Chat transcript, 03-14-04
Posted on March 14, 2004
(our most extensive chat yet… complete transcript now here)
Welcome to the chat, Ralph Roberts!
[Investment Chat]: Ralph Roberts has entered (4:57 pm)
Cindy: Hi All… I’m an investor in Miami
Mike Summey: Hi everyone
Ralph Roberts: hi guys!
DavidO: Hi, Mike!
Al Lee: Howdy!
DavidO: Hi, Ralph!
DavidO: Hi, Cindy!
Mike Summey: Hi Al, glad you could join us.
roger dawson: I remember about 20 years ago, when Texas was going through one of its busts, you could buy 3 bedroom homes north of Houston airport for $30K. They must be worth ten times that now.
Al Lee: Very glad to be here.
DavidO: Hello, AI!
Al Lee: At least 10X
[Investment Chat]: Jonathan has entered (4:59 pm)
DavidO: $30k! for a 3 bedroom!! I live in CA, those figures are non-existent, lol
roger dawson: Who’s made an offer this week?
Mike Summey: Cindy, David, MJ…where are you guys from.
roger dawson: Hi Jonathon!
Jonathan: hey everyone
Mike Summey: Hi jonathon
DavidO: I haven’t, but I joined a mentoring program.
DavidO: My coach calls me first time tomorrow.
Cindy: Hi Mike… From Mia mi and I have made an offer but everybody seems to laugh at me even with your negotiating tactics
Jonathan: roger and mike…i actually emailed you guys a little while ago with some questions, and you both answered me back…so thanks for that
Cindy: Do you all have any tips for such a hot market like this one in Miami, FL
Mike Summey: Let ‘em laugh and a lot of them will, but when you have an offer accepted, it will make you money.
Mike Summey: Glad to help.
Al Lee: IF they like your first offer–it was too much!
Mike Summey: Good point Al.
DavidO: Hehe, good point.
roger dawson: Cindy, it’s a numbers game. Don’t take it as personal rejection. I’ll bet money on the person who made an offer and got turned down, over someone who didn’t make an offer!
roger dawson: David, which mentoring program did you join?
Mike Summey: Cindy, I went nearly a year and made over 40 offers without having one accepted, but then had 6 of the next 10 accepted.
Jonathan: mike, roger, and al… im curious as to how you bought all of your properties…mostly bank financing?…and if so, wont banks consider you a risk with so many properties under your belt already?
Al Lee: I’ve had many a Realtor tell me that I would make the seller angry with my offer and they would be embarrassed to present it. I remind them it is their job to present it and I am not trying to make friends.
Cindy: Roger I have your Power negotiation tapes which work hand in hand with the Weekend Millionaire … How many times do we have to use these tactics before we actually get good at them…
Mike Summey: You just have to be patient.
Al Lee: I use bank financing for most of mine. Once in a while owner financing.
Cindy: Yes.. I had to fight with a realtor this week to have my offer presented to the seller…
Al Lee: I use bank financing for most of mine. Once in a while owner financing.
Jonathan: cindy, im from miami as well
[Investment Chat]: TomH has entered (5:03 pm)
DavidO: Is there anyone from California here?
roger dawson: Cindy, practice the tactics on little things. For the next 60 days negotiate everything you do. Don’t wait until you’ll in a critical situation to practice them!
DavidO: The prices of real estate in CA is daunting!
Al Lee: The Realtor has no choice but to present it. It is not an option regardless how embarrassed they might be.
Jonathan: cindy, im from miami as well
[Investment Chat]: TomH has entered (5:03 pm)
DavidO: Is there anyone from California here?
roger dawson: Cindy, practice the tactics on little things. For the next 60 days negotiate everything you do. Don’t wait until you’ll in a critical situation to practice them!
DavidO: The prices of real estate in CA is daunting!
Al Lee: The Realtor has no choice but to present it. It is not an option regardless how embarrassed they might be.
[Investment Chat]: Summer NM has entered (5:04 pm)
Mike Summey: It helps a lot if you can meet with the sellers and find out if they are legitimate prospects for wholesale purchases. If so, what you learn can help you decide what type offer to make them.
Mike Summey: Hi Tom & Summer
Al Lee: You can always come back with a higher offer–almost never a lower offer.
Summer NM: Hi everyone.
Cindy: My husband and I have used the tactics on hotel rooms, retail stores, restaurant reservations.. but I still get nervous with the real estate offers
roger dawson: I like to challenge real estate agents. Let them present the offer but reserve the right to meet with the seller if they can’t get it accepted.
Jonathan: mike did you use bank financing for most of your properties?
roger dawson: I like to challenge real estate agents. Let them present the offer but reserve the right to meet with the seller if they can’t get it accepted.
Jonathan: mike did you use bank financing for most of your properties?
Mike Summey: I’ve use almost every kind of financing you can imagine.
Mike Summey: Banks, sellers, third party private, etc.
Jonathan: ok…and wont banks stop lending to you after so many properties…wont they consider you a huge risk
Jonathan: ok
Cindy: In terms of property management companies.. I found one in Miami that is licensed, insured, and charges $28 on a per unit basis to screen the applicants and accounting… It then charges to fix things such as plumbing, etc. Does this sound reasonable?
DavidO: Can someone answer Jonathan’s question please? Won’t banks stop lending to you after so many properties?
Mike Summey: As you improve your credit and cash flow, bank financing becomes easier, but I still look for outside financing whenever possible because it gives me a better negotiating position.
Al Lee: Fannie Mae and Freddie Mac have started imposing a limit of 10 proeprties, but you can get financing from “portfolio lenders” that is outside of the Fanne/Freddie world.
Jonathan: ok
Mike Summey: Cindy, that sounds reasonable except that the management company should be charging the $28.00 fee to the prospective tenants. That’s how we do it in NC.
Al Lee: Nonconforming money usually costs a slightly higher interest rate, but with rates a low as they are now it doesn;t make much difference
Cindy: The $28 fee for monthly property management is added on to the tenants’s rent then?
Jonathan: mike my family actually almost moved to ashville, nc like 9 or so years ago (just a sidenote)
Al Lee: David O - did you see my responses to the lending questions?
Mike Summey: Al, Fannie Mae and Freddie Mac just recently expanded the number of properties you can own from 5 to 10. this has to do with qualifying for their loans.
DavidO: Yes, I did, Al.
[Investment Chat]: Troy has entered (5:09 pm)
Mike Summey: Cindy, I thought yousaid they charged $28.00 to screen tenants.
Cindy: By “portofolio lenders” do you mean individuals that are willing to mortgage property ?
Mike Summey: Hi Troy
roger dawson: Have you all checked out the Housing and Urban Development website? They now list their HU
Mike Summey: Portfolio loans are ones the bank is going to keep in their portfolio, not sell to someone else.
Troy: Hi Mike. Loved your interview on channel 8 in dallas last week.
[Investment Chat]: loanman has entered (5:11 pm)
Cindy: NO… $28 per unit to screen tenants, pick up rent, ensure the property is in good working order…and the accounting for the month
Mike Summey: Hi loanman.
Al Lee: Portfolio Lenders are usually banks that are lending their own money, as copared to banks that lown you the money and them immediately sell the loan and charge a fee for processing it. That means they can do whatever they want with their own mo0ney–includign lend it to you for a property.
Mike Summey: Thanks Troy. It was fun.
roger dawson: HUD properties for sale are now listed at HUD.org. Be aware the HUD.com is an entreprenuer selling foreclosure lists.
Jonathan: ok
DavidO: I am just starting, and I don’t have much money. The books I read talk about single-family homes that cost $90K to $200K. Houses here in CA where I live cost $300K and up. I don’t know if I am at a disadvantage in the sense that any percentage we talk about comes up to a sizable amount of money.
Mike Summey: Troy, did you make it to the meeting at the Rennissiance?
Troy: Nope, bad timing. Wish I had though…
[Investment Chat]: Oz has entered (5:12 pm)
Cindy: Jonathan… have you had luck in the Miami market?
Al Lee: DavidO- I buy NEW houses in Fort Worth for $120k-$140k and lease them for 1% or better.
Ralph Roberts: welcome Oz
TomH: Roger, I went to the HUD website. I am going to drive by some homes later today to get familiar with the territory.
Mike Summey: David, study the principles in the book and apply them to the prices in your area. the principles work everywhere.
Mike Summey: Hi Oz
Jonathan: Al when did you start buying properties…Mike I think on the back cover of your book it says 34 and Roger you told me in your email to me that you started at 21, please correct me if Im wrong
Al Lee: I bought my first in 1974
Jonathan: and how long did it take for you to be “financially free”…meaning that you were making a nice cash flow every month and really didnt have to do anything else for income
Mike Summey: Oz, where are you from?
Al Lee: I was about 29 years old and working as a computer operator making about $600/month and had no savings at all
DavidO: Okay, I do have all intentions to do this. It’s just that books I read talk about $500 down, or $2000 down. Here in CA, the down payment requirements will more likely be $20000 and up, rarely below. And I guess I will have to work harder to get investors to share in that.
MJ: Al what builder do you buy from… are they discounted from retail?
[Investment Chat]: TT has entered (5:15 pm)
Mike Summey: Hi TT
TT: Hi
Troy: Hi Roger, I asked a question on your forum. Feel free to answer there if it would take too long here. I love all of your negotiation advice but wonder how you can use most of the techniques if there are realtors involved.
Mike Summey: Al has a club for investors called the Tortoise Club.
Al Lee: I can not answer that wquestion with specificity, but my net worth oassed $1M when I was 41 and at 54 I decided to retire and just live off the rental income. Live WELL, I might add.
DavidO: Al, where is your Tortoise Club located?
Jonathan: thanks
roger dawson: My first property was a 2 bedroom home in Napa, CA. Listed for $12,950, I offered $12,700 and they countered at $12,750. I walked away, but developed some common sense and gave in. It’s probably worth $350,000 today. My payments were $67 a month and I rented it for $120.
Summer NM: Can you tell us a little bit about the tortise club.
DavidO: $12950 in CA! Those were the good old days e
Al Lee: www.RentHouses.org - it is mainly an online club, though we have had one club meeting–in Las Vegas. The next will probably be in San Francisco.
Jonathan: and roger….do you hold properties basically forever like mike does?
roger dawson: To get started I suggested you make offers to for sale by owners, so you don’t have to futz with the real estate agents. You’ll learn a lot more about presenting offers doing it that way.
Mike Summey: Has anyone had an offer accepted in the past few weeks?
Al Lee: Summer NM–if you go to the website www.RentHouses.org after the chat you will probably find plenty of detail info.
Cindy: Nope!!
Jonathan: and the thing isnt to just let the equity build up forever…we should let it build up for a while and then borrow some of it to buy more properties correct?
DavidO: Yes, Al, thank you.
Summer NM: I just started a RE investors group here in Santa Fe.
MJ: Thanks Al. I’ll check out the site.
Al Lee: Mike’s philosophy if holding forever is nearly certain to make you rich. It is the closest thing to a sure bet that you can ever find.
Mike Summey: Jonathan, that’s the right idea. build up equity and then use it to buy more properties to build up more equity and just keep it going.
MJ: How does the equity line of credit come in? I have a lot of equity in my house but don’t want a home equity loan
Mike Summey: Make smart purchases and the let the passage of time make you rich.
Jonathan: and appreciation is almost a sure thing correct?
Jonathan: even if its just a little bit
Mike Summey: It has been for the past half century.
Jonathan: and that can be just ebcause of inflation and not even demand
Al Lee: If a property starts to become a problem, say the neighborhood goes down, I would sell it and reinvest the money in another property or a few others. I woeul probably use the Section 1031 exchange to avoid capital gains tax.
Jonathan: ok
Cindy: It doesn’t really matter where the financing is coming from either… The hardest part is finding the right combination of terms and price… Right now the market is so hot most individuals are only accepting asking price or higher
Summer NM: I am focusing on homes that already have a current good tenant in place.
[Investment Chat]: TomH has entered (5:22 pm)
roger dawson: Markets can overheat and make corrections. It’s getting a little crazy in California right now. But if you buy so that the properties carry themselves, we way we teach, it’s not going to affect you. Only the speculators get burned.
Mike Summey: MJ, I have a neighbor who invests and he uses hi home equity line of credit to provide down payment money and then after holding a property for a year or so he refinances and gets his equity line money back out to do another deal.
Jonathan: cindy where in miami are you looking>?
Summer NM: Is this a good way to be able to show the property already has income when applying for a mortgage.
Mike Summey: Hi Tom
Al Lee: I really like buying properties that are occupied by a tenant. I have bought a number of such from other investors who had to sell because of divorce, etc. — Instand revenue
Mike Summey: He has purchases 19 single family houses this way in the last 5 years.
MJ: Thanks Mike
Summer NM: That’s my though too.
Jonathan: geez
Cindy: I drive around looking for properties that are in bad shape in middle income neighborhoods. Do you recommend sending the owners letters or knocking on their door?
loanman: anyone know how to get around an irs lien? i cant buy because of it, and i cant get loans because of it. i can pay it off if i can make one or two profitable deals.
Summer NM: It helps to keep my DTI ratio looking good too.
Mike Summey: loanman, you probably need to talk with an attorney about that.
Jonathan: mike, roger, and al…do you continue to buy properties or just sit back and relax now living off your cash flow
DavidO: Aside from the authors, do any of the other people here already have an accountant and attorney?
Al Lee: I recommend that if you buy properties needing work structure the deal so that the work is rolled into the loan so you are not out of pocket too much cash. It improves yoru ROI a lot.
Mike Summey: I’m not sure if setting up an LLC or corporation will let you shield properties fro the IRS
TomH: Al, is there a specific way to find out about divorce properties?
Al Lee: In y book I say that if you are doing the right thing, good things will fall your way. I have had them come to me every time. Everyone knows that I buy houses and they think of me when they want to sell fast.
Mike Summey: I personally like to find properties that don’t need a lot of fix-up, but I have been known to buy two city blocks of run down properties and renovate them.
roger dawson: Some states you don’t need an attorney. In S. CA we use independent escrow companies. In N. CA they use title company escrow officers.
roger dawson: Not having to deal with an attorneys is a blessing.
Mike Summey: In NC we use attorneys.
DavidO: Independent escrow companies, that’s an idea!
Jonathan: mike how in the world did you buy 65 properties in a year?…thats more than 1 property a week
Al Lee: I am too lazy to mess with properties that need much work. I can make a great return with little effort on Class A proeprties–often new construction–so I don’t like fixer-uppers.
Mike Summey: I bought 43 of them in one transaction.
DavidO: Roger, you are right, some attorneys’ greed is just shocking. One wanted to charge me $410/hour, and wanted a $5000 retainer fee up front.
Jonathan: ahhh ok
TomH: The only thing that really scares me is vacancies after you buy the property. Any comments about getting renters?
DavidO: TomH, don’t you hire a property management company for that?
Summer NM: Must be the two city blocks..
Jonathan: anyhow, thats gotta be a record or something
MJ: What do you think of taking a property subject to the existing financing (everyone says the due on sale is never called)
roger dawson: Finding a good property manager is the key to everything. You’ll go crazy trying to handle all those tenants yourself.
TomH: I am an amateur currently. I did not know the property manager does this.
Mike Summey: When you only own one property and it goes vacant you are 100% vacant. After you get your second and one goe vacant you are only 50% vacant. It gets better the more you own.
Al Lee: The three most important attribuetes of a property are: Location, Location, and Location. In the right place, you won;t have much trouble keeping it rented.
Jonathan: yes what are your thoughts about using lease-options or buying subject-to
DavidO: To Mike, Roger, and Al, MJ’s question on the “due on sale”. How often is that enforced from your experiences/
Mike Summey: You definately don’t want to own properties in areas where you have to carry a gun to collect rent.
Mike Summey: I’ve not had any experience with it personally.
Al Lee: NEVER VIOLATE TH DUE ON SALE CLAUSE - the bank may not call the note immediately, but if you have a 6% note and prevailing rates are 12% (and they will be some day) they will have a handy reason to call your note.
Jonathan: true
Jonathan: when do you think the rates will rise by the way?
Al Lee: As soon as the employment figures get better, they will start back up.
TomH: I will carefully study before I do my first deal in Portland. I will listen to the CD’s backward and forwards and then study my territories to survey the right neighborhoods. Thanks!
DavidO: Wow, I envy your clout, Mike ww
Mike Summey: If I knew that I’d go into the fortune telling business.
Al Lee: As soon as the employment figures get better, they will start back up.
TomH: I will carefully study before I do my first deal in Portland. I will listen to the CD’s backward and forwards and then study my territories to survey the right neighborhoods. Thanks!
DavidO: Wow, I envy your clout, Mike ww
Mike Summey: If I knew that I’d go into the fortune telling business.
DavidO: lol
roger dawson: Rates went down last week, to almost historic lows. Unless inflation becomes a problem, I don’t see rates going up much.
Jonathan: ok
Mike Summey: VA & FHA loans are still assumable, but you need to qualify.
[Investment Chat]: coquient has entered (5:34 pm)
roger dawson: I had lunch with Alan Greenspan once because we were both speakers at the same convention. He didn’t know what rates were going to do either!
Mike Summey: Hi coquient
Al Lee: My philosophy is: borrow all you can today at these rates. WHEN, not if, they go up you will be laughing at the banks.
roger dawson: Hi Coquient!
MJ: Do you generally make offers on the spot or go crunch numbers and return with an offer
Jonathan: ok
DavidO: That was one of the thing that made me drool, the VA & FHA. Just wish there were more of those in CA. Very few houses qualify for a VA & FHA loan.
Mike Summey: Jonathan, my advice on how to deal with naysayers is to stay away from them.
Ralph Roberts: what did Greenspan eat, Roger?
Jonathan: and what if they’re your immediate family?
Al Lee: I have a very comprehensive spreadsheet that I use to “crunch numbers” and it tells me which property to buy and which to pass on–and how much to pay.
Jonathan: like parents (im 20)
oger dawson: Greenspan was eating crow, as I recall. He’d predicted inflation and it didn’t happen.
Ralph Roberts: hahaha..,.. good!
Troy: Al, any chance of getting that spreadsheet?
Troy: Or are there any programs out there to help crunch the numbers?
Cindy: Even my husband thought I was nuts when I offered 120K on a house listed for 240K… but that was how I had positive cash flow… The offere didn’t get accepted but the house has been on the market since November..
Mike Summey: I think we should all say thanks to Ralph for successfully getting the website moved to our new server which seems to be working great.
roger dawson: Yeh, Ralph!
Jonathan: good job ralph
DavidO: Troy, there are a few I’ve found. Go to google search and look for TValue
coquient: Hi I am moving to tampa and interested in income properties. I was thinking in living in a duplex or triplex and renting other apts out. Unfortunately most of these peoperties are in not so nice areas. Therefore, I was considering starting out with a single family home and then looking for these properties. What are your recs?
Al Lee: Reagarding naysayers. I can not even count how many friends I lost when I started soing this. They thought I was crazy at first, then they became envious and tried to undermine me. Once a neighbor called the building inspector to report me for a house I bought in our neighborhood. Don’t let the b……s wear you down.
DavidO: Troy, also try Easy Loan Calculator, it’s cheaper.
Ralph Roberts: thanks… it’s humming smooth
Mike Summey: that’s why we waited so long between chats because we wanted to avoid another crash like whe had on the last two.
Cindy: Thanks Ralph
Ralph Roberts: glad to do it, Cindy
Jonathan: why dont you guys start a coaching or mentoring program?
Mike Summey: there is a link our our site to Carlton Sheets “Tool Kit” It is a great tool and I use it regularly.
[Investment Chat]: patti has entered (5:39 pm)
Mike Summey: Hi patti
Al Lee: Mike: this chat room thing is fun and interesting. Why didn’t I think of it before you?
roger dawson: Coquient, I’d suggest starting with a modest little house in a good rental area. Then start farming the area for another one just like it.
Mike Summey: Because you were too busy doing computer stuff.
DavidO: Mike/Roger/Al, Jonathan had an interesting question. Why haven’t you started a mentoring program?
[Investment Chat]: Summer NM has entered (5:40 pm)
Al Lee: Actually, my club IS a mentoring program
patti: Hello Mike, I love your book. Have a few questions.
Jonathan: whats your club?
Mike Summey: Probably because we don’t have the time to do it and we don’t believe in selling people a mentoring program run by hired guns.
DavidO: Dang, Al! I am in your web site, and I didn’t see a clear indication that it was a mentoring program.
Al Lee: Jonathan, see earlier discussion. it is the Tortoise CLub, www.RentHouses.org
Jonathan: ok thanks
coquient: Thank you Roger.
Mike Summey: Go ahead with your questions Patti.
Al Lee: David, I don’t call it that, but it actually is.
Jonathan: well how bout a small program so only you teach
DavidO: Al, it sounds more like a place where real estate investors exchange tips, offer opportunities, but not really a formal form of mentoring.
DavidO: Okay, Al, i will look at it more closely.
Mike Summey: Where are you from Patti.
patti: Do you feel that someone just getting started should have a real estate agents license first, and is there an advantage to having one?
[Investment Chat]: Rick has entered (5:43 pm)
Al Lee: DavidO: actuallly we have a full supply chain of professionals who guide your through every step. Half our members have never even seen the properties they bought and never been to Texas (where the properties are), but are making money on them.
Mike Summey: Hi Rick
Rick: Hi from Kobe Japan
coquient: what are your thoughts on community living areas where many new houses are built and eventually sold. Is there any was to financially benefit from this type of arrangement?
Mike Summey: Absolute not! In my opinion, a real estate license is a detriment not a plus.
Mike Summey: KOBE JAPAN!!!
roger dawson: Patti, there are pros and cons to having a real estate license. Don’t let getting one stop you from getting started making offers.
Mike Summey: WOW!
Al Lee: I agree on the real estate license. It would increase your liability and add nothing.
DavidO: Wow! When I do NOI as Mike/Roger’s book teaches, wouldn’t owning property in Texas despite my being in CA make it less feasible? I mean, there has to be more expenses involved in maintaining property out-of-state?
Rick: Yes, I am from Canada, but do some investing in Japan-loved your book!!!
Mike Summey: If you are licensed, you are under much greater scrutiny than if you are not.
Mike Summey: Thanks!
Al Lee: DavidO, not so. Mike and I agree that all properties shoudl be professionally managed, so the cost is no differrent. Also, Texas has no state income tax.
patti: I am from Chicago, IL however relocated to Ann Arbor, MI about a year ago. I don’t know the Michigan market.
roger dawson: I think that having a license exposes you to a lot of good deals, but you have to let sellers know. You put in your offers: buyer is a licensed agent buying below market for sale at a profit.
DavidO: Al, and all you charge is the membership fee to have access to all this??
Mike Summey: Hey Al, you didn’t tell me that last week when I was there.
MJ: Patti… you can take realtor training classes but not get licensed. I took a class on contracts just for the knowledge
Al Lee: Mike, I have considered getting a license a half dozen times ofver the years and always came to the conclusion you stated.
[Investment Chat]: moneymaker has entered (5:46 pm)
Mike Summey: Hi moneymaker
moneymaker: Hi All
roger dawson: Hi moneymaker
Mike Summey: There’s nothing wrong with taking real estate classes for the educational value, but you certainly don’t need a license to get started investing.
TT: Mike, at this point in your investing, are you doing deals with less leverage than you did in the beginning? Or are you still focused on having none of your own money in a deal?
Al Lee: Mike, last week was about YOU, buddy. ou had much more interesting stuff going on. We will talk plenty about me–one of my favorite subjects. Ha!
Al Lee: DavidO: Yes
DavidO: Al, but doesn’t it make property inspection more difficult? Since I can’t do it, I’d have to hire another party to do so? Unless property management companies there do property inspections?
Ralph Roberts: Mike did a great real estate seminar here in Asheville yesterday!
Mike Summey: Some people think having a real estate license let’s you save money by getting part of the commission, but the liability that come with it just isn’t worth it.
roger dawson: Yea, Mike!
Cindy: Mike when r u coming to Miami????
Al Lee: DavodO: our people DO EVERYTHING! You just sign at closing and pay the down payment.
DavidO: Al, whoa!!!
DavidO: Al, you just placed the right bait
ike Summey: the Central Florida Real Estate Investor Club is talking with McGraw-Hill about getting me down to Florida.
patti: Have another question. How can I get more knowledge on negotiating real estate deals. Do you have any recommedations for courses or books with various scenarios? Do you have any such seminars coming up?
Cindy: Al so you’re saying that if i subscribe I will have a property with positive cash flow and little or no money down all the way from MIami, FL… Within a year?
roger dawson: Patti, we big fans of Carleton Sheets. Anything that he has put out is good stuff.
Al Lee: I learned the hard way what Mike put in his book about professional management. I now have a list of reliable, trustworthy pros who can do it all and I DO NOTHING! They are so much better at it than I ever was when I tried to “save money” doing it myself. Mike seemed to know this by instinct from the time he got hsi first property. I learned the hard way, believe me.
Mike Summey: Patti, Roger’s Secrets of Power Negotiating audio program is wonderful. I’ve used it to make millions. You can call the 800 number on our website and order it.
Cindy: Cool Mike.. Hope to meet you soon
DavidO: Roger, what do you think of Robert Allen compared to Carleton sheets?
moneymaker: Generally speaking how much times the rentroll is acceptable to pay for a multi family property. I know in the past when interest rates were high 4-6 was acceptable. but now in todays market it is hard to find numbers like that, I mean it seems good to find something around 9-10 times rent roll. what is anyeones views.
[Investment Chat]: howard has entered (5:52 pm)
Mike Summey: Hi Howard.
coquient: I haven’t received a reply regarding new houses in family communities in Tampa and if these are worth investing in?
Rick: Mike, do you ever go to Canada. I have sent your book to a couple of friends and there and everyone I know likes it as much as I do.
TT: Roger, what is your most popular/best negotiating book that you would recommend?
Ralph Roberts: welcome Howard
roger dawson: DavidO: Robert Allen is a good friend too. I’m just very strong about endorsing Carleton because he teaches real world stuff.
Al Lee: Cindy: I can not guarantee anything, but there are a number of testimonials on the website and they are all real people. ONly one or two live in Texas.
Mike Summey: moneymaker, use the NOI calculation to determine what you pay and forget about rent multipliers. There’s just too much they don;’t tell you.
DavidO: Roger: Real world stuff. You mean Robert Allen is more abstract?
Cindy: Sounds good AL
[Investment Chat]: Jamey has entered (5:53 pm)
Mike Summey: I could come to Canada if a group wanted me.
Mike Summey: Hi Jamey
moneymaker: that true, but you also need a quick way to know which propertys to further put energy into looking at
Ralph Roberts: welcome, Jamey
roger dawson: TT. I’m very proud of my book Secrets of Power Negotiating - 2nd edition. Published by Career Press it sells for $24.99 in hard cover. You’ll find it on Amazon.
[Investment Chat]: loanman has entered (5:54 pm)
Mike Summey: I fly my own airplane when I travel, so I can go just about anywhere.
Jonathan: thats kool
[Investment Chat]: loanman has entered (5:54 pm)
Investment Chat]: loanman has entered (5:54 pm)
TT: Thanks Roger I will order it.
Mike Summey: We’re starting to get a full house. That’s great.
Jonathan: does the chat end at 6?
roger dawson: Mike will be on a program with Donald Trump in NYC later this year.
Jonathan: eastern time^
coquient: any thoughts on my tampa questions?
Summer NM: I just ordered my copy from Borders. Everytime I go to buy a copy it’s sold out. Must be great!
Mike Summey: I’ll stay a little longer if everyone wants me to.
Ralph Roberts: we are making real progress… I have not seen Roger drop out once 
Al Lee: This is the first chat I have made it to, but I have not seen one glitch.
[Investment Chat]: Jason has entered (5:56 pm)
MJ: I’m dropping off but wanted to say Thanks! Love the book and think this chat is an awesome idea!
Mike Summey: coquient, I must have missed your question. Would you try it again?
Ralph Roberts: new server Al, it’s a honker
roger dawson: Ralph, that’s because Mike made me buy a new laptop just so I could do this.
Mike Summey: Hi Jason
roger dawson: Hi Jason!
Jason: Hey
Jason: Hey Roger
Mike Summey: I made Roger spend a little money to get a decent computer so he would quit bombing out.
coquient: Sure. Are new homes in family communities a worthwile investment?
[Investment Chat]: wayne has entered (5:57 pm)
Mike Summey: Hi wayne
Mike Summey: If you can buy them right, they are the BEST investments.
coquient: Why Mike?
roger dawson: Coquient, as we teach in the book, it doesn’t matter if it’s a new home or not. Just make the numbers work.
Al Lee: I like family communities and new is great, but I try to stay away from GATED communities because it presents problems to the managers having access for repairs and showings.
Mike Summey: Because if the numbers work, you have a property withits full life ahead of it.
patti: I’d like to know if you feel a 2-3 flat is a good property to start out with. With interest rates so low do you ever have the single family unit go unrented for too long?
Al Lee: Roger: Right! most of my homes were not new, but either can work well.
Rick: What kind of show will you be on with Donald Trump, Mike?
DavidO: Mike, those new-home communities I’ve been to, they always ask if you’re an investor, and if you are, they turn you away.
Ralph Roberts: Trump bettah hope Mike don’t fire HIM!
Mike Summey: I’ve been asked to speak at a real estate forum with Trump in New York this fall.
roger dawson: From hanging around Mike, I can tell you that one of the things that makes him so successful is that he doesn’t get emotionally involved with the properties. He runs the numbers. I think Mike could make a line of numbers stand up and play the 1812 overturn if he remembered to put batteries in his calculator!
Al Lee: DavidO– your property manager should establish a rapport with the HOA so that they know you will have well-maintained proeprties. Then they get much less skittish about investors.
coquient: Thanks all. Great Book and Great Chat
Mike Summey: DavidO, you don’t have to tell them what you plan to do with the properties. It’s not of their business.
Mike Summey: Thanks for being with us.
roger dawson: We’re skittish on any property that has a Home Owners Association looking after it. They can run the dues up on things that only benefit owner occupants.
DavidO: Mike, well, they ask you if you plan to live in them.
DavidO: I guess I can be ambiguous with my answer
Cindy: OK everybody… I’ve gotta go. THank you very much for your time and insight. I think this chat is a great idea. Thanks again everybody.
Mike Summey: Yeah, or just do as I would and tell them it’s non of their business.
DavidO: Cya, Cindy
Ralph Roberts: thanks, Cindy… see ya
DavidO: lol
roger dawson: In North Carolina they don’t care much for folks telling other folks what they can do with their properties.
Al Lee: HOA’s are a two-edged sword. They can be great for the value and rent generating ability of your property, but they can be nasty to deal with. We are very careful of WHICH areas we buy into because of that and our managers go to the meetings and kiss-up the boards of directors, etc.
Ralph Roberts: you got that right, Roger
Mike Summey: Does Sunday afternoons work for everyone for these chats?
DavidO: Yes, it works great with me! I love this1
Al Lee: this time on Sundays is great for me, for what that’s wroth.
DavidO: oh, one note though, this chat program is slowing down significantly!!
Summer NM: Gotta go here, too. Thanks, again, always great! Sundays are good.
Rick: Works for me-I’ll be at the next one for sure
DavidO: Maybe you should do this in IRC
[Investment Chat]: Randy has entered (6:05 pm)
Ralph Roberts: I’ve not noticed any slowdown?
Cindy: Sundays are great for me… Talk to ya soon… Bye bye..
roger dawson: Where’s IRC?!
DavidO: When I type, the letters appear so slow now.
Mike Summey: Now that we are on the new server, we want to start scheduling chat time to talk about specific topics. These would be open for our readers to talk with each other and Roger & I would join in when we could.
Mike Summey: Hi Randy
Jamey: This is the first time viewing the chat. Love it. Sundays are great. Thanks so much.
patti: Great time for me here in Michigan. Thanks for the opportunity. Still wondering about my question on whether single family units are difficult to rent with the interest rates being so low. If 2-3 flats are good investments?
Ralph Roberts: the load on the server has yet to get above 1.4%
DavidO: IRC is Internet Relay chat, it is easy to create a channel, then just tell people what channel it, and they can enter and start chatting.
Mike Summey: We’ll try to get a schedule posted within the next few days.
DavidO: I look forward to it, Mike.
Al Lee: patti: 3-bedroom, 2-bath, 2-car attached garage is my first preference for investment properties.
DavidO: Hopefully, i will have more to contribute once I’ve made several offers.
Ralph Roberts: IRC is super but a bit complicated for a lot of folks, I’m afraid.
roger dawson: Patti, I still favor single families. Vancancy rates are a little higher now because it’s easier for tenants to buy, but in the long run SFR always pay off.
[Investment Chat]: earl has entered (6:08 pm)
Ralph Roberts: hi Earl!
roger dawson: Hi earl
Al Lee: hi, Earl
Mike Summey: Patti, when you get into 2-3 flats and larger multi-family properties, you get into things that are different than with single family homes. Things like common area maintenance, utilities, etc.
Troy: Gotta go guys. See ya!
DavidO: Well, compared to this web-site chat, yes it has a few extra steps. But my chat client is degrading. What I type takes a long time now to appear on the chat screen.
Mike Summey: Hi earl
roger dawson: Gotta go folks! Great being with you!
Mike Summey: By Troy, thanks for joining us.
DavidO: lemme log out and come back in
Ralph Roberts: see you, Roger!
Al Lee: Bye Roger
DavidO: bye roger!
Mike Summey: By Roger…hit ‘em good.
Ralph Roberts: this chat transript is already about four times longer than any of the others we’ve done!
Mike Summey: He’s going to go play golf.
Mike Summey: I can’t understand why he would rather do that than talk with us.
patti: Thank you so much. Are any of you coming to Detroit, Chicago or near here for a seminar or anything?
Jamey: What are your feelings on building modular single-family, duplexes, etc.?
Randy: I was wondering if your books info would work in canada. I am thinking about starting to invest in rental property.
Mike Summey: I don’t have any plans presently to be in that area, but that could all change tomorrow.
[Investment Chat]: tc has entered (6:10 pm)
Mike Summey: Hi tc
[Investment Chat]: DavidO has entered (6:11 pm)
Ralph Roberts: welcome TC, rehi David
DavidO: ah, much better!
Al Lee: Welcome back, DavidO]
Rick: Randy-I have had and do have property in Ottawa and the surrounding area. It works
DavidO: Hi, Ralph and Al, hello again.
Mike Summey: the principles in the book can work almost anywhere where you can own private property.
Ralph Roberts: connections vary
DavidO: Mike, that second book, the one with the 8 audio tapes, is that a different book?
Mike Summey: Yes
Mike Summey: Are you currently in Japan, Rick?
Randy: Thank you. Your course on cassette looks interesting. Has it sold well in the usa.
Rick: Yes-I work at a university, but I have a few properties here
Mike Summey: I will be speaking at a Learning Annex event inNew Your on April 17.
Mike Summey: The audio program is selling superbly.
patti: Is the audio program the same material as the book or is it different?
Ralph Roberts: for those who may have missed part of this chat, a complete transcript will be posted almost immediately afterwards.
DavidO: Mike, that second book has a different title, but the highlights sound similar to the first book, that’s why I ask about the differences.
Mike Summey: The great thing about the audio progarm is that you can actually listen to what you are supposed to be doing while you are out riding around doing it.
DavidO: Is that the only difference? The addition of the audio tapes?
Mike Summey: DavidO…second book?
Randy: Is the cassette course a live taped seminar or you in the studio.
slightly different titles.
Mike Summey: Are you talking about the one we will be meeting with McGraw-Hill about next week?
DavidO: The one with the audio tapes describe it as a real estate investing program.
Jonathan: thats nmot a book
Jonathan: not*
Jonathan: just audio i beloieve, right?
Mike Summey: The second title is an 8 CD or cassette audio album.
DavidO: It had me fooled, the graphic was just like the original book.
patti: You have another book coming out? What is the name of it?
DavidO: i thought it was a new book that came with audio tapes, lol!
Mike Summey: Yeah, I guess it could get confusing.
Jonathan: writing another book mike?
Mike Summey: It does have a printed workbook with the CDs or audiocassettes.
Mike Summey: Al, give me a call after the chat ends.
patti: Can I buy the workbook without the tapes?
Mike Summey: I can stay for about another 15 minutes if anyone has more questions.
Al Lee: Mike: will do. This chat room is a TERRIFIC idea.
Mike Summey: Patti, No the workbook is part of the package.
questions in my mind for a while.
DavidO: Although of course, at this point, “experts” means everyone but me, I’m just starting.
Mike Summey: The best thing about having both the audio program and the book is that everyone learns faster and retains more when they can both listen and read about a topic than they can with either one alone.
Al Lee: I do a Learning Annex seminar on RE investing every month in San Francisco adn get asked about a licnes almost every time.
DavidO: Al, I need to network more with real estate people. I started this alone.
DavidO: That’s why I’m happy about this chat
Al Lee: David: looks like you came to the rightr place.
DavidO: I know I did w
DavidO: Al, I sent you email by the way.
DavidO: but just respond at your leisure w
Al Lee: David: I’ll check it as soon as I get done here.
DavidO: thanks.
DavidO: Is roger back?
DavidO: I was just asking him earlier what he thought of Robert Allen’s mentoring program.
patti: Had any experience with investment clubs utilizing your techniques? What is your opinion on these?
Mike Summey: DavidO, just get started. Someone gave me a business card at the seminar I did yesterday and on the back it read, “You don’t have to be great to start…you have to start to be great.”
Al Lee: Mike: Amen to that!
DavidO: Yes, I am getting started. I’m excited about this! I am psyching myself for tons of rejection already, but if I’m lucky, I may not get too many No’s before I get a Yes.
l Lee: If I had known how much I did not know wne I stared, I weoul probalby still be poor.
Mike Summey: David, think of it this way…each rejection is from someone who doesn’t wan’t you to make a mistake.
Al Lee: I need a new keyboard, this one can’t type.
DavidO: yes I agree!
DavidO: Oh, I am starting up a corporation for this, does anyoen have a suggestion where I can get an Articles of Incorporation suitable for real estate?
Mike Summey: David, where do you live?
DavidO: I live in Lakewood, CA
Al Lee: DavidO: I woeul like to offer you my thougts on a corporation before you make that move. Just my opinions, but it might affect your direction.
Mike Summey: You may want to look into creating an LLC (Limited Liability Company) rather than a corporation.
DavidO: okay, Al, I will listen.
DavidO: Mike, is that really better? I read from books that only a corporation can truly have the WHOLE gamut of tax deductions.
Al Lee: DavidO: we can discuss via email since it is a lengthy topic
DavidO: But I have heard a lot of people tell me LLC is the way to go.
DavidO: Al, okay, I’m all ears!!
Mike Summey: You can go to the Secretary of State website and get plenty of information including the documents you need to set it up.
DavidO: okay, Mike. and I have to try Roger’s suggestion, too, about the escrow companies in place of attornies. I learned some good stuff today!
DavidO: and most of all, I am talking to the real estate greats!
DavidO: It is my honor and elation w
Mike Summey: Thanks!
Al Lee: The only difference betseen you and us is that you haven’t started yet.
Al Lee: The only difference betseen you and us is that you haven’t started yet.
Al Lee: And you type better thatn I.
Mike Summey: My wife just cam in and told me if I didn’t get off the computer and come to dinner that she was going to throw mine out.
DavidO: I truly feel I am in this for the rest of my life. I’m not giving up on this. It makes so much sense. I can spend the whole year just searching searchign searchning, but all it takes is ONE property a year.
DavidO: hehe, my kid is yanking me away too, he wants to be fed. But I look forward to the next chat!
Mike Summey: I told her I would be through by 6.
DavidO: thank you so much to all of you!
DavidO: And Al, I look forward to hearing from you in email.
Rick: It has been very interesting. I am glad Mike and Al both stayed. Al-I’ll order your book in the next while. Thanks.
Mike Summey: I’m going to sign off, but the rest of you are welcome to stay on and talk as long as you want.
DavidO: Mike, please don’t inadvertently remove my name from the chat invitations w
Al Lee: I have enjoyed chatting with everyone. The questions were very good and the company was even better.
patti: Mike, and everyone. Thanks.
DavidO: okay, Mike, I’m logging off too
Ralph Roberts: see you, Mike
DavidO: Thanks to all, goodbye
Mike Summey: Bye
Al Lee: Bye!
Jamey: Thank you all so much for the education and motivation. I’ve really enjoyed it. And I’m looking forward to the next chat.
[Investment Chat]: Denis in MA has entered (6:30 pm)
patti: goodbye! and thanks
Ralph Roberts: welcome, Denis
Denis in MA: Hi all, I couldn’t make the chat earlier. But I figured I could log on and grab the transcript.
Ralph Roberts: we’re winding down here… been on since 5pm
Ralph Roberts: yep… transcript will be up in about five minutes or less
Ralph Roberts: I’m posting it now
Ralph Roberts: loooooong
Denis in MA: I know. I didn’t have much to contribute anyway. My own plans and experience have been kinda stagnant lately
Ralph Roberts: maybe some of the conversation tonight will spark things off again
Denis in MA: I hope so. Thanks, Roger
Ralph Roberts: well, gotta run folks… I’ll post the chat transcript now… see y’all!
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