s going to happen to values.
Denis_in_MA: MIke, is Fayetteville worth my troubles or should I focus my efforts in another region?
Mike Summey: We’ll get these problems solves as we go forward. Thanks everyone for putting up iwth the problems.
Mike Summey: Fayetteville should be good.
Roger Dawson: Played golf yesterday with an investor who has just sold all his property convinced that the market in Southern California has peaked. Told him that if he invested the Weekend Millionaire way he wouldn’t have to guess what’s going to happen to values.
[Investment Chat]: juny has entered (5:30 pm)
Mike Summey: Everyone needs to realize that there are deals in all markets. The prices may flucuate, but the deals are there.
open: Roger, can you give a few examples of what you mean by that?
Roger Dawson: Open, we teach in the book to buy right so that you don’t have to sell. Buying in the hope that prices will go up is speculating, not investing
Mike Summey: Some people buy with the idea of making a profit when they sell. The Weekend Millionaire method is to buy for the income stream.
Denis_in_MA: That’s true that there are deals, but what about a market that is unusually inflated. Even a deal may turn out to be a dog when the market returns to normal and the rents drop.
open: Roger, so you mean make your money going into the deal, right?
Denis_in_MA: No open, we mean make the money over the long run. It’s called cashflow.;
Roger Dawson: The value of property in a market like this is very closely tied to interest rates. Prices won’t stabalize until interest rates go up, something that stops a lot of first time buyers from investing.
[Investment Chat]: Eddie has entered (5:33 pm)
Mike Summey: I’ve seen sales prices go up and down, but usually rents either hold steady or creep up. does anyone know of markets where rents have fallen.
Mike Summey: Welcome back Eddie.
Eddie: Thanks, first time on and I get kicked off
Roger Dawson: I’ve only heard of rents going down when a major industry closes.
Mike Summey: The only time I’ve seen rent drop it has been due to overbuilding.
Mike Summey: We’ve lost thousands of industrial jobs in the Asheville area, but rents have not gond down.
Denis_in_MA: I’m very concerned about my area right now. I know the rule is to stay within 10 miles of home. But the house prices and the rents are through the roof. Rent for a 3 bed apartment are over $1000 and a house would rent for $1400 - 2000. This is expected to return to normal when the bubble bursts.
Mike Summey: They haven’t gone up as quickly as they once were, but they haven’t gone down.
Denis_in_MA: I’m very concerned about my area right now. I know the rule is to stay within 10 miles of home. But the house prices and the rents are through the roof. Rent for a 3 bed apartment are over $1000 and a house would rent for $1400 - 2000. This is expected to return to normal when the bubble bursts.
Mike Summey: They haven’t gone up as quickly as they once were, but they haven’t gone down.
open: How much cash flow to you usually look for per house?
Mike Summey: Denis, in major markets and very rural areas, you may have to look a little further out that the 10 mile radius we talk about in the book.
Roger Dawson: Do the NOI calculation the way that we showed you in the book and you’ll know how much cash flow you need.
Mike Summey: Personally, I’m happy with a deal that just breaks even on cashflow in the beginning.
Denis_in_MA: That’s why I decided to look in N.C., I have also heard that Missouri is pretty good.
Mike Summey: Of course that’s after doing an honest NOI calculation.
Eddie: Yea, I wass wondering about the 10 mile rule. I live in the country in the eastern NC area
Mike Summey: The reason we suggested the 10 mile radius in the book is because that will cover about 90+ percent of the people. Maybe we should have discussed major metropolitian areas and rural areas a bit more.
dean: Mike, I also live in Asheville and see so many rentals listed in the Iwanna. How hard is it to keep houses rented?
Mike Summey: Although I believe there are deals in these areas as well.
Roger Dawson: Be aware of state law when you look out of state. It may be very different than you think. A lot of California investors bought in Texas when our market overheated, not realizing that in Texas you are personally liable for real estate loans.
Denis_in_MA: Thanks Roger, that’s the kind of advice I can use.
Mike Summey: Dean, the vacancy factor you use when computing NOI should take into consideration the economic times and the vacancy rate in your market at the time.
Mike Summey: Vacancy rates in Asheville have been higher over the past year than anytime over the past 20 years. This is in part a reflection of the low interest rates that have enabled many habitual renters to be able to buy.
Roger Dawson: Prices are forced up in areas where the territory restricts outlying growth, such as San Fran, LA and Boston. Prices are held down in towns like Palm Springs, Dallas and Houston, where there is unlimited land available for expansion.
Sean McLellan: what are typical asheville vacancy rates right now?
Mike Summey: Market conditions are constantly changing. Does anyone remember back in the late 70s & early 80s when interest rates topped 20%? I found deals then also.
Denis_in_MA: I consult for an investment company and a researcher there looked up Fayetteville for me and found a vacancy rate of 11%.
Sean McLellan: That’s one thing I’m having trouble with around here–I haven’t been able to find a property manager yet who can actually do for me the things that the book says they should be able to do
Ralph Roberts: Fayetteville has a good rate of turnover because of all the military families.
Mike Summey: That sounds about right. It’s probably about that in Asheville now. Historically Asheville has been under 5%.
Roger Dawson: When vacancy rates are high you’re tempted to lower your stndards on tenants. Don’t do it! It’s far better to have a property vacant than take a chance on a shaky tenant.
Mike Summey: Where are you Sean?
Sean McLellan: I’m in Jefferson City, TN. right outside of knoxville TN
Roger Dawson: Is anyone in an area where forclosures are rising?
Mike Summey: You should be able to find a manager in that area. How much looking have you done?
[Investment Chat]: mlvikes14 has entered (5:46 pm)
Mike Summey: Hi mlvikes14
Roger Dawson: Hi mlvikes14
Eddie: Quite a few foreclosures in eastern nc here lately
mlvikes14: hello
Denis_in_MA: I found the best way to find managers is to ask realtors. I have also found realtors that have management companies in their office, but as the book says I stay away from them.
Sean McLellan: The company we rent from right now, Hayes & Associates says that they do it… I’ve dropped off a two page list of questions with them twice now. The first time, they lost it. I haven’t got a call back about the second time. I’ve talked to them on the phone a few times, and they just say they’ll have to get back to me to get answers.
Sean McLellan: I’ve talked to a company in Knoxville called… Morris Property management. I’ve got in touch with three different people, and none of them have got back with me
Mike Summey: Check out some others.
[Investment Chat]: mmcintee has entered (5:47 pm)
Mike Summey: I’ve just replaced one of my management companies.
juny: Foreclosures are growing in San Diego. Where I live.
Mike Summey: Hi mmcintee
Sean McLellan: I’ve also asked an Agent I’ve been working with to Buy properties, and asked for a list of property managers in the area, and she hasn’t come up with anything. Mostly it’s just difficult to find people who even provide the service, and so far they either just have vague answers such as ‘well, i guess you could work with an agent who would probably know rental rates’ or they just don’t ever answer at all
Sean McLellan: I
Denis_in_MA: I recently found a very good property manager in the Masschusetts/Rhode Island area by going through the yellow pages, like the book says. Everyone I called kept telling me to call him.
open: Mike :How much do you typically raise rents each year? Is there ever a time when you should not raise rents?
Sean McLellan: am definitely going to keep at it, just thus far i haven’t had luck yet
juny: I?m in my second week after finishing the book and I?m interested in seeing a few examples of a Letter of intent. Is there a website that might have some examples or Mike could you post a few examples or us?
Denis_in_MA: Sean, you might even call the management company of a big complex. Even though they won’t service small rentals, they usually know who does.
Mike Summey: I try to raise rents 2-5% annually. Occasionally, due to soft market conditions I may delay an incerese for afew months.
Eddie: In Greenville we have looked at properties that have been managed by property management and they have not been well kept
Sean McLellan: yes, I’m quite interested in the letter of intent as well. I liked that idea and I hadn’t heard of it before reading WM
Roger Dawson: I think you should raise rents just a little each year, even if it’s only 5%. Get your tenants used to the concept. Back it up with clips from the paper about how insurance and utilitty rates are rising.
dean: I haven’t read your book yet. Do you manage any of your rentals?
Mike Summey: Everyone! You need to understand that you need to manage your managers. In other words, you need to make sure they are doing what you expect them to do. That’s why I just replaced one of my management firms.
Mike Summey: I’ve never managed my properties.
Mike Summey: I manage the managers.
Mike Summey: I’ve found that management companies do what you “inspect,” not what you “expect.”
Roger Dawson: Dean, in the book we recommend using professional managers. Number one reason investors get discouraged: they bog down in the work involved managing properties and tenants.
open: How often do you inspect your properties?
Denis_in_MA: I just called a realtor in Fayetteville and asked him for a referal to a manager. He gave the the name and number of a guy who wasn’t even on my list. He told me he was retired Air Force and “takes care of his stuff”. I thought that would work out pretty well given that Fayetteville is a military town.
Mike Summey: Juny, we’ll try to post a few sample Letters of Intent in the next few days.
Sean McLellan: Mike–I think I read that you draw a 6 figure monthly income from your properties. How many do you own that have allowed you to obtain that?
Mike Summey: open, I ride by an do a street inspection frequently…at least every couple of months. If I see anything that doesn’t look like it should I will make a more detailed inspection.
Mike Summey: Sean, I have several hundred.
Mike Summey: I’ve been buying investment properties for over 25 years and have never sold one.
Sean McLellan: incredible. I hope one day to be 1/10th as successful.
dean: How many sfh in the Asheville area?
Sean McLellan: my father owned 83 units in denver, colorado. it’s too bad that he didn’t hold on to them.
mlvikes14: do you ever include a “subject to finding a renter” clause in a potential purchase contract?
Mike Summey: Going back to the inspection question, I ask my management companies to do a thorough inspection with the tenants before they move in, they do a reinspection after 60 - 90 days.
Mike Summey: No. I do not put this in an offer.
[Investment Chat]: mmcintee has entered (5:58 pm)
Mike Summey: It’s not a bad idea to put “Closing to be delayed until a tenant is secured.” if you can get away with it.
mmcintee: Vacancy rates in my area have been rising to 10 year highs. Should this deter me from getting into the rental market?
Mike Summey: Has anyone gotten our new audio progarm?
Roger Dawson: Thank you, everyone, for recommending our book. The “Weekend Millionaire” is still the best selling real estate book in America.
Mike Summey: It has just been released by Nightingale-Conant.
Sean McLellan: I want to, but I am currently putting all of our funds into buying our first property
Sean McLellan: But in a month or two, I think that I will
open: what is the biggest liability concern with single family home investing?
Mike Summey: It has just been released by Nightingale-Conant.
Sean McLellan: I want to, but I am currently putting all of our funds into buying our first property
Sean McLellan: But in a month or two, I think that I will
open: what is the biggest liability concern with single family home investing?
juny: Is the audio program any different from your book?
Sean McLellan: Does the audio program have a lot more than the book? I haven’t read a lot about it yet
Roger Dawson: Open, what do you mean by liability?
Mike Summey: I don’t know if you would consider this a liability, but I find the biggest mistake new investors make is Being Impatient.
open: Liability like doing something wrong & getting sued or mold or evictions?
Mike Summey: They look at a few propeties, make a few offers that are rejected, then out of impatience they pay too much for a property just so they can say they have made a deal.
Roger Dawson: Sean, the biggest advantage of the audio tapes is that you’ll listen to it again and again and it sinks into your subconscious.
Sean McLellan: I can see how it would be easy to fall into that trap
Denis_in_MA: I feel that by following the NOI, I can’t even consider a property till it works.
Roger Dawson: Re liability: I’ve never been sued by a tenant, or anyone else for that matter. I have had to sue a few tenants who didn’t pay their rent.
Denis_in_MA: For that reason I am still looking…
Mike Summey: Liability is the biggest reaso I use professional management to handle my properties. It puts a licensed firm between me and the tenants and the management firms carry liability insurance.
Sean McLellan: what exactly does the liability insurance cover? If tenants don’t pay rent, and it takes months to get them out, are you covered? Or do you just lose there?
mmcintee: Besides rising vacancy rates, I’m also concerned that rents have stayed flat for the past year. Again, is this a reason to wait on getting into the rental market?
mmcintee: Besides rising vacancy rates, I’m also concerned that rents have stayed flat for the past year. Again, is this a reason to wait on getting into the rental market?
[Investment Chat]: CANADA-Pete has entered (6:04 pm)
Ralph Roberts: Welcome, Pete!
Mike Summey: The past year has been unusual. It is the first year in 25 years that I did not buy a new property. It seems as if things are changing now.
CANADA-Pete: Thanks
Mike Summey: Hi Pete.
Mike Summey: We’ve been waiting on you.
CANADA-Pete: Hello Mike
Roger Dawson: Don’t let waiting for the right property stop you from making offers. Make offers that you know won’t get accepted. Just make them at price and terms that makes sense for you. Sometimes sellers will surprise you and take an offer you never dreamed they would.
mlvikes14: there was a question raised in the forums about LLCs. Is it a good idea to incorporate individual properties?
Denis_in_MA: That’s a good question. I have a friend who puts all of his properties in Land Trusts that are held in an LLC.
Roger Dawson: I’ve never owned properties in an LLC, but this is very much different for different individuals. Get some expert advice from your CPA and attorney on that one.
Mike Summey: Holding your properties in an LLC provides some liability protection, it is a good estate planning tool and it allows the properties to avoid probate when you die. The properties are treated almost exactly the same for tax purposes as if you owned them in you name individually.
mmcintee: Has the sfh rental market been as soft as the apartment rental market? The local information I find only talks about vacancy and rental rates for apartments.
juny: I there any weekend millionaire?s out there that live in San Diego or Southern California? It would be nice to work with someone as I practice my skills. Send a private chat.
Mike Summey: Real estate is like every other aspect of the economy. It has its ups and downs, but its downs don’t tend to be as low as other investments.
Roger Dawson: Vacancy rates vary enormously by market. In Southern California where I live there are very few residential vacancies, but office vacancy rate has been high, although it’s improving now.
Mike Summey: Speaking of private chats. How many of you would like for us to schedule chat times for specific subjects and let you and other investors talk amoung yourselves?
CANADA-Pete: Mike, you said that you did not buy a new property this past year and that it seems things are changing. In what way?
Mike Summey: Roger & I could join in when we could, but with regularly scheduled times to discuss certain topics you may be able to exchange ideas yourselves.
Sean McLellan: sounds good
noye: Please schedule the times for specific topics!
LV: I’m for private chats
CANADA-Pete: I like that idea.
noye: That would begreat
[Investment Chat]: Roger Dawson has entered (6:13 pm)
Ralph Roberts: works for me
Mike Summey: I feel that times are changing because many people have purchased homes with the low interest rates that won’t be able to meet their obligations.
LV: Open chat room allows for flex times and topics
CANADA-Pete: So that when interest rates climb back up it will be a buyer’s market?
Mike Summey: I’ll discuss the chat time with Ralph and Roger and we’ll try to post some trial times on the events calander.
Ralph Roberts: and, of course, the chat room is always available any time there are two or more folks want to use it
open: Mike do you mean the folks who bought when interests rates were low will go into foreclosure or just sell first?
Roger Dawson: People with variable interest rate loans are the more vulnerable.
LV: A few lending banks have mentioned the deals a few ago with no doc and low qualifing standards will cause some excessive foreclosures in the mariket, What are your comments
Roger Dawson: I don’t see that as a big problem because there is now enough equity in those properties to bail the owners out.
Mike Summey: I mean that many people who do not typically handle their affairs properly have been able to buy due to the low rates and loose underwriting. The same thing happened years ago when builders build hundreds of tract homes and sold them with VA & FHA loans.
Mike Summey: I bought many of these homes when the original buyers got in financial trouble. It could have been due to loss of a job, divorce, transfer or dozens of other reasons.
Mike Summey: I predict that the coming 3-5 years are going to be very good for investors.
Mike Summey: I think you will also see a growing number of properties that can be bought with 0% financing as the baby boom generation starts to retire and wants to convert real estate equity into an income stream for retirement.
Roger Dawson: Remember that foreclosures wipe out subordinate loans. People who get into financial trouble will have taken out second and third loans. Unless those lenders foreclose, you only have to worry about dealing with the holder of the first mortgage.
Mike Summey: Where’d everyone go?
Denis_in_MA: We’ve been listening attentively.
Ralph Roberts: we still heah
LV: Still here
Sean McLellan: yes, just watching
Mike Summey: Just wondering!
Roger Dawson: Your childrena and your grandchildren will thank you for getting into real estate investing this year!
open: still here
juny: yep
Mike Summey: The best thing about real estate investing is that the income stream you create will remain for your family after you are gone. Retirement plans and Social Security stop when you do.
Roger Dawson: Apart from Mike, who has made an offer to buy this week? Can’t buy property unless you make offers!
LV: We are seen investors camping out in Las Vegas on new home purchases. I have been in line in a few cases
open: I never heard of being compensated for lost rents due to bad tenants.
LV: New Homes have been appricating 6K per phase and 6 homes per phase
Roger Dawson: You’re only protected by errors and ommissions insurance - that’s when the property manager made an error or didn’t do something they should have.
Sean McLellan: i see
Mike Summey: Sean, my policy with my management companies is this…IF the rent is not received by the 10th of the month they are to file eviction papers. If the tenant wants to stay they have to pay the back rent plus the cost of filing the eviction. If the property managemnet firms choose not to do this, then I hold them liable for anything over a month’s rent that I lose.
Sean McLellan: that makes sense. that was one of my concerns… how exactly that would work
Sean McLellan: what type of fees are associated with filing an eviction?
Mike Summey: That may sound a bit harsh, but this is a business. If a tenant doesn’t have the rent by the 10th, what makes you think they are going to have it plus another months rent within 20 more days.
Denis_in_MA: Ah, another pearl of wisdom. Mike, maybe you should write a book about how to manage a manager. We could all use it.
Mike Summey: In North Carolina it cost $60.
Sean McLellan: And how long does that process usually take?
LV: When did you start using a management company to manage. From the 1st home or the 10th home?
open: If you buy a foreclosure & the people are still in the house, how do you get them out?
open: If you buy a foreclosure & the people are still in the house, how do you get them out?
Mike Summey: Here you can file after 10 days. If the tenant does not file and answer you can get a judgement against them and then file a writ of posession. This is served by the Sheriff who will physically remove the tenant and their property.
mmcintee: I’m still assessing the risk on all of this. What is a good source of information about vacancy rates on single family home rentals? All of the information I find lumps all rentals into one statistic.
Roger Dawson: Open,factor in the cost of bribing them to get out. It’s cheaper to pay their first month’s rent in a new place, than to pay legal fees to get them out.
Ralph Roberts: THE WEEKEND MILLIONAIRE’S GUIDE TO MANAGING MANAGERS
Denis_in_MA: open, I have a friend who offers people a month’s rent to be out by the end of the week and it usually works.
LV: I have use the $ 100 to get them out or rent the truck to help them move. They usually take the cash
open: How do you figure a months rent? based on what rent?
Denis_in_MA: based on their current rent.
Mike Summey: I find that by filing eviction papers on the 10th of the month, you establish the fact that if the tenant wants to ride one of their creditors, it’s not going to be their landlord. I really don’t have much of a problem with it.
Sean McLellan: So, in North Carolina anyway… Rent not paid by 10th, file for $60, and after 10 days they are physically removed by an officer and it’s done?
Roger Dawson: Re Sheriffs writs: once it gets that far the tenant knows they’ve lost and will get out. But some tenants know all the angles and courts tend to sympathise with them. Screening potential clients very carefully is the answer.
Mike Summey: The key is toi screen the tenants properly in the beginning.
Roger Dawson: I have to leave you now. Good luck everyone!
Mike Summey: I have very few evictions and the ones I do have I consider as a part of the cost of doing business.
noye: Are the guidelines for screening tenants in your book? If not then where other than common sense?
LV: Run renters credit check to establish a Unlawful Detainer track record.
open: Has anyone ever bought a foreclosure without seeing the inside of the house?
Ralph Roberts: good night, Roger
CANADA-Pete: Thanks, Roger!
Sean McLellan: goodbye, roger
Mike Summey: That’s what you pay professional management to do. My managers run credit and criminal checks before renting the properties. They charge the tenant an application fee to cover the cost of doing this.
LV: Thanks Roger
noye: Thanks mike
Denis_in_MA: Thanks everyone, talk to you soon.
Sean McLellan: That’s another question I had about management companies… Let’s say rent is 1000… they charge 10%, or 100 dollars a month… do you pay them during months they have the property rented? or when it is vacant as well?
Mike Summey: A tenant who doesn’t plan to pay timely usually won’t pay the application fee because they know the property manager is going to find this out.
juny: Thx Mike.
noye: Thanks for your time. Well appreciated
Mike Summey: My wife has 5 women visiting and she wants me to go to dinner with them…probably to pay the bill! Ha.
Sean McLellan: Thanks Mike–talk to you later.
open: Thank you
Sean McLellan: bye everyone
CANADA-Pete: Thanks for your insights, Mike!
Mike Summey: You can all stay and talk with each other as long as you want.
Ralph Roberts: good night, all
Mike Summey: We’ll schedule another chat soon.
Mike Summey: Bye
Sean McLellan: great, i’ll talk to you all then if possible.
LV: Have a good evening
noye: Will look forward to the next time
LV: any body out there live in a hot market
[Investment Chat]: mmcintee has entered (6:40 pm)
noye: I hear summers in Phoenix are hot……. [chat continued]
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