Chat 03/14/05
Posted on March 14, 2005
20:04:09 Kim-OH: Greetings all
20:05:16 Kim-OH: Hi Ralph, how are you
tonight?
20:05:17 Ralph_Roberts: hi guys
20:05:20 Kim-OH: Hi Mike
20:05:24 Mike_Summey: Hello everyone
20:05:25 Ralph_Roberts: fine, Kim…
hope you are too
20:05:36 Mike_Summey: Hi Kim
20:05:45 Mike_Summey: You’re early
tonight
20:05:54 Kim-OH: Thanks Ralph, I have
pneumonia so I’m a bit under the weather lol
20:06:10 Ralph_Roberts: urk… I had
that a few years ago… not fun!
20:06:12 Kim-OH: Mike Indeed, I just
checked my email and there was the reminder
20:06:28 Mike_Summey: I guess it
worked!
20:06:32 Mike_Summey: Hi Gary
20:06:35 Ralph_Roberts: hi Gary
20:06:35 Kim-OH: Mike like a charm
20:06:38 Kim-OH: Hi Gary
20:06:45 Gary: Hi everyone. 
20:07:04 Kim-OH: I’m tired as I looked
at 6 properties today and am going to write offers on three of them
20:07:20 Mike_Summey: Roger will be
with us on a dial up connection tonight. He is at his home in Arrowhead, CA
tonight…no high speed Internet service there.
20:07:24 Gary: Mike, what are thoughts
about a possible real estate bubble?
20:07:55 Mike_Summey: Gary, it for
real if you’re looking to buy now and sell for a profit later.
20:07:59 Kim-OH: Mike is Arrowhead a
remote location?
20:08:26 Kim-OH: Hi Bruce
20:08:32 Ralph_Roberts: hi Bruce
20:08:36 Mike_Summey: If you plan to
buy and hold as we teach, you shouldn’t be effected other than finding it harder
to find properties right now.
20:08:41 Mike_Summey: Hi Bruce
20:08:50 Gary: I see.
20:08:56 Bruce: Hi all
20:09:03 Gary: Hi Bruce
20:09:22 Kim-OH: Mike, it’s turning
into a buyers market here in my area
20:09:23 Mike_Summey: Hi Penny
20:09:29 Kim-OH: Hi Penny
20:09:29 Penny: Hi there!
20:09:43 Ralph_Roberts: hi Penny!!!!
20:09:47 Penny: Hi Kim and everyone!
20:09:57 Mike_Summey: Kim, you are
going to see that trend growing as rates increase and people begin to have
problems.
20:10:01 Gary: Mike, Wendy Patton
spoke at our local real estate group in Memphis this weekend about lease option
purchases. Have you done many of these?
20:10:31 Mike_Summey: Gary, I’m
familiar with lease options, but I’ve never done one personally.
20:10:33 Kim-OH: Mike, Ohio is second
only to Indiana in foreclosures so the trend is here now
20:10:48 Bruce: Mike, do you think
most of the issues will be based on adjustable rates increasing?
20:11:12 Mike_Summey: Lease options
are a good way to get started if you don’t have any money and marginal credit.
20:11:20 Gary: Memphis is supposedly
the bankruptcy capital in the country now, so we will be seeing a lot of
foreclosures herer.
20:12:10 Ralph_Roberts: anyone look at
the real estate offerings on eBAY? I see the same offerings on there over and
over. 
20:12:18 Ralph_Roberts: Hi Rick
20:12:21 Mike_Summey: Bruce, Gary,
Kim, you will find deals in which people are willing to trade their equity in
exchange for salvaging their credit.
20:12:24 Kim-OH: Hi Rick
20:12:24 Rick: Good evening
20:12:33 Mike_Summey: Hi Rick
20:12:37 Kim-OH: Mike I have one like
that now
20:12:45 Gary: Mike, do you run ads in
the paper to find those people?
20:13:24 Kim-OH: Mike the homeowners
are doing a lot of the work to make the short sale possible after I get the home
released from the BK
20:13:31 Mike_Summey: Those are
situations where you can legitimately help people by salvaging their credit so
they can buy again later and be smarter than they were when they bought the
first time.
20:14:13 Mike_Summey: Gary, I’ve never
run ads, but many people do and have much success doing so.
20:14:20 Kim-OH: Mike exactly, but
sometimes the homeowners are so distraught that they don’t think they will ever
buy another property
20:14:21 Mike_Summey: Hi Al &
sermiex
20:14:24 Gary: I would like to try to
find some of those people before they get too far into the foreclosure process.
20:14:33 Kim-OH: Hi Al and sermiex
20:14:39 Ralph_Roberts: hi Al and
sermiex
20:14:57 Kim-OH: Gary the one I"m
working on was not in FC when I made the contact
20:14:58 Mike_Summey: Kim, part of
getting a great deal is helping the sellers see how it is to their benefit to
make a deal.
20:15:00 Gary: Once the bank takes
back the property, they usually turn them over to realtors, and realtors
generally work in the retail range - not wholesale.
20:15:06 Ralph_Roberts: hiya, Shane…
hi Steve!
20:15:10 sermiex: Hi All!!
20:15:12 Mike_Summey: Hi Shane &
Steve
20:15:13 Al_Lee: Hi, Mike, everyone
20:15:16 Kim-OH: Hi Shane and Steve
20:15:19 Gary: Kim, sounds like you
caught them at a good time.
20:15:21 Ralph_Roberts: welcome bsalus
20:15:21 Mike_Summey: Hi bsalus
20:15:23 Kim-OH: Mike I understand
that
20:15:34 Steve: Hey everybody
20:15:38 Shane: Hi Every one
20:15:48 Kim-OH: Gary, yes I was
helping the brother out in buying a home and he gave me his sister’s information
20:16:14 Mike_Summey: Everyone, when a
person loses a house to foreclosure, they lose both their home and their credit.
If you can help them slavage their credit, thay can get back on their feet much
quicker.
20:16:18 Gary: Kim, sounds like you’ve
got a good network of contacts going? Are you full time or part time?
20:16:43 Gary: Mike, any good ideas on
how to find them before they get into foreclosure?
20:16:51 Kim-OH: Gary, I’m full time
because I have multiple disabilties and can’t work for anyone else lol
20:17:01 Mike_Summey: Rather than run
ads in the newspaper, I try to cultivate several brokers to keep an eye out for
deals for me.
20:17:09 Gary: Kim, well sounds like
that works for you.
20:17:10 Kim-OH: Mike that’s exactly
what I explain to folks
20:17:34 Kim-OH: Gary, yes all that I
do is primarily word of mouth
20:17:37 Mike_Summey: Hi smason
20:17:43 Gary: Mike, Kim, these
brokers know that you’re buying at wholesale?
20:17:43 Kim-OH: Hi smason
20:17:43 smason: Hi Mike
20:17:52 Al_Lee: Anyone here from San
Francisco, or surrounding area?
20:17:55 smason: Hi kim-OH and everyon
eelse
20:18:01 Gary: Or at least close to
wholesale?
20:18:14 Steve: Foreclosures in my
area attract so many investors, they are selling for more than the asking price.
20:18:17 Kim-OH: Gary, I have some
brokers who refer folks to me if they can’t get them refinanced
20:18:20 Gary: Memphis here - long way
from SF. lol
20:18:27 Mike_Summey: Hi Roger, I was
about to give up on you.
20:18:29 Bruce: Mike, do you try to
cultivate a lot of banking relationships? Or keep the relationships to a slim
few?
20:18:30 Al_Lee: I am doing a Learning
Annex semionar in SF tomorrow ath the Crowne Plaza
20:18:31 Kim-OH: Steve, yes you have
to find them first
20:18:31 Gary: Steve, where are you?
20:18:34 Kim-OH: Hi Roger
20:18:45 Steve: I am in SC
20:18:50 Al_Lee: Hi, ROger.
20:19:06 Gary: SC must be a good
market right now for RE investors.
20:19:15 Al_Lee: Roger, did you see
the article where I conceded that you were right about the one-percent rule?
20:19:41 Roger_Dawson: Hi! I’m using a
dial up service from my home in Lake Arrowhead California and it is really slow.
20:19:42 Steve: Kim, I find them
relatively quickly but the foreclosure companies have gotten smart and now they
wait for bids to come in before accepting an offer
20:19:59 Rick: 3 hours NW of Toronto
Canada…
20:20:02 Shane: What kind of cap rates
is everyone finding or wanting deals at.
20:20:11 Bruce: Al I’ll bite, what
one-percent rule?
20:20:16 Kim-OH: Steve, forclosure
companies?
20:20:20 Steve: I just made an offer
on a foreclosure. The asking price was $47K and it sold for $56K!
20:20:29 Roger_Dawson: Al, no I
didn’t! But I forgot what the one per cent rule is.
20:20:30 Mike_Summey: Steve, the best
time to find the deals is before they go to foreclosure. Once a property goes
through foreclosure, everyone loses.
20:20:54 Al_Lee: I have been saying
you shoudl get rent of 1% of purchase price, or don;t buy the proeprty. Roger
said you coudl make out with less because of low interest rates. He is right!
20:21:21 Shane: Do you apply the 1%
rule to just sfh or apartments too?
20:21:36 Kim-OH: Mike I agree totally
with you, must get them prior to the FC
20:21:39 Al_Lee: Roger, I sent you an
email with a link to the article "makign you famous". You may not have
received the email.
20:21:41 Gary: Al, did you do any
what-if analysis to see what interest rate increases do to the math?
20:21:42 Mike_Summey: Steve, I caught
a builder in toruble and was able to make a deal with him with the bank’s
agreement just days before the foreclosure sale. It was a win win for everyone.
20:21:53 Roger_Dawson: I think that
with today’s financing you could pay 120 times the monthly rent and still be
okay. But, it’s a very crude rule of thumb.
20:22:18 Steve: Mike and Kim, sounds
like you have to be in the right place at the right time.
20:22:20 Mike_Summey: Al, unless the
subject lines contain $$$$ Roger delets them.
20:22:34 Al_Lee: Gary, No, but at
under 7% and with the falling insurance premiums in Texas, it is working very
well. Especially using thie interest-only loans!!!
20:22:49 Gary: Al, that sounds good!!
20:22:56 Al_Lee: Mike, that Roger is a
mercenary sob, isn;t he?
20:23:06 Mike_Summey: Yep
20:23:15 Bruce: Al, are you using true
I/O’s? Or option arm’s?
20:23:23 Roger_Dawson: SOB = subject
of Britain, I assume?
20:23:28 Gary: Do you guys offer
finder fees to brokers that bring you distressed sellers?
20:23:36 Kim-OH: LOL @ Roger
20:23:45 Mike_Summey: Al, we have him
on a slow dial up connection, so we should abuse him a bit while he is not in
position to defend himself.
20:23:56 Al_Lee: Bruse, I use 30-year
fixed-rate with ten year interest-only period. never use an ARM–except in
special circumstances.
20:24:09 Kim-OH: Gary, I let the
brokers know that when I have someone who needs financing I will send them
business
20:24:19 Gary: Al, what’s the rate on
that?
20:24:33 Gary: Kim, so you both refer
to each other.
20:24:35 Al_Lee: I woeul use an ARM if
rates were very high since I woeul be expecting to refi soon when they drop. To
use an ARM now is foolish. You coudl lock in 6.5% for 30-years!
20:24:40 Bruce: Al, What would a
special circumstance be?
20:25:01 Kim-OH: Gary, yes, this is a
people business and I remember that every morning when I get up
20:25:04 Mike_Summey: Everyone, the
brokers that I work with know that if they bring me a deal, I will reciprocate
by allowing them to handle a deal I find on my own.
20:25:34 Bruce: Al, guess you were in
my mind and answered my question before I asked.
20:25:55 Gary: Mike, sounds like you
and Kim have similar relationships with your brokers, so it sounds like that’s
working.
20:26:14 Al_Lee: Bruce. 1) when rates
are very high and I expect them to fall so I can refi in the next 3 years or so.
2) when I know I will sell before the teaser rate expires. 3) if I got so low a
price and coudl not get a good fixed-rate loan that I am willing to take the
risk.
20:26:26 Mike_Summey: Anyone in
tonight’s chat that was asking about self directed iras & 401(k)s a couple
of weeks ago?
20:26:34 Al_Lee: Rates are low now, so
you shoudl get fixed-rate loans to lock those low rates in.
20:26:35 Gary: Mike, I was.
20:26:46 Bruce: I was as well.
20:27:12 Gary: Mike, I found three
companies that do it: Entrust, GuidantFinancial and Equitrust ( I think).
20:27:40 Gary: Mike, I’ve also been
trying to compare their management fees and rate structures.
20:27:46 Mike_Summey: Next week, Roger
will not be with us, but I will have an expert in self directed iras &
401(k)s. He will be able to answer all those question that I couldn’t.
20:28:02 Kim-OH: Mike, whos coming
next week?
20:28:13 Gary: Mike, that sounds
great! I will definitely sit in on that one.
20:28:24 Mike_Summey: A gentleman
named Jim Hitt
20:28:42 Kim-OH: mike that’s great,
thanks!!!
20:28:47 Mike_Summey: I’ll get out
more information on him in the next couple of days.
20:28:54 Kim-OH: wb Al
20:29:01 Gary: Mike, what’s Jim’s
background?
20:29:03 Mike_Summey: Have to go fix a
cocktail Al?
20:29:14 Steve: Mike, are we all going
to gang up and buy the new book on April 1?
20:29:19 Al_Lee: I fat-fingered the
keyboard and got logged out
20:29:24 Mike_Summey: Gary, I’ll be
sending a bio on him later in the week.
20:29:29 Al_Lee: But, you might have a
good idea
20:29:33 Gary: Mike, thanks!
20:29:59 bsalus: in the discussion of
fixed vs arm… what if you financed with an ARM (w/lower rate) and paid same
payment as 30yr fixed? Would the extra principle payment accelerate the loan so
that the total interest paid would be less even if rates go up
20:30:13 Mike_Summey: Steve, not April
1st. That’s the bound book date, but it will not be available to the public
until late April/early May.
20:30:52 Gary: Mike, Roger, do you
guys autograph copies?
20:30:57 Al_Lee: bsalus, I (unlike
Mike) have no interest in paying principal unless it is unaboidable. I use
interest-only loans when I can get them
20:31:01 Steve: Okay, I guess I can
wait…………
20:31:03 Mike_Summey: Hi New Orleans
Taxi - That’s Mark for short.
20:31:04 Kim-OH: Hi New and Doug
20:31:11 Mike_Summey: Hi Doug
20:31:15 Al_Lee: Leverage , Leverage,
Leverage!
20:31:22 Doug_in_CT: Hellooo Kim,
Hello Mike!
20:31:49 Al_Lee: If you will autograph
a check, Roger will autograph anything!
20:31:54 NEWORLEANSTAXI: That’s right,
I have sent out a few emails about your book! I am in a BNI network org.
20:32:13 Mike_Summey: Al likes
leverage and so do I, but I also like equity.
20:32:45 bsalus: Al, the extra
principle is something that can be taken out on refi when rates drop again
20:32:52 Steve: Equity is leverage,
isn’t it?
20:33:18 Gary: Al likes using opm. lol
20:33:26 Al_Lee: bsalus, why put it
"in" just to take it "out" again? Why not hold it yoruself
and let it accumilate so you can use it to buy another property?
20:33:33 NEWORLEANSTAXI: Mike, I have
a trip coming in at 11pm, going 2 1/2 hrs away, which means I won’t get home
till about 4am
20:33:34 Mike_Summey: Equity is what
enables you to buy a new propjet and pay cash for it.
20:34:09 Mike_Summey: Where to Mark
20:34:11 Al_Lee: I love equity, too.
Especially the kind that results from appreciation which did not cost me
anything !!!
20:34:14 NEWORLEANSTAXI: I will join
back at your next chat! Keep me posted. I have been a member 4 a while
20:34:19 Kim-OH: wb Bruce
20:34:27 Al_Lee: Real Estate is like
magin in the equity-building arena.
20:34:29 NEWORLEANSTAXI: Going to Port
Fourchon, near Grand Isle
20:34:30 Al_Lee: magic
20:34:35 Bruce: kim, thnks
20:34:43 bsalus: well, I was using
that to make an apples-apples comparison… of course you wouldn’t have to use
the extra cash in that way… but the lower rate does increase cash flow
20:34:49 NEWORLEANSTAXI: At the end of
nowhere at the mouth of the Mississippi
20:35:13 Mike_Summey: notaxi drove me
to the airport last summer when I was in NO. If you’re ever ther, he’s the man.
20:35:21 NEWORLEANSTAXI: he arrives at
11:07pm
20:35:33 NEWORLEANSTAXI: thanks mike
20:35:41 Gary: I’ve been to Grand
Isle. The crabs pinched my feet terribly - the water’s too dark to see them!
20:35:44 Al_Lee: bsalus, the problem I
have with arms is that the lower payment is only the "teaser", when
rates go up (I did not say if, but when) those lower payments disappear and you
have a problem you need to solve.
20:36:02 Mike_Summey: Al, the problem
with most people is that they don’t have the discipline to reinvest the extra
cash when using interest only loans.
20:36:03 NEWORLEANSTAXI: yep, it’s a
dark road at nite 2
20:36:21 NEWORLEANSTAXI: and the
police in Golden Meadow will ticket their mother
20:36:50 NEWORLEANSTAXI: its right by
Port FOurchon and Grand Isle
20:36:51 Bruce: Al, Mike, if you had a
negative cash flow on a property of 3,000 a year, but the equity was building up
apx. 50K a year, would you do the deal or walk?
20:37:01 Al_Lee: Mike, You are rght.
The best solution, though, is to teach them discipline. ALl successful people
have had to acquire it. I know you have it.
20:37:06 Mike_Summey: Hi Mark
20:37:09 NEWORLEANSTAXI: You all take
care, need sleep to make money later
20:37:23 MarkCT: Hi Mike
20:37:29 Kim-OH: night New
20:37:29 Mike_Summey: Goodnight Mark
20:37:38 Mike_Summey: Mark in NO
20:37:42 NEWORLEANSTAXI: well I have a
Mark to take my place. Hello Mark, from Mark. Nite everybody
20:37:50 Al_Lee: Bruce. I never walk
into a negative cash flow situatione. never, on purpose.
20:38:05 Steve: Mike, there is a great
opportunity to buy a golf course in my area. Only about 4 hours from you. All I
ask is free lifetime membership as my finders fee!
20:38:15 MarkCT: I figure it was good
timing
20:38:15 NEWORLEANSTAXI: *bleep*
20:38:28 Mike_Summey: Bruce, I don’t
do negative cash flow deals…period. there are too many positive ones to do a
negative one.
20:39:06 MarkCT: I just closed on a
duplex today. I’m very pleased with the deal. Good cashflow.
20:39:10 Gary: Mike, do you get
attorneys to review your offers before you make them?
20:39:23 Al_Lee: I agree. Why on Earth
would you take a know loss for a hoped-for gain some day in the future. If it
were a guaranteed gain, maybe.
20:39:26 Doug_in_CT: Where is it Mark?
I am in CT too.
20:39:56 Mike_Summey: Steve, you play
golf and I’ll buy property. Sort of like the deal I made with my banks, I told
them that if they would stay out of my business I’d stay out of theirs. That has
kept me from making loans to a lot of friends.
20:40:02 MarkCT: Its in Austin TX. I
find it too hard to find good cash flow properties in CT managed by a property
manager I can trust.
20:40:08 Mike_Summey: Gary, NO
20:40:49 MarkCT: Doug have you bought
in CT. If so what towns? I live in the Stamford area and prices here are through
the roof.
20:40:58 Al_Lee: Mark, I have two
4-plexes in the DFW area you can buy that will cash flow very nicely. About
16-20% Cash-on-Cash roi.
20:41:14 Doug_in_CT: Mark, I am
upstate in Ellington which is north of Manchester.
20:41:18 Steve: Mike, sounds like a
good compromise but I prefer to do both.
20:41:27 MarkCT: Sounds interesting
Al. Do you have a property manager for the properties?
20:41:40 Al_Lee: Mark, yes and
excellent manager.
20:42:02 Doug_in_CT: We have single
family houses in Hampton, Manchester, East Hartford, Ellington, East Hartford
and Norwich. And a 4 Plex in Manchester.
20:42:04 Bruce: Al, how much down
payment for the return mentioned above?
20:42:07 Mike_Summey: Hi Shaeley
20:42:07 MarkCT: If you want you can
Email me the details at unixnttalk@yahoo.com. I would appreciate it.
20:42:32 MarkCT: Doug do you have
someone managing them for you?
20:42:42 Al_Lee: Mark, I have them
lists at http://www.TurnkeyInvestments.net You can read all about them.
20:42:53 Doug_in_CT: No Not yet. I
think I need to grow a little bit more.
20:43:01 MarkCT: Very good Al. I’ll
take a look.
20:43:40 Mike_Summey: Everyone, we’ve
just made a deal with McGraw-Hill for a new book Weekend Millionaire: Frequently
Asked Real Estate Questions. It will be a great companion to the real estate
book. Our webmaster Raplh is helping with it.
20:44:03 Al_Lee: Bruce, look on the
website for full details. There are other deals there, too. I am getting lots of
good deals and putting them on the website. All of them will be positive cash
flow or I won’t even look at them.
20:44:13 Doug_in_CT: We are going to
look at a 7-Plex tomorrow in Vernon.
20:44:35 MarkCT: Al I have a contact
that provides leads on assumable mortgages in Dallas with a small downpayment. I
haven’t researched it further but do you think such a thing is legit or a scam?
20:44:38 Gary: Mike, will the faqs be
on the web site?
20:44:39 Mike_Summey: This new FAQ
book will follow the same chapter layout as the first book and will answer most
of the question people ahve been asking about each chapter.
20:45:07 Steve: You guys should get
plenty of material from these Monday night chats!
20:45:18 Doug_in_CT: Sounds very good
Mike. You guys are "turnin’ em out."
20:45:25 MarkCT: Good luck Doug. I’ve
seen home listings in your area and on paper they look like they cash flow
nicely.
20:45:28 Bruce: Al, as these
properties you own? Or do other people own them and put them on your website?
20:45:50 Al_Lee: Mark, there are
virtually NO good assumable mortgages available. I used to buy them all the
time. In 1989 the rules changed and no mortgages are assumable any longer. Any
that is old enough to be assumable is noat worth assuming.
20:45:52 Bruce: Sorry, are these ….
20:45:58 Doug_in_CT: Thanks Mark, How
did you get interested in Austin?
20:46:12 Mike_Summey: These chats
formed the basis of the new book. As we learned how many questions people have,
we decided to compile them in a usable format and turn them into a book with
more complete answers taht we have time to give here.
20:46:29 MarkCT: Thats what I figured
Al. It looked too good to be true. Made me nervous.
20:46:29 Al_Lee: Bruce, other people
own them. There is an explanation on the website. Too long to type here.
20:46:48 Bruce: Al, I’ll check it out.
20:47:15 Shaeley: When you talk about
assumable mortgages, does that include FHA deals?
20:47:30 MarkCT: I got interested in
Austin because the economy there is coming off a lull. Rents are up and
vacancies are down. Plus alot of articles have been written saying that Austin
is an up and coming place to live.
20:47:31 Al_Lee: Bruce. These are all
good deals. I buy some of them myself.
20:47:57 Mike_Summey: Al, FHA & VA
Loans are stilla ssumable. Assumption costs about $60.
20:48:11 Al_Lee: FHA and VA loans used
to be NQA (non-qualifying assumable). They no longer are.
20:48:12 Doug_in_CT: I hear Michael
Dell is making Austin hum.
20:48:28 Bruce: Mike, in your book you
state the banks love you because of the information you give them on a monthly
basis. What information do you give them? p&l?
20:48:33 Mike_Summey: I think Roger
has crapped out on us!
20:48:42 Doug_in_CT: Wouldn’t be the
first time.
20:48:42 MarkCT: I found a broker in
Austin who only deals with out of state investors and I found a great property
manager down there.
20:48:58 Al_Lee: They are not
non-qualifying, which means you have to go through the approval process. If you
are going to do that, you coudl just get a much better new loan at a lower rate.
20:49:12 Doug_in_CT: Did you fly down
there to look them over Mark?
20:49:38 bsalus: Mike, sounds like an
interesting book… are you still compiling the questions?
20:49:57 Mike_Summey: Bruce, I provide
my banks with a monthly statement that shows income, expenses, debt service,
deprectation & cash flow for each property I own plus consolidated monthly
and YTD numbers.
20:49:57 Al_Lee: bsalus, you are
writing the questions right now!
20:50:09 Kim-OH: Mike, I bet Roger’s
dial up crapped out on him lol
20:50:48 MarkCT: No I don’t. I have my
management company recommend properties that they would like to manage and have
an inspector go through it.
20:50:49 Al_Lee: Mike, you are coming
out with new books faster than I can keep up. Let’s do another radio interview!
20:50:50 Bruce: Mike, thanks, great
information. And you do that for all of your properties even if they don’t hold
the note, is that correct?
20:51:15 Gary: Mike, do you prepare
you P&Ls, or do you have an accountant do them for you?
20:51:27 Steve: I am going to have to
join the ranks of Roger and check out early too. Everyone have a good night…
20:51:27 Mike_Summey: bsalus, we have
archived all of the questions we have received in these chats, emails and on the
forums and that is waht formed the basis for the new book. We will be giving
more complete answers to each question in the book.
20:51:29 MarkCT: Mike and Al do you
own your properties all in one area or do you have some in different areas.
20:51:55 Al_Lee: Mark, mine are in
several metro areas, but all in Texas
20:52:09 Mike_Summey: Al, I’ll
definately want to do another show as soon as the Mindset book comes out.
20:52:17 Bruce: Al, Do you like the
San Antonio market?
20:54:00 Al_Lee: Bruce, these days I
think that if you can get a positive cash flow in any major Texas metro area,
buy it. The difficulty is in finding a tenant in many areas. Too many people
bought houses willy-nilly and then offered them for lease. That hurt the market
in 2004. Now I focus on only "turnkey" properties. They have a leas
and tenant already in place. I do not buy vacant properties now at any price.
20:54:00 MarkCT: Got to go. Dinners
ready. Talk with you soon Mike.
20:54:08 Mike_Summey: Bruce &
Gary, I prepare the financials myself as part of my hands on management of my
managers. The monthly statements are a by product of my management oversight. I
give all my banks a report on all properties regardless of whether they hold the
notes or not.
20:54:54 Mike_Summey: Goodnight Mark.
Talk with you tomorrow.
20:55:14 Gary: That’s definitely hands
on - I would imagine that minimizes potential for fraud considerably.
20:55:30 Al_Lee: There was a USA Today
article about real estate and it said that most parts of the country were
overpriced, but Texas was 11% under-priced.
20:55:36 Bruce: Al, is that because
the market is getting soft? Or too many wanna be investors?
20:56:08 Al_Lee: Bruce, too many
wanna-bes who follow poor advice and buy the wrong things.
20:56:08 Mike_Summey: Gary, I’ve
developed a system that works well for me. It takes me less than 2 days per
month to oversee hundreds of properties and prepare the financials.
20:56:13 Bruce: Al, when was the
article written?
20:56:18 Doug_in_CT: Mark and Al, Here
is an article I saw about Austin: Austin, TX: The board expects an 8 percent
increase in the median price of existing homes next year. That would mean
homebuyers would shell out an average of $182,500 for an existing home in 2005.
Economists predict the median home sales price in the Austin area to increase
and continue to rise in the next five years as the economy regains strength.
20:56:49 Gary: Mike - sounds good. I
hope to have a few properties to manage in the near future myself.
20:57:12 sermiex: Mike, do you plan to
offer software for your system (similar to the Toolkit)?
20:57:22 Bruce: Al, So I don’t buy the
wrongt thing, what are a few examples of the ‘wrong thing’
20:57:43 Mike_Summey: Doug, forget
about averages. If you put one foot in a bucket of boiling water and one foot in
a bucket of ice water, on average you would be comfortable.
20:57:53 Al_Lee: Bruce, I don;t know
the date. I learned of it frm a club member. RE: the Austin prices going up. I
beleive they will. the trick is to not have a vacant house while you are waiting
for that gain. Get positive cash flow while you are waiting. Then if the gain
takes longer than hoped for, so what?
20:58:28 Al_Lee: Bruce, any property
that will not leas for enough to give a positive cash flow is the wrong thing.
20:58:34 Mike_Summey: sermiex, we’re
working on several computer programs that you will see in the future.
20:58:58 Al_Lee: That is why I focus
on leased "turnkey" properties now. Thkes the guesswork out of it.
20:58:59 Kim-OH: wb Roger
20:59:00 Mike_Summey: Roger, we
thought you crapped out on us.
20:59:09 Al_Lee: Takes the guesswork
out of it.
20:59:22 Roger_Dawson: I’m back! I got
kicked off and it’s taken me this long to get back.
20:59:22 sermiex: Mike, I got the
tookit - there’s room for improvement
21:00:10 Mike_Summey: sermiex, I
agree, but it is about the best out there right now.
21:00:38 Doug_in_CT: Yeah. I will look
forward to more software products. I tried Quicken "Rental Property
Manager" and found it in the very early stages of development.
21:00:50 Mike_Summey: sermiex, the
calculators in the Toolkit make it worth the money.
21:00:55 Mike_Summey: Hi nisaf
21:01:00 Mike_Summey: B Shane
21:01:18 Shane: Hi Mike
21:01:29 nisaf: Hello Mike
21:01:41 Gary: I’ve enjoyed the chat
tonight. See everyone next Monday.
21:01:56 Mike_Summey: Goodnight Gary
21:02:00 nisaf: Mike, have you any
experience in Canada
21:02:03 Roger_Dawson: xx
21:02:08 Gary: Goodnight Mike.
21:02:18 Mike_Summey: nisaf,
unfortunately No
21:02:21 Al_Lee: Roger, to whom did
you blow kisses?
21:02:32 Penny: saying goodnight now
21:02:34 Doug_in_CT: Roger are you
kissing Gary goodnight?
21:02:37 Penny: odnight all
21:02:44 Mike_Summey: Night Penny
21:02:50 Penny: goodnight all
21:02:54 Al_Lee: Goodnight, Peny
21:03:01 Mike_Summey: Penny, you’ve
been vry quiet tonight
21:03:56 Mike_Summey: We’re still
working on the software program that will help you generate offers with little
effort.
21:04:03 Mike_Summey: Hi David &
Mark
21:04:14 Doug_in_CT: We got some very
good news on Saturday. My eighteen year old son has been offerred a cadetship at
WestPoint.
21:04:15 david_V: I figured I was
going to miss it.
21:04:16 MarkNC: Hi Mike, everybody
21:04:30 Al_Lee: Doug, that is a real
honor.
21:04:39 nisaf: Gentlemen, your
advice. I am in a market where the prices for all homes and multi-unit bldgs are
very high, while rents are declining. What’s the best strategy to look for.
21:04:40 Bruce: Mike, are you working
on software to help analyze return on investment? Cash flow etc.
21:04:53 Mike_Summey: Congratulations
Doug
21:05:05 Doug_in_CT: He has a college
fund, and now that he won’t have to use it he is interested in investing in Real
Estate.
21:05:14 Mike_Summey: Bruce, Yes
21:05:17 Bruce: Doug, congrat’s.
21:05:41 Bruce: Mike, when will it be
released?
21:05:50 Al_Lee: nisaf, why don;t you
go to my website and take a look. I think I have solved that problem.
http://wwwTurnkeyInvestments.net or http://www.RentHouses.org
21:06:18 Mike_Summey: Doug, my
youngest son signed with the army rotc to fly Apache helicopters. He got his
last two years of college paid for, so I have the same situation.
21:06:52 Doug_in_CT: I could see him
coming out of his four years of training at WestPoint and his five years of
service and his real esate have grown nicely while he was away.
21:06:56 Mike_Summey: Bruce, Hopefully
by the time the FAQ book is ready for release. They may come together.
21:07:14 MarkNC: Mike, don’t you have
a son that plays football at Furman or am I confusing you with someone else?
21:07:16 Bruce: Mike, good, I need the
help.
21:07:29 Mike_Summey: Mark, that’s
him.
21:07:48 Doug_in_CT: I hear Furman is
a good school.
21:08:20 MarkNC: Is he still playing?
21:08:33 Mike_Summey: He is not
playing football anymore. He gave it up for the military. That was his decision.
Not what I would have preferred, but I support him.
21:08:51 Mike_Summey: He went to
Furman to play quarterback.
21:09:27 Bruce: I think Roger’s had a
rough night
21:09:30 MarkNC: I was going to say if
he played at App we would have to get together.
21:09:45 Mike_Summey: Furman got Ingle
Martin from the University of Florida and that moved veryone back several
notches so Matt decided to paly army instead.
21:10:12 MarkNC: Makes sense.
21:10:18 Doug_in_CT: So Mike, if you
wanted to invest in real estate with an 8 year time horizon would you look at
sfr, Multis or Comercial?
21:10:34 Mike_Summey: We have had Mark
in NC, CT & NO tonight. Popular name.
21:11:11 Mike_Summey: Good question
Doug, but why 8 yr?
21:11:19 MarkNC: Although in the army
they play with real bullets. I am just everywhere tonight, unfortunately can’t
get an offer accepted anywhere.
21:11:46 Mike_Summey: mark, it took me
a year to get my first offer accepted.
21:11:49 Bruce: Al, Mike, Do you still
try to cash flow on your deals if you put down 5%? Or do you put down more money
to cash flow?
21:11:52 Doug_in_CT: I am thinking
about my son’s situation, Having some money to invest and this type of time
horizon.
21:12:43 MarkNC: Well, I have had two
and thought I was getting the hang of this. I think now it is springtime and
everyone thinks too much of there property.
21:12:44 Al_Lee: Cash Flow is king!
Negative cash flow will restrict your ability to borrow more to buy more
properties. It will also get really old really fast!
21:13:10 Mike_Summey: Bruce, a
property that cash flows, does so no matter what you put down. You have to get a
return on your down payment or it doestn’t cash flow.
21:13:26 Jeff:FestusMO: Hello all.
Sorry I’m late (again)
21:13:45 Mike_Summey: Hi Jeff
21:14:01 MarkNC: I had someone trying
to convince me today what a steal tehy were giving me on a duplex with negative
cash flow on the existing tenants. I don’t need steals like that.
21:14:02 Jeff:FestusMO: My wife and
made our first offer this weekend.
21:14:12 Doug_in_CT: It is Missouri
Time, you have to show me.
21:14:18 Mike_Summey: Great Jeff.
21:14:21 MarkNC: Congrats Jeff.
21:14:35 Doug_in_CT: Good going Jeff,
the first one is the hardest one.
21:14:41 Shane: I agree with Mike, You
should be able to have positive cash flow whether you put 5% down or nothing
down
21:14:43 Jeff:FestusMO: We haven’t
heard back yet. We asked for seller financing of direct principal payments just
like the book said. The house is owned free and clear.
21:14:51 Al_Lee: Mark, there was a
"steal" goin gon, but it wasn’t what they were promoting.
21:15:17 Bruce: Mike, in your book you
discuss doubling your money. 1 dollar to 2 dollars etc. Is it realistic to cash
flow 2,500 year one, 5,000 year 2, 10,000 year 3 etc. with apx. 100K in cash?
21:15:27 Mike_Summey: Jeff, don’t be
discouraged if the offer is not accepted. Just before you signed on, I said that
it took me a year to get my first offer accepted.
21:15:52 Jeff:FestusMO: We won’t be.
I’m expecting to go quite awhile before my first one is accepted. I’m excited to
have made my first offer though.
21:16:13 Jeff:FestusMO: We looked at
two others and are prepared to make offers on one of them as well if this one
falls through.
21:16:24 Bruce: Jeff, congratulations
on the first offer.
21:16:33 Mike_Summey: Bruce, this may
be hard to believe, but I showed a better that 100% per year return compounded
for the first 20 years I was investing.
21:16:39 Jeff:FestusMO: I spent lots
of time at each house filling out the inspection form and taking lots of notes.
21:17:14 Jeff:FestusMO: Thanks you all
for all of the kind regards.
21:17:27 Mike_Summey: Jeff, to more
you do it the easier it will become. What used to take me half a day to do I can
now do in 30 min.
21:17:59 Bruce: Mike, that’s why
you’re writing the books and I’m not.
21:18:14 Al_Lee: Well, I’ve got to get
packed for my trip in the morning.
21:18:16 Jeff:FestusMO: I like the
idea in the book to use a letter of intent. While I didn’t use it this time, I
think it can provide some additional flexibility if you don’t have a lot of
information about the sellers.
21:18:36 Mike_Summey: For you late
comers, next week will be an interesting chat. I have an expert in self directed
iras and 401(k)s joining me for the chat.
21:18:36 Al_Lee: I will try to join in
as many of these as I can. they are really fin to do.
21:18:54 Al_Lee: Goodnight, Mike,
everyone.
21:19:03 Jeff:FestusMO: That’s great.
I have a sep-ira and was wondering if I ought to consider using the funds I
invest to buy rental homes.
21:19:06 Bruce: Al, goodnight
21:19:08 Doug_in_CT: See ya soon Al.
21:19:09 Mike_Summey: Al, thanks for
joining us. You are always welcome and we learn a lot from you.
21:19:22 Shane: Good night Al
21:19:54 Doug_in_CT: Who is the
exprect in Self Directed ira’s?
21:20:05 Mike_Summey: I’m going to
have to go as well. Tonight has been an interesting chat. Each week we seem to
get into different subjects, which is great.
21:20:22 Jeff:FestusMO: Have a great
night all. I’ll see everyone next week.
21:20:25 Mike_Summey: doug, you’ll get
an email with his credentials later this week.
21:20:32 Ralph_Roberts: The chat
transcript will be posted shortly.
21:20:35 Mike_Summey: goodnight all
21:20:38 sermiex: I have to leave also
- Goog night all - Another great chat
21:20:40 Jeff:FestusMO: Goodnight
21:20:40 Mike_Summey: ee you next
week.
21:20:42 Bruce: Mike, I assume reading
your book shows us how to be over 100% per year return compounded for the first
20 years. What was the number 1 reason for your success?
21:20:47 Doug_in_CT: sounds great. I
will look forward to it. Thanks again Mike.
21:20:47 Ralph_Roberts: good night
all!
21:20:52 Shane: Good Night everyone
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