Chat 2-14-05, Happy Valentine’s Day!
Posted on February 14, 2005
02/14/05 19:58:16 Ralph_Roberts: hiya!
02/14/05 19:58:36 Mike_Summey: What’s up?
02/14/05 19:58:47 Ralph_Roberts: no much… been raining here all day
02/14/05 19:59:25 Ralph_Roberts: enjoying the classes?
02/14/05 19:59:27 Mike_Summey: I’m logged on with a wireless connection, so I hope it works for the whole chat instead of doing like it did to Roger last week.
02/14/05 19:59:38 Ralph_Roberts: so far, so good
02/14/05 19:59:51 Ralph_Roberts: Hi Roger Dawson!
02/14/05 19:59:59 Mike_Summey: I’ve had a grueling day.
02/14/05 20:00:00 Roger_Dawson: Hi Guys
02/14/05 20:00:05 Mike_Summey: Hey Rog
02/14/05 20:00:15 Ralph_Roberts: they fed you oatmeal, Mike?
02/14/05 20:00:29 Mike_Summey: We may have a lite turnout tonight since it’s Valentine’s Day [editor's note: actually, the turn out was great!]
02/14/05 20:00:32 Roger_Dawson: He just came from Hooters, Ralph
02/14/05 20:00:56 Ralph_Roberts: hey! I’ve actually been to Hooter’s in Orlando, so I know for a fact they have one.
02/14/05 20:01:08 Mike_Summey: I went across the street and picked up some wings. I haven’t had dinner yet.
02/14/05 20:01:38 Roger_Dawson: That’s not the kind of takeout I like to do at Hooters!
02/14/05 20:01:44 Mike_Summey: I went across the street and picked up some wings to go. I haven’t eaten yet.
02/14/05 20:02:03 Mike_Summey: Hello
02/14/05 20:02:13 Ralph_Roberts: try not to get grease on the chat area… thank you
02/14/05 20:02:34 Ralph_Roberts: hi Rick!
02/14/05 20:02:35 Roger_Dawson: Hi Rick!
02/14/05 20:02:48 RickCanuck: Greetings All!!
02/14/05 20:03:16 Ralph_Roberts: now we can start :p
02/14/05 20:03:53 Mike_Summey: My connection is very slow.
02/14/05 20:03:55 Roger_Dawson: I gave a talk to a convention of mortgage brokers in Del Rey Beach Florida on Saturday. Business is booming in the state because of the hurricane damage last year.
02/14/05 20:04:46 RickCanuck: I’m looking at 4 properties this weekend…any advice?This could lead to my first investment purchase.
02/14/05 20:05:06 RickCanuck: asside from my own home.
02/14/05 20:05:55 Mike_Summey: Rick, calculate the NOI each one could produce and then make offers that will let you buy with the noi. If they are all rejected, you won’t lose anything but a little time. If one get accepted, it will make you money.
02/14/05 20:06:13 Mike_Summey: Hi Jerry
02/14/05 20:06:30 RickCanuck: sounds good.ty
02/14/05 20:06:38 Roger_Dawson: Run the numbers the way we show you in the book. Take gross rental income and deduct vacancies, maintenance, insurance, taxes, utilities and management. That’s give you your NOI which is what you can afford to make mortgage payments with.
02/14/05 20:06:50 Mike_Summey: Hi Mark
02/14/05 20:07:00 mark: Hello
02/14/05 20:07:07 Roger_Dawson: Hi Mark!
02/14/05 20:07:13 mark: i
02/14/05 20:07:35 Mike_Summey: Rick, what area are you in?
02/14/05 20:08:05 RickCanuck: 3 hours NW of Toronto Canada
02/14/05 20:08:17 Mike_Summey: That’s cold!
02/14/05 20:08:22 RickCanuck: Near Owen Sound Ontario
02/14/05 20:08:30 Roger_Dawson: Note that when we calculate NOI we don’t include mortgage payments. Most beginning investors do it backwards. They deduct mortgage payments from the rent and then see if they have money left over for expenses.
02/14/05 20:08:53 RickCanuck: Its Raining here… much better than snow!!!!
02/14/05 20:08:57 MarkinNC: Hi Mike, Roger, everybody
02/14/05 20:08:58 mark: am going to a foreclousure this weekend for the first time , any tips?
02/14/05 20:09:01 Roger_Dawson: Mortgage payments are the most flexible part of the puzzle.
02/14/05 20:09:19 Roger_Dawson: On the courthouse steps, Mark?
02/14/05 20:09:31 mark: o on the property
02/14/05 20:09:48 JackB: hello
02/14/05 20:09:52 Mike_Summey: Hi Jack
02/14/05 20:10:09 Roger_Dawson: Is it just in foreclosure and listed then? Or is the court doing the selling?
02/14/05 20:10:34 JackB: I close on my first house this friday
02/14/05 20:10:46 Mike_Summey: Great Jack. Tell us about it.
02/14/05 20:10:47 Roger_Dawson: Congratulations Jack!
02/14/05 20:11:01 mark: The court is selling
02/14/05 20:11:09 JackB: 3 bedroom, 1 bath slab home for 44,000
02/14/05 20:11:22 Mike_Summey: Hi shane
02/14/05 20:11:37 Shane: Hi Mike
02/14/05 20:11:39 Mike_Summey: Shane, are you in Stuart, Fla.?
02/14/05 20:11:41 JackB: it needs about 8,000 of work, it should appraise for about 74,000
02/14/05 20:11:59 Kim-OH: Greetings all
02/14/05 20:12:02 JackB: I hope to have it rented by april
02/14/05 20:12:09 mark: Jack , how are the taxes
02/14/05 20:12:12 Mike_Summey: Hi Kim
02/14/05 20:12:18 Shane: Good oL KY
02/14/05 20:12:34 Kim-OH: Hi Mike
02/14/05 20:12:39 JackB: 740.00 a year, insurance is about 350.00 a year
02/14/05 20:12:40 Kim-OH: Shane where in KY?
02/14/05 20:12:45 Mike_Summey: Sorry shane, I thought you were someone else
02/14/05 20:12:53 Roger_Dawson: Mark, so don’t expect a big crowd of investors waiving bids in the air. The first note holder will be there to bid the amount they’re owed. The second note holder might be there to protect his position (he gets wiped out unless he buys). Few people will want to bid much more than what’s owed. Needs to be cash, of course.
02/14/05 20:13:23 Kim-OH: HI Ralph the chat is looking goodddddddddd
02/14/05 20:13:28 Shane: Thats ok, Eastern Ky
02/14/05 20:13:35 Ralph_Roberts: thanks, Kim
02/14/05 20:13:42 JackB: payment with insurance and taxes should be about 550.00. this is a 15 year loan. rents in the area go for about 650.00 to 700
02/14/05 20:14:22 Roger_Dawson: Jack, that sounds like it will work.
02/14/05 20:14:25 Mike_Summey: I’m typing between bites. I was starved. I’m trying to eat and chat at the same time.
02/14/05 20:14:29 JackB: it should
02/14/05 20:14:32 Mike_Summey: Hi sermiex
02/14/05 20:14:37 mark: ea Im not expecting too much , just a little experience
02/14/05 20:14:44 Roger_Dawson: He’s eating Hooters breasts.
02/14/05 20:14:56 Kim-OH: Ralph you are welcome but it’s all your doing lol
02/14/05 20:15:08 Roger_Dawson: Hi Tom
02/14/05 20:15:13 JackB: does anyone know about an interest only loan?
02/14/05 20:15:16 TomB: Hi all
02/14/05 20:15:23 Kim-OH: Hi Tom
02/14/05 20:15:26 aL_lEE: howdy.
02/14/05 20:15:35 Ralph_Roberts: not entirely, Kim … but I’ll gladly take credit 
02/14/05 20:15:44 sermiex: HiAll!
02/14/05 20:15:51 aL_lEE: I’ll go log back in to fix my name
02/14/05 20:15:55 Mike_Summey: Hi Tom, Al & Steve
02/14/05 20:15:58 Kim-OH: Ralph I’ll gladly give you all the credit lol
02/14/05 20:16:08 Roger_Dawson: Jack,do interest only as a last resort if you have to to make the numbers. But as soon as you get cash flow switch to an amorized loan.
02/14/05 20:16:09 Ralph_Roberts: Hi Al!
02/14/05 20:16:09 Steve: Good evening everybody
02/14/05 20:16:13 Al_Lee: Ahhhh! That feels better!
02/14/05 20:16:14 Ralph_Roberts: hi steve
02/14/05 20:16:17 Mike_Summey: Finally got the ole fingers working Al?
02/14/05 20:16:25 Steve: Hi Ralph
02/14/05 20:16:26 Al_Lee: Old is right!
02/14/05 20:16:34 Ralph_Roberts: on tap tonight, Roger Dawson and Mike Summey
02/14/05 20:16:35 Kim-OH: Al you are looking more like yourself now
02/14/05 20:16:44 Steve: What are we talking about tonight?
02/14/05 20:16:52 Al_Lee: Oh my gosh, pictures of you guys just popped up!
02/14/05 20:16:54 JackB: does anyone know about llc’s
02/14/05 20:16:57 Shane: What kind of rates are out there this week, they are quoting me 7.5 fixed 5 yr. 15 am or 1 over prime and 8.5 cap
02/14/05 20:16:59 TomB: There are different types of interest only loans. Be careful
02/14/05 20:17:08 Ralph_Roberts: Al, ;>
02/14/05 20:17:10 mark: Roger , its hard to make the NOI work when taxes in my area are $3500
02/14/05 20:17:18 Al_Lee: Wow, cool
02/14/05 20:17:26 Mike_Summey: Anything you want to talk about Steve.
02/14/05 20:17:35 Kim-OH: That is cool Ralph
02/14/05 20:18:12 JackB: my tax man said I should put the deed in the LLC and the Loan in my name. He said my LLC could charge me points for borrowing money. does this sound right?
02/14/05 20:18:22 Mike_Summey: Ralph is always playing around. I never know what to expect when I logon to the website.
02/14/05 20:18:28 Steve: Mike, last week I mentioned making an offer on a property. They were asking $60K, I offered $47,500. The property (somehow) sold for $65K…….
02/14/05 20:18:33 RickCanuck: I was wondering when your “old glory” was to make her appearance!
02/14/05 20:18:38 Roger_Dawson: Mark that’s a lot of taxes. In California we passed a Proposition that limits property taxes to one percent of the purchase price plus a two percent increase each year.
02/14/05 20:18:39 sermiex: Really sorry I can’t stay tonite - Ralph, I’ll get the chat when it’s posted. Got a feeling there’ll be some good info tonight…
02/14/05 20:18:45 Kim-OH: Mike that sounds about right
02/14/05 20:18:46 Ralph_Roberts: expect the unexpected :/
02/14/05 20:18:52 Steve: Well, I got a call today saying the financing fell through and they wanted to know if my offer still stands!
02/14/05 20:19:02 Al_Lee: Jack, it is a violation of the loan terms to put the property in an nbame other than yoru own personaal name unless you have a written permit to do so from the lender
02/14/05 20:19:21 TomB: Most lenders will not allow that.
02/14/05 20:19:35 TomB: Hi Doug
02/14/05 20:19:42 Doug_in_CT: Hi Tomb
02/14/05 20:19:53 Mike_Summey: Jack, I hold all of my properties in llcs, but for estate planning purposes. According to my CPA when the properties are held in a single member LLC they are treated for tax purposes the same as if they were held individually.
02/14/05 20:19:59 Steve: Patience, patience, patience!
02/14/05 20:20:00 Mike_Summey: Hi Doug
02/14/05 20:20:12 Doug_in_CT: Hi Mike!
02/14/05 20:20:15 Mike_Summey: Hi Ronh
02/14/05 20:20:36 Kim-OH: Steve does that mean you will go for the property?
02/14/05 20:20:37 Al_Lee: Mike, I think you are using commercial lending in you llc.
02/14/05 20:21:06 Al_Lee: If you use a Fannei Mae type loan you won;t be allowed to put the property int an LLC
02/14/05 20:21:10 Shane: Kim what part of ohio are you from
02/14/05 20:21:15 Steve: Kim, sure. Nothing makes it less attractive now.
02/14/05 20:21:32 Kim-OH: Shane Southwest
02/14/05 20:21:33 MarkinNC: The credit union where I have most of my property has no problem with the property in an LLC as long as I personally sign for the note.
02/14/05 20:21:37 Kim-OH: Steve I understand
02/14/05 20:21:44 Mike_Summey: Hi TT
02/14/05 20:21:46 JackB: thats what I heard, but after I get the fannie mae loan can I do a quick claim deed of trust?
02/14/05 20:21:48 ronh: Hi Mike!
02/14/05 20:22:07 Kim-OH: Mark that’s good to know, my credit union just last month started with business accounts
02/14/05 20:22:07 Al_Lee: Mark, that is a good arrangement, but what are the loan terms?
02/14/05 20:22:35 Al_Lee: JackB, that is not legal. You are deceiving the lender
02/14/05 20:22:37 Doug_in_CT: JackB that is what we did on our excellent attourney’s advice here in CT
02/14/05 20:22:42 Mike_Summey: Steve, I’ve had a few of those experiences and each time I lowered my offer a little and resubintted it.
02/14/05 20:22:47 Kim-OH: wb Roger
02/14/05 20:22:58 Kim-OH: Jack it’s a quit claim deed
02/14/05 20:23:39 Steve: Mike, I thought of doing the same thing but I know the numbers work well for me at my offered price and there are several other investors looking at that property. I thought I would be safe on this one.
02/14/05 20:23:46 Roger_Dawson: Thanks Kim, I guess my laptop went to sleep because I didn’t contribute.
02/14/05 20:23:57 MarkinNC: They will do it only on arms which they keep in house, all of there fixed rate loans are sold and they won’t do those for investment properties. They have great rates though 5.25% for an 80% first right now
02/14/05 20:24:00 Kim-OH: Roger I hate when that happens
02/14/05 20:24:02 JackB: Al_Lee How do you figure, the loan is still in my name. the property is in the LLC
02/14/05 20:24:06 Doug_in_CT: Roger are you sure it was just your laptop?
02/14/05 20:24:12 Al_Lee: Jack and Doug, doing that gives the lender the right to call the loan according to the “due on sale” clause that is in every such loan document.
02/14/05 20:24:52 Al_Lee: While the lender will not likely call the loan now, they are likely to do so later when interest rates are higher than what you are paying so they can get their cash back to loan out at a higher rate.
02/14/05 20:25:03 MarkinNC: Sorry, I was wrong its 4.25% on a 30 year 3/1 ARM
02/14/05 20:25:07 TomB: Good point Al.
02/14/05 20:25:13 JackB: how often do they dothat? as long as make my payment every month I don’t think they will care. Will they?
02/14/05 20:25:22 TT: Mark what bank is this?
02/14/05 20:25:32 Mike_Summey: Hi Eddie
02/14/05 20:25:40 Al_Lee: Jack, read the “due on sale” clause in your loan. Peopel have had their loans called for dong just that on the advice of “smnart lawyers” who try to out smart the system
02/14/05 20:25:42 Roger_Dawson: Speaking to those loan brokers in Florida last week, I realize how flexible they can be. They have dozens of lenders to choose from and each one has a dozen or more programs to choose from.
02/14/05 20:25:44 MarkinNC: State Emplaoyees Credit Union in NC
02/14/05 20:25:45 Kim-OH: Is that Eddie MI?
02/14/05 20:25:46 Eddie: hey
02/14/05 20:26:08 MarkinNC: thats Employees
02/14/05 20:26:14 Eddie: No
02/14/05 20:26:26 TT: Mark Wow my employer offers membership there!
02/14/05 20:26:42 Steve: I am glad to see a full room tonight, being Valentine’s Day
02/14/05 20:26:47 JackB: So how do you put a property in a LLC and get a loan or do you get the loan at higher rate because the property is in an LLC
02/14/05 20:27:06 Al_Lee: I have been an investor for over 30 years and people bring up that scheme to me all the time. They get if from some lawyer who will not be the guy whose loan gets called, but he will get the fee for forming the LLC
02/14/05 20:27:10 Steve: So many romantics…lol
02/14/05 20:27:12 Kim-OH: Jack if your LLC is brand new you likely can’t get a loan in the name of the LLC
02/14/05 20:27:30 TomB: It’s Valentines Day? I’m in trouble!
02/14/05 20:27:37 Mike_Summey: Jack, you just title the property in the llc, get the loan in the name of the LLC and then you usually have to personally guarantee it.
02/14/05 20:27:41 JackB: it is brand new, I just applied last week
02/14/05 20:28:08 Kim-OH: Mike do you know what lenders will lend in that situation
02/14/05 20:28:23 JackB: Mike, is the loan rate higher because it is in an llc?
02/14/05 20:28:24 Kim-OH: Hands Roger some duct tape
02/14/05 20:28:50 Mike_Summey: Kim, my lenders don’t care what name I put the property in as long as I’m good for the loan.
02/14/05 20:28:57 MarkinNC: The other interesting thing they do is as long as I show a lease that covers all notes on a property they don’t consider those notes when qualoying for a new loan, but will still count excess income (I think). Very nice for someone just starting out.
02/14/05 20:29:14 Doug_in_CT: I preordered my copy of “Weekend Millionaire Mindset” yesterday at Amazon.
02/14/05 20:29:34 Roger_Dawson: thanks Doug!
02/14/05 20:29:37 Mike_Summey: Great Doug, you’re going to love it.
02/14/05 20:29:45 Kim-OH: mike I rather figured that but I meant do you know what lenders might lend to a new llc?
02/14/05 20:29:46 MarkinNC: When is the new book supposed to be out Mike?
02/14/05 20:30:21 TT: Mark what are their loan terms and closing costs?
02/14/05 20:30:43 Mike_Summey: Kim, they probably won’t loan anything to a new LLC without a personal guarantee
02/14/05 20:30:55 Roger_Dawson: The publishing date for the new book is May 28.
02/14/05 20:30:57 Mike_Summey: Mark, the book is scheduled for release in May.
02/14/05 20:31:01 Kim-OH: Thanks mike that’s how I see it too
02/14/05 20:31:24 Al_Lee: Mike, since I put our radio interview on my website we have had over a hundred listeners. You’re gonna be famous!
02/14/05 20:31:41 Roger_Dawson: There’s not a problem with personally guaranteeing the loan, is there?
02/14/05 20:31:43 MarkinNC: TT, they are very competitive, of course the down side is with rates so low and probably headed up it would be nice to have fixed rate loans right now.
02/14/05 20:31:53 JackB: Mike, when you look at a house and you figure what it will take to fix it up, how do you find out what a house would appraise for?
02/14/05 20:31:57 Mike_Summey: Kim, click on the little colored squares above the message bar and pick a darker color for your text. I’m having trouble reading it.
02/14/05 20:32:38 Mike_Summey: Al, you are making me a household word. Thanks!
02/14/05 20:32:53 Kim-OH: Mike is this better?
02/14/05 20:33:16 Mike_Summey: Jack, I don’t care what the house appraises for. Appraisals are for banks, not investors.
02/14/05 20:33:27 Roger_Dawson: Kim, did you get your offer accepted on the duplexes?
02/14/05 20:33:39 TomB: Has anyone noticed any softening in prices? If so, where?
02/14/05 20:33:42 Al_Lee: I have an llc, an LP, and a C-corporation. I have negotiated for loans into all of them. I can only find commercial loans into the “entities” and the terms are never as good as a standard real estate loan to my personal name. I like 30-year fixed-rate loans with 10-year interest-only periods in the front.
02/14/05 20:33:49 Steve: JackB, I have established a relationship with an appraiser who really looks out for me! You just have to make sure he/she is approved by the bank you use.
02/14/05 20:33:55 Kim-OH: Roger I don’t have a problem personally guaranteeing a loan
02/14/05 20:33:58 JackB: but you need to know what the bank will lend you after it is fixed up don’t you
02/14/05 20:34:22 Mike_Summey: Hi bsalus
02/14/05 20:34:58 Kim-OH: Roger thanks for remembering, I actually withdrew my offer before acceptance due to some major structural problems and I am now on the trail of a couple of triplexes
02/14/05 20:35:02 Mike_Summey: Jack, if you buy according to the way we teach, you will have no problem with appraisals.
02/14/05 20:35:19 Roger_Dawson: Okay, Kim. Good luck.
02/14/05 20:35:20 Al_Lee: The lending I have found for the entities is never fixed for more than 5 years (at most) and is usually not fixed at all, but adjustable. An adjustable rate loan today coudl be yoru downfall in a year or two.
02/14/05 20:35:20 Steve: Mike, that is true but the higher appraisal helps with paying less out of pocket at closing.
02/14/05 20:36:07 Kim-OH: Thanks Roger, I also found a great property, a SF for myself and now I have to utilize your negotiating skills lol
02/14/05 20:36:11 Steve: I am able to get no money down loans if the purchase price is 90% of the appraised value or better.
02/14/05 20:36:13 JackB: If the numbers work, the house I just purchased should be a no money down deal.
02/14/05 20:36:44 Doug_in_CT: How and where do you do that Steve?
02/14/05 20:37:48 Mike_Summey: Steve, that’s only true after you’ve been at it a long time and built a track record with your lenders. In the mean time, the mean time most lenders will want 80% of Appraisal or 80% of cost whichever is less.
02/14/05 20:37:51 Al_Lee: Mike, you are already a household word around our house. If you remember, even my first-grade daughter knew about you.
02/14/05 20:38:12 Mike_Summey: Sl, she is a sweetie.
02/14/05 20:38:14 Steve: Doug, I have negotiated with a couple of banks in my area.
02/14/05 20:38:22 Roger_Dawson: Not all household words are good words!
02/14/05 20:38:25 Doug_in_CT: Any names?
02/14/05 20:38:41 Doug_in_CT: Roger it depends on the household.
02/14/05 20:39:03 Steve: Mike, either I am ahead of the game or I have them snowed. Either way, I will take those deals as long as they will let me.
02/14/05 20:39:08 Mike_Summey: Be nice Roger
02/14/05 20:39:25 Al_Lee: Roger is right, you don;t knwo what we say about you around the house.
02/14/05 20:39:42 Mike_Summey: Steve, can you darken your text a bit. It’s barely legible in this dim light
02/14/05 20:39:56 TomB: Steve, how many deals have you done like this up to now?
02/14/05 20:40:01 Mike_Summey: Hi m&e
02/14/05 20:40:22 Mike_Summey: m&e are you having problems staying in the chat?
02/14/05 20:40:34 Doug_in_CT: Mike, I think your issue with visibility of text is system specific. I can read all the text you are having trouble with.
02/14/05 20:40:47 Kim-OH: Mike is this better for you?
02/14/05 20:40:57 Roger_Dawson: Much better Kim
02/14/05 20:41:02 m&e: hello - just learning the chat
02/14/05 20:41:05 Steve: Tom, I have only purchased four properties (five units) so far and I have done them all like that.
02/14/05 20:41:13 Kim-OH: Roger good
02/14/05 20:41:22 Mike_Summey: Doug, yours os very light also. It could be system specific. I think the default text is the problem. Maybe Ralph can fix that.
02/14/05 20:41:32 Roger_Dawson: Kim now you’re back to a paler shade of grey
02/14/05 20:41:42 Doug_in_CT: Well, if Roger is having trouble too, maybe it is just the old men who are having trouble.
02/14/05 20:41:52 Kim-OH: Roger that’s a good thing, being pale smiles
02/14/05 20:41:56 TomB: Time to update the glasses.
02/14/05 20:41:57 Roger_Dawson: That’s cold Doug
02/14/05 20:42:04 Steve: That is odd, Kim’s text looks black to me.
02/14/05 20:42:32 Kim-OH: Steve I think it is black and it was black when I first entered
02/14/05 20:42:47 Doug_in_CT: I will try this.
02/14/05 20:42:50 Mike_Summey: Ralph, what color is the default color?
02/14/05 20:42:51 Roger_Dawson: Anybody noticing foreclosures in their market?
02/14/05 20:43:07 Mike_Summey: Doug, that’s mech better.
02/14/05 20:43:13 Al_Lee: There are a lot of foreclosures in the Dallas/Fort Worth market now
02/14/05 20:43:20 Kim-OH: Roger I’m in Ohio the state with the second highest FC rates in the country’
02/14/05 20:43:32 m&e: I have 25 units in 5 buildings - Here in Albany NY taxes utilities, insurance are all killing the bottom line - Management at 8% is becoming unaffordable - I think I will take over management to save money. Have you run across this problem and whatto do ?
02/14/05 20:43:39 Steve: Roger, there have been a ton of foreclosures in my area. The problem is, investors are swarming to them and the banks are reaping the benefit!
02/14/05 20:44:13 Mike_Summey: Hi Michelle
02/14/05 20:44:32 Kim-OH: Ralph is there anyway we can bold our text for Mike and Roger?
02/14/05 20:44:37 Roger_Dawson: We’re not seeing any foreclosures in California yet, but it has to come when every consumer has refinanced the equity out of their property.
02/14/05 20:44:50 Doug_in_CT: m&e We have noticed that one of our properties just got reassessed and the taxes went up enough to really eat into our cash flow.
02/14/05 20:45:12 Doug_in_CT: My plan is to raise the rents at the end of the lease period.
02/14/05 20:45:14 Steve: The last three foreclosures I made offers on sold for more than the asking price!
02/14/05 20:45:34 Mike_Summey: Hi JJ
02/14/05 20:45:43 JJ: Hey Mike, Rojer, Al, everyone
02/14/05 20:45:50 Al_Lee: Howdy
02/14/05 20:45:57 Roger_Dawson: Doug, it may be worth your while to protest those increases in appraised price. Very often they’ll back off.
02/14/05 20:46:01 Kim-OH: Steve now that does stink
02/14/05 20:46:13 JJ: Al…Mike says not to escrow Taxes and Insurance, what do you think?
02/14/05 20:46:15 Mike_Summey: Better type now, Kim
02/14/05 20:46:23 JackB: A loan officer told me spring is when most banks foreclose on properties. He said they hope to sell them in the spring and summer
02/14/05 20:46:48 Doug_in_CT: I used to be on a “board of tax review” in a small town here. For awhile our policy was to knock it down a little bit if someone complained.
02/14/05 20:47:29 Doug_in_CT: But then the word got out that we were softies and we had to hold the line and you really had to make a compelling case to get the taxes lowered.
02/14/05 20:47:34 Al_Lee: Regarding foreclosures: I recently interviewed a guy who runs a service helping investors fidn foreclosures and short sales in Texas. You can subscribe to their service for about $35/month and work the lists you get each month. I don;t remember the contact info, but it is in the recorded radio show on my website.
02/14/05 20:47:48 Kim-OH: Here in my area we have the board of revision, we can only protest the taxation rate from Jan through March of any given year
02/14/05 20:48:02 JJ: I just closed on a Duplex today
02/14/05 20:48:14 MarkinNC: Congratulations JJ
02/14/05 20:48:22 Mike_Summey: Great JJ, tell us about it.
02/14/05 20:48:23 Kim-OH: ^5 JJ
02/14/05 20:48:24 Roger_Dawson: Fighting city hall is very time consuming and frustrating but it might be worth a try.
02/14/05 20:48:28 Doug_in_CT: Great going JJ — What was the noi?
02/14/05 20:48:30 Mike_Summey: Hi jimmy
02/14/05 20:49:39 JJ: Well it could also be a Triplex (converted Storage unit)…Im going to get $2000/M from it… Im using a non-profit organization to rent the property…I dont have to pay utilities, management, etc
02/14/05 20:49:42 JJ: just pitt
02/14/05 20:49:48 Al_Lee: I have gotten my taxes lowered a number of times by protesting, but they seem to raise them right back up the next year.
02/14/05 20:50:02 JJ: which is like, around 12-1300 or so
02/14/05 20:50:36 Doug_in_CT: JJ Great going, finding the non-profits can be very rewarding we have found.
02/14/05 20:50:45 JJ: yes indeed
02/14/05 20:50:46 m&e: Mike and Doug - Between school and property taxes they average for a fourplex, about 6,000/year. What rate of leverage are you comfortable with that would make you start considering selling the property?
02/14/05 20:50:55 MarkinNC: JJ explain what you mean about the non-profit
02/14/05 20:51:09 Mike_Summey: Al, in NC the property is revalued once ever 4 years. There are firms that will appeal values for you for a fee. They usually charge the amount of tax they save for the first year.
02/14/05 20:51:10 Kim-OH: JJ that’s my situation here
02/14/05 20:51:35 JJ: just look for non-profit organizations that house people ith aids, or battered women, or ex-convicts, etc…
02/14/05 20:51:37 Doug_in_CT: m&e there is no selling going on here.
02/14/05 20:51:41 Mike_Summey: Hi George
02/14/05 20:51:50 Mike_Summey: Hi n2lights
02/14/05 20:51:58 Kim-OH: Mike we have an attorney who will go to the board of revision for us, she charges 50% of the first year savings
02/14/05 20:52:06 Al_Lee: Mike, they do that here too, but with revaluation every year you might not save anything in the long run. You pay what you saved the first year, then save notthing after that.
02/14/05 20:52:19 JJ: organization I found takes care of everything and you get more rent every month than if you would use section-8 or private tenant, and its guaranteed
02/14/05 20:52:25 MarkinNC: OH, I see somehow I read that that you had a nonprofit managing it for you. My fault, that does sound nice.
02/14/05 20:52:26 Mike_Summey: m&e, I’ve never sold a property.
02/14/05 20:52:32 TomB: Attorneys in NYC charge a percentage of the amount they save you.
02/14/05 20:53:31 JJ: Al do you think taxes and Insurance shouyld be escrowed, or you pay them yourself?
02/14/05 20:53:42 Steve: JJ, do the non-profits sign the lease or is it the tenant? Are the leases longer on these deals?
02/14/05 20:53:51 Al_Lee: In Texas you don;t need an attorney to lower you property tax, you just fill out a form telling them why you think it should be lower. If you just bought it for less than the appraisal valuation, they automaticlaly lower it to that price.
02/14/05 20:53:56 JackB: JJ, be careful with that, I know a lady who took on a renter from a non-for-profit organization, and they stopped paying the rent after a few months.
02/14/05 20:54:07 Doug_in_CT: JJ we have worked with an agency that takes care of individuals with difficult ailments like autism. After renting to them it is hard to go back to the general public.
02/14/05 20:54:18 JJ: ok
02/14/05 20:54:27 Mike_Summey: Tom, the firms I’m talking about are not attorneys. They specialize on appealing tax valuations only.
02/14/05 20:54:44 Al_Lee: I always escrow taxes and insurance nowadays. The bank is then responsible for any penalties and I don;t have to have $40,000 every January to pay proeprty taxes liek I used to have.
02/14/05 20:55:52 Steve: Wow, Al and Mike have such different opinions. It is interesting to see the different view points…
02/14/05 20:55:54 m&e: I don’t intend to sell - I have an LLC and wish to grow - I have done 2 1031 exchanges and so I have protected the gains from both - Mike have you exchanged into bigger properties
02/14/05 20:56:32 Kim-OH: Mike and Roger if you click on the plus sign the print gets bigger, that is so great for those of us who need a little help with being able to read the text
02/14/05 20:56:36 Al_Lee: I know some people feel they can save soem money by paying the taxes themselves and getting the use of their money until they need to pay it, but it is a real muisance to have to get up all that cash at one time every year
02/14/05 20:56:50 Al_Lee: nuisance
02/14/05 20:56:55 TomB: m&e, what type of properties do you have in Albany?
02/14/05 20:57:02 Doug_in_CT: Kim, would you quit picking on those two old men!
02/14/05 20:57:26 Mike_Summey: Al & I differ on escrows. I never let a bank hold my money and hope that they will pay on time…they don’t. I’ve had to pay the taxes myself and then try to get my money back from the escrow, which may take months. Texas may be different from NC. In NC the property owner, not the lender is resposnible for penalties…plus, if the taxes aren’t piad, it’s the property owner, not the lender whose name gets advertised as not paying the taxes.
02/14/05 20:57:32 Kim-OH: Doug I’m not picking on Mike and Roger I have just enlarged the text for myself and thought I would share the information
02/14/05 20:57:44 m&e: One 8 unit and a mixed use 2 commercial storefronts and 2 apartments - In the burbs I have 3 fourplexs
02/14/05 20:57:50 Doug_in_CT: I know— it is terrible getting old.
02/14/05 20:58:11 Kim-OH: pfffffff Doug
02/14/05 20:58:30 TomB: Impressive m&e. How long have you been investing?
02/14/05 20:58:49 Roger_Dawson: Thanks Kim. Click the plus sign four or five times and it goes into bold, which is easy to read, even in your pale grey.
02/14/05 20:58:53 Al_Lee: Mike, I think it is different here. If you are escrowing the taxes and insurance, the lender is responsible for it being paid on time. That is true even if they did not withhold enough during the year. they will make it up next year, of course.
02/14/05 20:59:00 Mike_Summey: Al, why don’t you set up an escrow account and pay into it yourself. Then you have the money and the control.
02/14/05 20:59:15 m&e: Since 99
02/14/05 20:59:25 Kim-OH: Roger I don’t understand why it’s pale gray when I have chosen black
02/14/05 20:59:38 Doug_in_CT: Albany has been red hot I have heard.
02/14/05 20:59:41 TomB: Very cool. Keep it up!
02/14/05 20:59:46 Roger_Dawson: Neither do I Kim. I guess it’s a relationship thing.
02/14/05 21:00:10 Kim-OH: Roger, you just choked me up over that one
02/14/05 21:00:12 m&e: yes - value has doubled in 4 years - At least for me
02/14/05 21:00:18 Al_Lee: Mike, I still have about a half dozen properties that are not escrowed. I actually don;t have a big problem raising the money, it is just a juige nuisance planning for that expense and my bookkeeper spends a lot of time checking that we haven;t missed anything.
02/14/05 21:00:19 TomB: I have heard that about the New Haven area.
02/14/05 21:00:23 Doug_in_CT: Roger are you saying that once you tried Black you will never go back.
02/14/05 21:00:44 Roger_Dawson: Yes, but have you ever tried English?
02/14/05 21:01:21 Doug_in_CT: You don’t mean English, you mean Brittish.
02/14/05 21:01:39 Al_Lee: British?
02/14/05 21:01:41 Roger_Dawson: Al, you need to understand that Mike is a wizz on numbers. He’s got an account somewhere where he keeps the money the tooth fairy left him.
02/14/05 21:02:01 Al_Lee: I noticed he ain’t got no teeth!
02/14/05 21:02:11 Mike_Summey: Al, I escrow money for taxes and insurance in an escrow account that I control. That way I get the advantage of interest earned on the money, plus I maintain a much larger deposit base with my banks. They like that.
02/14/05 21:02:19 Doug_in_CT: But the fairy has been very, very good to him.
02/14/05 21:02:21 Roger_Dawson: NO, if you’re British you could be from just about anywhere in the Empire. English is the only way to go.
02/14/05 21:02:51 Steve: Great point, Mike
02/14/05 21:02:51 Kim-OH: Mike that’s how I view it too
02/14/05 21:03:03 Doug_in_CT: We left that empire a long time ago and we Americans took English over and gave it to the world.
02/14/05 21:03:07 TomB: Roger, do you own any property in the Empire?
02/14/05 21:03:18 Roger_Dawson: No, it
02/14/05 21:03:21 Al_Lee: Mike, I do understand that point of view. I used to have well over a dozen proeprties that were not escrowed. It got to be a real hassle and I have refi’d or sold most of them to get rid of the hassle. I am into simplified investing.
02/14/05 21:03:33 Roger_Dawson: No, it’s too bloody expensive over there now.
02/14/05 21:03:37 JackB: Good Night all
02/14/05 21:03:47 Kim-OH: night Jack
02/14/05 21:03:48 Mike_Summey: Goodnight Jack
02/14/05 21:03:48 JackB: Thanks for the Info
02/14/05 21:03:52 Roger_Dawson: Good night Jack.
02/14/05 21:03:53 MarkinNC: dnight
02/14/05 21:04:11 Doug_in_CT: Good Bye JackB. Sweet Valentine Dreams.
02/14/05 21:04:27 RickCanuck: Thank you and good night!!!
02/14/05 21:04:39 Kim-OH: night Rick
02/14/05 21:04:39 Mike_Summey: Al, when you escrow for taxes and insurance for several hundred properties, it comes to quite a large sum of money.
02/14/05 21:04:48 Al_Lee: It was driving my bookkeeper nuts to keep track of whether we got the statemetns and bills for every taxing entity (soem hosues had 5 taxing entities) and then whether we paid them all (only once, we hoped).
02/14/05 21:05:10 Roger_Dawson: I need to leave you. Thanks everyone. :> ;>
02/14/05 21:05:14 n2lights: Hey guys, i heard you’re in the Orlando area . This is where I live and hope to invest.What do you think of this market? When do you think the bubble will burst?
02/14/05 21:05:20 Kim-OH: Al now that’s complex, we only have one taxing entity
02/14/05 21:05:26 Kim-OH: Night Roger
02/14/05 21:05:33 Steve: Al and Mike - one of these days I hope to have your problems…
02/14/05 21:05:43 Al_Lee: Mike, I have even started buying Tenancy-in-Common interests in commercial buildings to further simplify life. It is really, really easy to do.
02/14/05 21:05:43 TomB: itto
02/14/05 21:05:53 TomB: Ditto
02/14/05 21:05:58 Mike_Summey: Al, I don’t have a bookeeper. I do it meyself…it’s less complaicated taht way.
02/14/05 21:06:48 TomB: Mike, with several hundred properties, isnt that time consuming?
02/14/05 21:06:55 Doug_in_CT: I have been reading a lot about the bubble lately but I think it is best to speak in terms of bublets.
02/14/05 21:06:55 Al_Lee: Kim, Many of my houses have city, school district, college district, county, homeowner associateon, and sometimes one or two other taxing entities.
02/14/05 21:07:25 Al_Lee: Mike, your typing is starting to look like mine
02/14/05 21:07:41 Kim-OH: Al with the exception of hoa, all the others are rolled into one payment each 6 months here
02/14/05 21:07:58 MarkinNC: College district taxes, AL I need to move there (i’m a College Prof in my other life)
02/14/05 21:08:12 Mike_Summey: Everyone, I hate to leave you early tonight, but I’m exhausted. I’ve been in class 12 hours today, 4 of which was in a flight simulator getting put through every imaginable uncomfortable situation immaginable. I’m going to have to leave you ase well. Tomorrow is another day of the same.
02/14/05 21:08:13 TomB: Doug, and everyone, What do you read to keep informed about the markets?
02/14/05 21:08:18 Steve: Al, aren’t all of those taxed totaled on one bill from the county where the property is located?
02/14/05 21:08:29 Al_Lee: Mark, if you see what kind of house you can buy for the price here–you will move here
02/14/05 21:08:34 Kim-OH: Mike thanks and take care of yourself
02/14/05 21:08:48 TomB: Bye Mike
02/14/05 21:08:55 Steve: Thanks Mike.
02/14/05 21:08:59 MarkinNC: But AL I’ve been there in the summer and its a bit ot for me.
02/14/05 21:09:05 Ralph_Roberts: good night, Mike
02/14/05 21:09:07 Mike_Summey: YOu guys keep talking and I’ll see you next week.
02/14/05 21:09:12 MarkinNC: Good night Mike
02/14/05 21:09:18 Mike_Summey: Goodnight
02/14/05 21:09:28 Al_Lee: We have county appraisal districts that send a bill for the aggregate, yes. Sometimes, though a house is in two counties, or somethign like that.
02/14/05 21:09:41 Doug_in_CT: TomB. I did a strange thing and now I am getting a lot of great information. I set a google alert on the words “Median Home Price” now I get 2 or 3 good articles a day on different markets around the country. Many of them have been really great.
02/14/05 21:09:52 Al_Lee: You may get only one bill for one house, or several for another
02/14/05 21:10:15 TomB: hanks Doug. I’ll give that atry.
02/14/05 21:10:29 TomB: Thanks.
02/14/05 21:10:39 Al_Lee: Mark, everything is air conditioned here. I grew up in New York
02/14/05 21:10:43 Kim-OH: Al, are you in TX?
02/14/05 21:10:56 Al_Lee: I am in Dallas, TX
02/14/05 21:11:13 Kim-OH: Thanks Al
02/14/05 21:11:47 Doug_in_CT: I got one today describing a couple of guys who are having great success in Florida. They make about $30,000 a year in typical jobs, but they have leapfrogged their way into Million $ gated communities by “learning the system.”
02/14/05 21:12:10 TomB: wow!
02/14/05 21:12:12 Ralph_Roberts: Chat transcript will be posted shortly… g’nite all! Stay as long as you like. Last one out of the chat please turn off the lights. 
02/14/05 21:12:26 Al_Lee: If you get a chance, go to my website and look at the articles and the recorded radio show there–including the one I did with Mike. It is www.Renthouses.org or www.myRentProperty.com
02/14/05 21:12:26 Kim-OH: Night Ralph and thanks
02/14/05 21:12:36 Doug_in_CT: How do you turn off the lights Ralph?
02/14/05 21:12:38 Eddie: MarkinNC, what part of NC are you in?
02/14/05 21:12:47 Doug_in_CT: I don’t see a button for that.
02/14/05 21:13:00 TomB: They’re both very informative sites Al.
02/14/05 21:13:00 MarkinNC: Boone NC far western part of the state.
02/14/05 21:13:02 Steve: I have to run too. See you all next week, hopefully.
02/14/05 21:13:11 Kim-OH: Night Steve
02/14/05 21:13:13 Steve: Good night…
02/14/05 21:13:17 Kim-OH: I’m right behind you
02/14/05 21:13:23 Eddie: ok, I’m in eastern NC
02/14/05 21:13:27 Doug_in_CT: Cya Kim,
02/14/05 21:13:27 TomB: My wife beckons. Goodnight everyone.
02/14/05 21:13:37 MarkinNC: What part Eddie?
02/14/05 21:13:43 Doug_in_CT: Goodnite all.
02/14/05 21:13:57 Eddie: Just North of
02/14/05 21:14:02 Eddie: Greenville
02/14/05 21:14:27 Kim-OH: Al I just checked out the first site you put up, very cool
02/14/05 21:14:54 Al_Lee: Kin, here is one more: www.TurnkeyInvestments.net
02/14/05 21:14:59 Al_Lee: Kim
02/14/05 21:15:09 MarkinNC: My brther is on Rocky Mount so I know that part of the state a little. Actually have been trying to get him to look at some properties there. Much more reasonable than here at first glance.
02/14/05 21:15:34 Al_Lee: That will give you an ide of the prices and rents we are finding here. I never buy anything that won;t cash flow
02/14/05 21:15:36 Kim-OH: Al thanks, my desktop is getting overloaded lol
02/14/05 21:15:47 JJ: Al you only buy in area where the rent is at least 1% of home prices?
02/14/05 21:15:59 Al_Lee: JJ, that is a minimum
02/14/05 21:16:02 JJ: k
02/14/05 21:16:05 Al_Lee: I try to get better, if I can
02/14/05 21:16:06 Eddie: Yea, I had some pretty good deals over the past 1 1/2 years
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