Chat 8-8-05
Posted on August 8, 2005
jmorgan: Maybe I can get the first ? tonite. Are there definite
limitations on seller concessions. I thought I had a deal that might give me
some cash at closing. But lender limited concessions to 2% of sales price. Is
this arbitrary on part of this lender or an industry standard?
jmorgan: Here’s another ? since Idon’t have any competition yet. In a
multi-family property (2 family), what are your thoughts on a single heating
unit? Any suggestions for dealing with this in the rental agreements?
pjalan: hi
Peter: Hello
Peter: is someone out there?
Peter: Hi Ralph
Ralph_Roberts: hi guys
Peter: How are you today
Peter: Hi Mike
Ralph_Roberts: fine…. hey, there’s Mike Summey
Mike_Summey: Hello everyone
Mike_Summey: Hi baumie
baumie: Hi, Mike
Mike_Summey: Roger just called me and advised that he is running about
10-15 late tonight. He asked me to express his regret.
Peter: is there any specific topic of discussion today
Mike_Summey: Peter, anything you want to discuss.
Mike_Summey: Clair
Peter: Loans
Clair-MO: Hello folks
Ralph_Roberts: hi Clair
jmorgan: I posted a couple early questions - any thoughts?
Peter: and Home owner insurance
Mike_Summey: jmorgan, I didn’t see them. They must have been posted
before I joined.
Peter: how can a investor continue to get good interest rates?
Mike_Summey: Peter, interest rates are rising for everyone.
Peter: I beleive as one buys more and more the rate he get keep going up
Ralph_Roberts: hi Kim!
Mike_Summey: i Kim
Clair-MO: Hi Kim
Mike_Summey: Hi Jacquie
Kim-OH: Hi Ralph and Mike!!!
Jacquie: Hi, Mike
Kim-OH: Clair, long time no see, how are you
Ralph_Roberts: crowd’s starting to stream in
Mike_Summey: Hi Al
Kim-OH: Jacquie where are you located?
Ralph_Roberts: Big Al!
Peter: should a investor obtain a umbrella loan
Kim-OH: Hi Al
Jacquie: I’m in MS
Peter: or something like that
Clair-MO: Doing good as expected Kim
Mike_Summey: How’s the wife?
Al_Lee: Hi , folks. Good to be here again.
reena_ny: Greetings folks.
Peter: hello all
Mike_Summey: Hi Reena
Kim-OH: Clair meaning what, what’s going on with you?
Kim-OH: Hi Peter
Peter: Hi Kim
Kim-OH: Mike it was great having Garrett here last week thanks for
arranging it
Al_Lee: Thanks for asking, Mike. She is home from the surgery and
recuperating. It is amazing what modern medicine can do.
Mike_Summey: jmorgan, can you ask your question again?
jmorgan: One ? has to do with a multi-family property (2 family) and a
single heating unit. Any thoughts? Also any thoughts about dealing with this
through the rental agreements.
Clair-MO: Recovering from a serious car accident where I have injured my
back.
Peter: did any one setup an LLC yet
Kim-OH: Al, that is great news!!!
Jacquie: Mike, I have a few questions about your ROI calculations in your
book
Al_Lee: Thanks, Kim.
Mike_Summey: That’s great Al. Give her my regards.
Al_Lee: I will , Mike/
Kim-OH: Clair sorry to hear about the accident
reena_ny: Hi Mike. Last week’s chat was very informative. I have a
clarification on the discussion. YOu have mentioned that you get a cash
distribution from your property, and not a salary. How do you set it up?
Kim-OH: Hi Hal and Fred
Peter: I am still to setup LLC for my home closing next month
Mike_Summey: jmorgan, when I have shared utilities, I usually charge a
flat fee to each tenant with an adjustment after 6 months if the fees paid are
not high enough.
Peter: did anyone use website to setup llc?
Mike_Summey: reena, I write myself a check from the rental account.
Mike_Summey: Hi hal
hal: hi mike
Kim-OH: Hi Paul
Kim-OH: Hi mayorad
mayorad: Howdy, all.
Mike_Summey: Hi mayorad
Paul_CA: Hi Kim. Hello Mike and others.
Mike_Summey: Hi Paul
Paul_CA: Hi Al.
mayorad: Hello, Kim; hello, Mike - nice to "see" you both.
reena_ny: How do you calculate theamount of cash distribution? Is it a
percentage, or any amount is ok?
Al_Lee: btw, Mike. I passed on your comments regarding callinin to my
show and the station seems to have fixed whatever the problem was. Let’s plan to
do an interview soon.
Mike_Summey: Garrett was very informative last week wasn’t he?
Mike_Summey: I’d love to AL.
reena_ny: Yes he was very informative.
mayorad: Sure was, Mike.
Fred: Mike, how did you get the money to do your first deal
Kim-OH: Garrett was teriffic thanks for setting that up Mike
mayorad: Glad you were able to bring him aboard.
Mike_Summey: Next weeks guest will be a real treat also.
Kim-OH: Mike who is coming next week?
jmorgan: 2nd ?. Are there definite limitations on seller concessions. I
thought I had a deal that would give me cash at closing, but bank now says
concessions are limited to 2% of sales price. Iss this arbitrary on part of this
lender or is this an industry standard?
Al_Lee: You are writing books so fast that we might need to scheduel a
few interviews now over the next year. You could announce each new book.
Jacquie: I am still very much a rookie at this mortgage financing stuff.
Can someone answer some questions about ROI for me?
Mike_Summey: Fred, I did my first deal with %600. But that was before the
due on sale clause was added to loans.
Mike_Summey: Ask them Jacquie
Al_Lee: Jacquie, I have a free spreadsheet that computes ROI for one year
and for 30 years. If you want it, I;ll give you a link to download it.
Kim-OH: Mike who is the visitor for next week? Please tell us, pretty
please!!! LOL
Fred: ok I see thanks
Mike_Summey: jmorgan, I’ve never heard of a lender setting a limit on
seller concessions. How does the lender even know unless you tell them.
Kim-OH: Hi Penny!!!
mayorad: Mike, quick question: a "transcript" of this chat is
available at the end, correct? If so, where can it be obtained?
Jacquie: I thought ROI changed based on the portion of NOI paid by cash (noi
remaining after mortgage calculations), not principle reduction.
Mike_Summey: Hi Penny
Penny: Hi Kim, Hi Mike and everyone.
Mike_Summey: mayorad, the transcript will be posted on the website within
minutes fo the chat being over.
Kim-OH: Ralph is very quick with the transcripts
mayorad: Great! Thanks! btw, I look forward to getting a copy of your 3rd
book there. Think it might surpass Harry Potter sales? 
Ralph_Roberts: Fast Ralph they calls me
jmorgan: Concessions were put into the contract - $10,000 for closing
costs and $6,000 for repalcement of boiler. I thought this would protect me -
rather than doing a "side deal " with seller.
Mike_Summey: Jacquie, NOI and ROI are different. NOI is the income a
property will produce after expenses. ROI is the return on investment …
usually thought of as the return you get on the cash you put into a deal.
Al_Lee: Jacquie, I compute three components of returns from rental
properties: cash-on-cash roi, debt reduction, and appreciation. Using differnt
financing options can shift money from one bucket to another, but leave the
total return about the same.
Peter: Hi Bob
Kim-OH: Hi Bob
Mike_Summey: jmorgan, it depends on how these were written. If the
contract is for a set amount after the seller replaces the boiler and spells out
what closing costs the seller will pay. there shouldn’t be a problem.
Mike_Summey: Hi Bob
Bob_Carr: Hi everyone
Ralph_Roberts: Hi Penny, did not see you come in.
Mike_Summey: Kim, our guest next week will be the president of a private
mortgage brokerage firm. Very sharp guy!
Penny: Hi Ralph
Penny: I slid in quietly.
Kim-OH: Mike that sounds exciting, thank you very much for setting that
up as well
Kim-OH: Hi tricolorro
Peter: I look fwd to next chat….thanks Mike for seeting that up
Jacquie: I’m just confused about how you can get a 21% ROI when your
morgage payment alone is more than the noi.
Mike_Summey: I keep trying to bring people who know more than Roger and I
do about different aspects of real estate investing.
Kim-OH: Mike that’s how we all learn, right?
Peter: I am very much interested to learn abt mortgage internals and
insurance
Al_Lee: Jacquie, I woeu lbe confused about that too. In my computation
that gies you a negative roi.
Peter: I just locked in loan for my home
Jacquie: Exactly. In Mike’s book, he has an example in Ch. 24 of a
purchase of $120,000 with 90/10 financing at 6%
Mike_Summey: Jacquie, if the ROI on your cash is used to cover part of
the principal portion of the loan payment, a deal can still sork even though you
may not have any extra cash flow in the beginning. If you are using the return
on your cash investment to retire debt its sort of like taking money out of one
pocket and putting in in another.
Mike_Summey: Hi PUP
Jacquie: He says that the interest for the first year with payments of
$911.36 is $540/ mo or $6480/ yr
PUP123: Hi Mike, Hi Everyone
Mike_Summey: Jacquie, where’d you get the $911.36?
Jacquie: $108,000 at 6% for 15 yrs
Jacquie: Did I calculate that wrong?
Roger_Dawson: Hi Folks! sorry to be late!
Mike_Summey: In that scenario, you have to use a longer amortization to
make the numbers work.
Mike_Summey: There’s Roger Dawson
Mike_Summey: Jacquie, try it at 25 or 30 years.
Jacquie: At 30 years at 6% the mortgage payment would be $647.52, which
doesn’t leave much NOI for a 21% ROI
EDDIE: Mike, do you have any suggestions regarding insurance in eastern
NC. I have a brother-inlaw up around Charlotte and his rates are almost half of
what I’m paying. They say it’s because of the Hurricane line which runs with
I-95
Mike_Summey: Jacquie, when you have a set amount you can make as a
payment, you have to adjust either the amount of the loan, the interest rate or
the length of the loan to stay within the amount with which you have to work.
Mike_Summey: Hi Eddie, I didn’t see you come in. sorry.
EDDIE: No problem
Mike_Summey: Eddie, he’s correct about the hurricane line. Rates are
higher in hurricane prone areas. Not much you can do about that.
Kim-OH: Hi Roger
Peter: Hi Roger
Jacquie: When you adjust one of those things, here I’m adjusting the
length of the loan, the return changes too
EDDIE: Yea, it’s killing me. We are right on that line and have had very
few Hurricanes in this general area
Roger_Dawson: Hi Kim!! Hope you’re feeling well.
Paul_CA: Al, how’s everything in TX?
Kim-OH: Roger thanks, I’m feeling quite well under the circumstances and
waiting for a call from my agent
Roger_Dawson: When I shop around for insurance, I’m amazed at the
difference in price. Some companies are double others, and they stay in
business. It has to do with the rules each company has for assessing risk.
Al_Lee: Roger: you will be happy to know that I have now had my oil
changed again thanks to our conversation.
Mike_Summey: Jacquie, at that payment, you would have the 21% roi, but
you would be using part of it to retire principal on the loan. I know that’s
confusing, but if you will think about it, if a property earns you $5000 in a
year and you take that $5000 and pay down the loan, you still earned the $5000,
you just didn’t spend it on something else.
Jacquie: For a 15 and 20 year loan, I’m getting a negative roi. For a 25
yr loan, I get a 5.4% ROI and for a 30 year, I get a 10.2 % roi.
Mike_Summey: Hi Doug
Al_Lee: Paul, things are great in Texas.
Roger_Dawson: Al, that the biggest transformation since Saul was on the
road to Damascus!
Doug_in_CT: HI Mike. Any recommendations on a low cost Insurance provider
you like Roger?
Mike_Summey: Al, do they have trantula, scorpion and rattlesnake
insurance riders?
Al_Lee: Interest rates are still unnaturally low, peoperty tax refom is
in the air to reduce all our taxes, insurance rates have been going down for two
years now. Great!
Jacquie: You’re figuring the ROI based on the interest paid during the
first year?
Mike_Summey: I use Nationwide Insurance for all my properties. I have
found them to be better than any other quote I have gotten.
Al_Lee: Mike, no , but I did have one hosue that required flood
insurance. I griped abot the $300/year premiums until the crrek came up and I
collected $65,000
Doug_in_CT: Thanks, I think I have to get Nationwide on my side.
Roger_Dawson: Doug, there’s no one that is lower than others across the
country. They just rate different areas differently.
Doug_in_CT: I am really excited about the "small rental
increases" that I have implemented this week and last. It is very
empowering.
Paul_CA: Speaking of insurance, does anyone have suggestions for or
against an "umbrella policy" for their properties. I’m afraid if I
ever have to make a claim, it will affect premiums across the board?
Mike_Summey: I believe my agent is the largest Nationwide agent in the
country. Would you like for me to invite him to one of our chats to discuss
insurance?
Roger_Dawson: Al: is that where the expression started "If the crick
don’t rise?" I always thought it referred to the Crick Indians.
Doug_in_CT: Yeah. Good idea Mike. We could get to the bottom of why the
big fluxuations that Roger mentions.
EDDIE: Yes
Mike_Summey: Hi kubits
Paul_CA: Mike: Yes, that would be great.
kubits: Hello
Al_Lee: Roger, yes, I guess it could be the Creek Indians, but this was
Wilson Creek, a normally tame little concuit for rain water.
Mike_Summey: Paul, I have all of my properties covered under a large
blanket policy. I’ve had several storm related claims this past year and it has
not affected premiums.
Mike_Summey: Where are you from kubits?
Peter: yes Mike it would be great to invite to your agent
Mike_Summey: I’ll see if I can get him in a chat later this month.
EDDIE: I went by a Nationwide agency and left my property info for a
quote, but he never got back in touch or returned my calls.
Paul_CA: thanks Mike.. I’ve just heard horror stories from a few
homeowners about making claims against their homeowner’s policies.
Mike_Summey: Eddie, go to another agent, one who wants your business.
kubits: From NC
EDDIE: gotcha
Peter: Mike….HOA and HOB policies are they only texas related?
Mike_Summey: Peter, I’m not familiar with those terms.
Peter: which one should one take….and I heard investor homes should
have a different kind of Homeowner policy then owner occupied is that correct?
Bob_Carr: Great idea Mike
Roger_Dawson: I had a water claim damage once. I walked the adjustor
through the property and kept asking "would this be covered?" I was
amazed how this little claim got up to $13000. As the said goodby he smiled and
said, "I read this negotiating book once, where it said you should never
make demands because it sets up confrontation. Just keep asking for things. He
was talking about my book. I had no idea he knew who I was.
Al_Lee: Peter, I think those are home owner’s tyep A and B policies.
Theya re not appropriate for rental properties. There were different policies
called tdp-1 thru -3 for Texas Dwelling Policy, but they have now been replaced
by a newer policy I am not familiar with
Mike_Summey: Peter, you do not need a homeowners policy for investment
properties. All you need is fire and extended risk coverage. You don’t have
contents to insure like you do in a home where you live.
Kim-OH: Hi Dwayne
Kim-OH: Nice to see you again
Mike_Summey: Hi Dwayne.
Dwayne_Wiseman: Hello Mike and Kim.
Peter: so that policy will be cheaper I beleive then a home owner policy
Al_Lee: Peter, that is right
Peter: Al tdp-1 to 3 which one should one take
Roger_Dawson: Much cheaper
Mike_Summey: You never know who’s going to show up in our chats. Dwayne
is president of Blud Ridge Bank and has been our guest before. Thanks for the
surprise visit Dwayne.
Peter: Hi Dwayne
reena_ny: Mike/Roger, Do you recommend that the renter get fire insurance
as part of content/renter’s insurance?
Dwayne_Wiseman: My pleasure.
Mike_Summey: reena, renters should get coverage to cover their belongings
or they will be at risk. My insurance does not cover anything belonging to the
tenant.
Roger_Dawson: I wouldn’t require them to. I think they should save their
money for future rent increases.
reena_ny: What about fire insurance for the structure?
Al_Lee: Peter, I have dozens of properties adn my policy is to buy the
cheapest insurnace I can find. I don;t make trivial claims, so I buy a 1%
deductible on the casualty to keep the cost low. It is foolish to buy expensive
insurance because you will feel you must make claims fo revery little thing to
make up for the high premiums. Making claims will increase your premiums even
more.
Mike_Summey: Dwayne, we’re going to have John Isgrig join us next week to
discuss mortgage brokerage services. Want to join in too?
Al_Lee: Insurance should be for major losses only
Roger_Dawson: Reena, the owner is required to carry fire insurance by the
lender.
Peter: Al any recommendations on cheap insurance for texas
reena_ny: Thanks Roger/Mike.
Dwayne_Wiseman: I’ll be glad to chime in. John will be an excellent
guest.
Doug_in_CT: I have an opportunity to provide a higher end rental. My
client is looking for a house about $350,000 and they will pay a very healthy
rental rate (like $3,500/mo.) I remembert that the "Weekend
Millionaire" book says to say in the middle of property values. Well the
location of this house –this would be the middle. Anything else I should be
warry of here? Aren’t I leveraging a bigger lever if I buy with 10% down?
Mike_Summey: In North Carolina, I don’t believe homeowners insurance
rates are effected by individual claims. A rate increas must apply across the
board or it is not valid.
Al_Lee: Peter, some of our club members have gotten good rates from
Allstate. Some from Farmers. I use a commercial business policy for all my
properties and the entire rate structure is different, but it is cheaper than
individual policies would be.
Peter: Al..so commercial business policy means u have an umbrella policy
Mike_Summey: Doug, who will you rent to after this tenant moves?
Jacquie: Mike, if the NOI from a property is $750 and a 30 year morgage
alone will cost $647, that only leaves $102 for a cash ROI on $12,000. I don’t
understand how you can get a 21% ROI when there
reena_ny: Doug, How do find a renter before buying a property for rental?
EDDIE: What would be the reccommended deductible for North Carolina
Jacquie: there’s no extra NOI after the mortgage to apply to the
principle
Peter: Hi Larry
Mike_Summey: Hi Larry
Roger_Dawson: Doug, the big problem with that kind of renter is that if
they can afford $3500 a month, they can afford to buy and probably will.
Al_Lee: That is wha you coudl call it. It is one large p[olicy with a
scheduel of properties. When I buy a new proeprty, it is added to the schedule
and I get billed the appropriate permium. Actually, I like escrowed mortgages,
so the mortgage company gets billed.
Larry: Good evening, Sorry i’m late
Peter: Yes I also included my policy to be escrowed
Doug_in_CT: Mike, this client wants a four year lease. So I feel
comfortable that in the worst case scearnio — and they move out in four years
– that by that time I will have an excellent profit in the property as well as
getting something like 20% ROI on my downpayment money each year.
Mike_Summey: Jacquie, part of the $647 payment is principal. If that part
of the payment is made with some of the ROI on your $12,000 down payment, you
still are getting the roi, you’re just using part of it to pay principal.
Roger_Dawson: Nothing wrong with paying insurance annually but it takes
some financial discipline to set aside the money.
Peter: Here is another question…can I get a TDC policy for home in
which I live (owner occupied)?
Roger_Dawson: Doug, I can’t see a whole lot wrong with that deal.
Al_Lee: I was getting non-escrowed loans for a while and when I reached
the point where I had to come up with $40k every January for taxes, plus
something more for insurance premiums, I decided the hassle was not worth the
small savings.
Mike_Summey: Doug, if you’re comfortable, do it.
Peter: yes I too thought that way….you loose some interest during the
year…but hassle might be not worth the savings
Peter: Al can you pls answer my question…can I get TDC policy for owner
occupied home
Doug_in_CT: Reena I have found there are many agencies who would like to
find rentals. I recommend seeking out such agencies to find your renter before
you find your house.
Al_Lee: Peter, I think you can, but you will not have coverage for your
posessions in the house.
Al_Lee: Peter, the difference in premiums is not a lot of money, either.
Peter: yup but my policy will be lot cheaper though right
Al_Lee: Not much
Peter: I can’t have hoa/hob for tenant occupied property right?
Al_Lee: Peter, where are you in Texas?
Peter: I am planning to move in future…I am in CA
Peter: where are you Al
Al_Lee: Peter, that is correct. You can not get home owners insurance for
a tenant-occupied property because you wouel be insuring HIS stuff
reena_ny: Thanks Doug. Will any real estate agency provide renter
information?
Peter: thanks Al
Mike_Summey: Al, you just need a little something called discipline. Set
up your own escrow account and each month pay into it just like you are doing
now. You control the money, you get the interest and you know when things are
paid. I used to escrow taxes and insurance, but I found the baks weren’t
reliable to pay timely so I do it myself.
Mike_Summey: Hi blueskies
Doug_in_CT: Reena, I believe they will. My real estate agent referred me
to an agency and we have bought four homes for them.
Al_Lee: Peter, I am in Dallas. my website is www.RentHouses.org. I only
buy properties in Texas because of the favorable laws and tax benefits
Mike_Summey: Hi ryan
Roger_Dawson: I give up. What’s a TDC policy? Google doesn’t know either.
Peter: Hi Mike….some mortgage company asks for fees if you dont want to
escrow your T & I
Peter: Good to Know Al…will look up your houses
Al_Lee: Roger, Texas Dwelling Policy–and I think it is extinct. Replaced
by soemthing new
Peter: which areas in Texas do you invest
Al_Lee: Peter, mostly Dallas/Fort Worth metroplex, but also elsewhere
Peter: I bought my first property in texas at Austin (Kyle)
Mike_Summey: Peter, I understand. I had to live with that when I was
getting started, but now I just tell them if they want my business they’ll have
to do it my way.
Peter: I have been hearing good things abt Ft worth
Mike_Summey: Dwanye, tell them about my way. I don’t thinks the banks
worry too much do they?
reena_ny: Good night everyone. Thanks for a very informative chat. Kim I
hope you are feeling better.
Mike_Summey: goodnight reena
reena_ny: bye
Dwayne_Wiseman: No they do not.
Peter: Yes Mike….I will try to see if my broker allows it…I just
locked my interest rates….and told him I want to escrow my T & I
Al_Lee: Peter, the entire d/fw area, including all the surrounding towns,
is great for investors. I have bought brand new hosues from Pulte, Centex, DR
Horton, etc. and leased them at positive cash flow after all expenses and debt
servicing.
Peter: wow…for how much can I buy a brand new house in the Ft worth
area
Peter: Al…do you manage your own properties
Mike_Summey: Next week should be a very informative chat. If Dwayne joins
us we will have a private mortgage broker and a bank president both in the chat.
Dwayne_Wiseman: Mike, the real estate market in Asheville continues to
remain strong. There seems to be good appreciation even in lower to middle
income houses. Are you seeing the same thing in the Asheville market.
Jacquie: Mike, I know you probably feel like I’m beating a dead horse but
I want to understand this. You’re saying that if I pocketed the $102 NOI
remaining after a $647 payment, then I would have a 10% ROI on my $12,000 cash
down. But if I applied that $102 to the principle, then my ROI would jump to
21%?
Al_Lee: Peter, no. I have a strategic partner that is a proeprty
management company and they manage all of my d/fw propertis. I have soem
elsewhere that are managed by other property management companies
Doug_in_CT: Now what is the difference been a "private mortgage
broker" and a regular mortgage broker?
Peter: thats a good thing to do so tht you can focus on your investments
Mike_Summey: Dwayne, the rental market has really firmed up over the past
3-5 months after a couple of years of being soft. Things are booming now.
Al_Lee: Peter, my rule is: be an investor, not a landlord
Peter: Al…I cant agree with you less
Larry: Al, Can you buy new homes at a discount from the major builders?
Dwayne_Wiseman: That is what I am seeing in the market.
Peter: Al…do you use a real estate agent for buying homes
Al_Lee: Peter, I have a recorded 1-hour radio show in which I interview
the owner of my property management company. Yo u can listen to it free from my
website
Peter: or the builder passes on agents 6% commission to you as discount
Peter: let me try to find out on your website
Mike_Summey: Doug, a private mortgage broker is one who owns his own firm
and is not part of a banks mortgage brokerage arm.
Dwayne_Wiseman: Doug, I would same they are one in the same.
Al_Lee: Peter, I almost always do use a real estate agent. i have several
"trained" to find me what I am looking for–postive cash flow
Penny: Goodnight all. Lots of good info tonight, as usual. Ralph, I look
forward to transcripts. Chats move so fast sometimes I always miss something.
Penny: Goodnight.
Ralph_Roberts: good nite, Penny!
Mike_Summey: Goodnight Penny
Roger_Dawson: Good night Penny
Peter: Al do you get good discount from the builders…actually I am
doing exactly what you do…only thing is that I just started and bought my
first home in Austin…I have a prop manager there who will manage it for
me…Its good to see another investor with exactly same philosophy
Paul_CA: Gotta run… see you all next week. Goodnight.
Roger_Dawson: Peter, did you mean to say that you couldn’t agreed with Al
less? That you like to manage properties?
Mike_Summey: Goodnight Paul
Al_Lee: Peter, one of my policies is to let other people make money while
they are making me money. I think Mike will agree with that, too. Don’t try to
squeeze every penny out of the people who are helping you. they will not want to
help you again.
Peter: Al do I need a tortoise club number to download stuff
Peter: Yes I totally agree with that Al
Peter: Al and you need a team for the long run…one cant do it all alone
Kim-OH: Goodnight all see you next week
Al_Lee: Peter, for soem stuff you do, but there is a lot you can get
without needng a member number. A lot of radio shows, including some with Mike,
and a lot of articles. There is also a really good spreadsheet for computing ROI
that you can download free. Go to www.TurnkeyInvestments.net and click
"Spreadsheet Help" and read the instructions. That is another of my
websites.
Peter: Roger I meant I like prop managers to manage my property
Roger_Dawson: Good night Kim. God bless.
Peter: so that I can spend my time on other usefull stuff
Roger_Dawson: Peter, good that’s our philosophy too.
Peter: Great thanks Al for that link…let me look it up
Al_Lee: Peter, I think you coudl spend many days reading and listening,
but it wil be worth the time.
Mike_Summey: Peter, I have a builder here who is planning to build a
development of about 300 homes. I have told him that I will buy up to 20 houses
at about 80% of what he is selling them for at retail. that way he can start
building and offer the houses for sale while they are being build but will know
he can turn any that don’t sell during construction so he can keep his crews
working and not have to worry about getting too much money tied up is spec
houses.
Ralph_Roberts: hey, Doug
Larry: Al, I have been building my own rentals for a few years now but do
you get a discount from the big builders?
Peter: Mike..Thats a nice Deal…I am sure you must be upbeat about that
area
Doug_in_CT: Hey Ralph, I need to move to another computer downstairs as
the natives were restless upstairs.
Mike_Summey: kubits, you’re being awful quiet there. Any questions or are
you just observing?
Peter: Larry….yes do get discounts from big builders
kubits: Just observing currently
Al_Lee: Larry, when I buyform big builders, I often buy several (a
dozen?) hosues at a time and I do get a discount, like Mike described.
Peter: I got discount from DR Horton…at that time I was looking at
Pulte and Centex were offering discounts
Mike_Summey: kubits, feel free to jump in any time. We want you to feel
welcome.
Peter: Al how long have you been investing?
kubits: Thanks, just getting my feet wet
Larry: are you putting cash in deal or buying with enough equity to get
100% financing?
Peter: I had to come up with 10% for my first property (new home)
preconstruction..? I cant think of buying dozen unless I sell a few houses which
have appreciatede a lot
Mike_Summey: Peter, on a deal like I described, I am the buyer of last
resort for the builder, but I give him the security of knowing he won’t get
stuck holding several houses if the market softens.
Bob_Carr: I didnt think Pulte or Horton would offer discounts
Al_Lee: Peter, since 1974. I retired at age 54 in 1999 to live on my
rental income–live comfortably, too. I got bored after a few months ans started
looking for something to do. I ended up writing a book about RE investing, then
doing seminars, a radio program, and starting an investor club.
Peter: I did get discount with Horton…normally they dont but as Al and
Mike said….either buy in bulk or buy as part of a group that buys in Bulk
Peter: Al can you please tell me the name of your book I would like to
read it
Al_Lee: I am flying to San Francisco on Tuesday, August 9, to do a 3-hour
seminar at athat Crowne Plaza for the Learning Annex. If you are in the area,
why not register?
Peter: yes I am in that area?
Mike_Summey: Peter, Al’s book is a good common sense book. I’ve read it.
Peter: what is the name Mike?
Mike_Summey: Give him the correct name Al. I’ll get it wrong.
Al_Lee: Peter, go to www.myRentProperty.com and you can buy it online, or
use the toll-free number to order it. It is "Income for Life-from Real
Estate : How the Tortoise Got Rich" It is also on Amazon.
PUP123: Thanks Mike and Roger, good info - gotta go for now. Goodnight.
Mike_Summey: Goodnight PUP
Peter: Great thank Al..I will order that book
Larry: Mike, Speaking of books, I was a grit newspaper boy in the 1960’s
Peter: is the LAnnex seminar on Friday
Mike_Summey: A lot of good information in tonight’s chat, eh?
Peter: Mike and Al…I am new investor does my philosophies sound right
to you?
kubits: Gotta go, thanks.
Mike_Summey: Larry, I think that paper got a lot of young entrepreneurs
started.
Al_Lee: Peter, i think you shoudl read my book and Mike and Roger’s first
book to compare. We agree on about 90% and have slightly different approaches on
about 10%. The importatn thing is we are both right–we have both been
succesful. It is a matter of your taste which variations you prefer.
Doug_in_CT: Apparenetly those "True Grit" boys learned some
valable lessons.
Mike_Summey: Goodnight kubits
Larry: I thoufght you would get a laugh out of that.
Mike_Summey: Peter, you’re on the right track.
Jacquie: Thanks for the help Mike. I need to run.
Peter: Al I read both of Mikes and Rogers book
Mike_Summey: Goodnight Jacquie. See you next week.
Roger_Dawson: Al, are you going to be in LA also? We should get together.
Peter: I like most of Mikes approach but I cant find good deals as I work
full time
Doug_in_CT: Do you work on Saturday’s Peter?
Peter: so they I want to go is buy new pre construction homes with
discount in suburbs which growing and will cash flow?
Roger_Dawson: Peter, the entire philosophy of the Weekend Millionaire is
that you can do it in your spare time.
Peter: nope Saturday and Sunday is off
Al_Lee: Peter, one thing Mike and I have said in front of an entire radio
audience is that neither of us thinks he knew everything about investing in real
estate when we started–adn we still don’t. You have to learn enough to get
started, then "just do it". the folks who coe to my seminar for the
third time to hear the same information will never succeed. they suffer from
analysis paralysis. You have to do it to get any benefit.
Doug_in_CT: Can you spare four hours on Saturday Peter?
Peter: Sure Doug why not?
Mike_Summey: Sorry I got kicked out as I was answering Peters question.
EDDIE: I work a full time but I’m always looking for deals weekends and
late evenings
Doug_in_CT: That’s all it should take to find a few opportunities and
then keep going with your regular job until the passive income exceeds expenses.
Peter: Mike how can you get kicked out answering my question
Mike_Summey: Peter, if you spend just 4 hours a week looking and making
offers and you only buy one property per year and buy it right, that slow but
sure method will make you rich.
Peter: Good to know Eddie
Al_Lee: Roger, I’d love to get together in LA, but i do not have anything
schedule at this time. I have done deals in LA, but not very often. I do San
Fran almost monthly.
Mike_Summey: Ralph must have done it.
Peter: Mike I appreate that little peace of advise
Roger_Dawson: Okay, Al, let me know. We could go sailing (Mike’s favorite
sport-not) or go golfing.
Peter: Al…how do I attend the seminar in san fran
Al_Lee: Roger, I wonder if LA has restaurants as fine as the French Room,
though 
Mike_Summey: Peter, I built my portfolio on the weekends over a 30 year
period when I was working a demanding full time job overseeing offices in two
states.
Roger_Dawson: Yes, Al, but nothing as expensive!
Mike_Summey: Hi tm4mulator
Al_Lee: Peter, you can just show up at the Crowne Plaza at 6:30, or you
can register online via the Learning Annex website I think it is
www.learningannex.com
Peter: Mike my investing is affecting my peformance at work
sometimes…any ideas how to take care of that?
tm4mulator: hey mike
Al_Lee: Peter, what kind of work do you do?
Peter: Crown plaza the one at sutter?
Peter: I am a software engineer
tm4mulator: Greenville, SC
Al_Lee: Peter, that’s the one
Doug_in_CT: Peter, I am finding that having focused on "Weekend
Millionairing" for the last couple of years has really changed my way of
life. It starts real slow but it can snowball before you know it. Soon your way
of life has radically changed for the better.
Roger_Dawson: I need to leave you now. My wife is just back from two and
a half weeks in Europe and I need to show here where the kitchen is.
Peter: Roger have a nice time…good night
Al_Lee: I will have one of the rooms on the Mezzanine level. Idon;t know
which one yet.
Doug_in_CT: She should have some good European recipies for your Roger.
Mike_Summey: Peter, do you job first … that what puts groceries on the
table. Work on your real estate during your spare time. If you spend too much
time on the real estate and it costs you your job, you won’t be able to live on
the income from your real estate for several years. It takes time to mature and
grow.
Al_Lee: Roger, and the washer and dryer, too, right?
EDDIE: Good luck Roger
Peter: thanks Mike…I will remember that
Mike_Summey: Roger, my wife and youngest son left today for 2 weeks in
Germany.
Doug_in_CT: Mike are they just going touring?
Peter: It was great and informative chat session today
Peter: where in Germany munich?
Al_Lee: Ladies and gentlemen,. I need to run now. It has been fun as
always.
Al_Lee: Goodnight
Peter: Thank you very much Al
tm4mulator: Mike, at what point would you consider the interest being too
high and should you on the side line?
Mike_Summey: Peter, it’s easy to get caught up in the enthusiasm of
investing, which is a long term endeavor.
Peter: see you next week…and good night
EDDIE: Mike are there any good seminars coming up in the NC or
surrounding states anytime soon
Peter: yes…that is what is happening to me right now
Larry: Peter, I have been doing r.e. part time for 12 years but this
December I retire after 30 years and have 80 + rentals now
Peter: I will try to take is slow and steady!!
Mike_Summey: Eddie, I don’t know of any right now.
Peter: wow…Larry 80+ that is a big empire
Peter: Congratulations on your retirement
Mike_Summey: Sound planning Larry.
EDDIE: Congrats Larry, I know you told me you would be retiring soon
Mike_Summey: Folks, I’m going to have to sign off as well. I haven’t had
dinner yet.
Doug_in_CT: Larry are those Apartments mostly or sfr’s?
Larry: Hi, Eddie- treia meeting next week. We have HUD coming in to talk.
Sept. Vena Cox Jones-
EDDIE: Good night Mike
Bob_Carr: Nite Mike
Peter: I invest only in sfrs right now
Larry: Mostly SFR
Mike_Summey: I’ll see everyone next week when we should have a super
informative chat.
Peter: Great….
Mike_Summey: The rest of you keep talking.
Peter: I will too leave now…thanks everyone for the advises
Doug_in_CT: What part of the country is that Larry?
Mike_Summey: ‘t have to leave just because I do.
EDDIE: Good deal Larry, I just purchased a hud sfh and will close on
Thursday
Doug_in_CT: See you Mike, Thanks as always.
Ralph_Roberts: nite, Mike
Larry: Good Night, Mike– Thanks
Mike_Summey: goodnight
Peter: Good night everyone
Ralph_Roberts: see ya, Peter
Peter: See ya Ralph…thanks
Ralph_Roberts: guess it’s about time to post the transcript 
tm4mulator: good nite all
Larry: Glad things are going well in Eastern NC
Ralph_Roberts: you guys stay as long as you like… good night all!
EDDIE: Yea, I’ve just been complaining about insurance rates tonight
EDDIE: Nite Roger
mayorad: Good night, all.
Doug_in_CT: Where are your rentals Larry?
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