Chat 10-10-05
Posted on October 10, 2005
Carol: hi
Al_Lee: I am looging in 5 minutes early, so I will go get a cup of
something to drink and be right back.
Al_Lee: logging, not looging
Al_Lee: Hello, Mike. Hi JS
Mike_Summey: Hello everyone
Mike_Summey: JS where are you from?
Mike_Summey: Hi Ralph
Al_Lee: Wow, if Ralph is getting kicked out we are in trouble big time
Mike_Summey: Al, you’re right
Mike_Summey: Hi ritchie
ritchie: Hi Mike, good evening
Ralph_Roberts: greetings investors
Ralph_Roberts: it’s okay, Big Al … I got a new computer, still shaking
it down
Al_Lee: Ralph, OK, I feel better now.
ritchie: Mike, is there still going to be a class in Asheville Nov. 19?
ritchie: You had mentioned it in a previous chat.
Mike_Summey: ritchie, yes! I will be conducting a seminar in Asheville on
Nov 19.
Mike_Summey: Hi Bob
ritchie: Mike, is there information anywhere on the weekend millionaire
site?
Mike_Summey: ritchie, not yet. It will be on the site as soon as I get
the details from the sponsor.
Mike_Summey: Hi bubba
Bob_Carr: Hi Mike
bubba: hi
Al_Lee: Hello, Bob
Bob_Carr: Al Lee how are you doing
Mike_Summey: Roger will join us shortly.
Al_Lee: Doing great, and you?
Bob_Carr: Fantastic
Al_Lee: I can’t believe they took that photo whiel I was away tending to
“business”
Bob_Carr: I coudn’t believe that
Mike_Summey: Hi Rob
Rob_L: Hi
Mike_Summey: Hey JS, are you there?
Mike_Summey: JS, I was just curious about where you live.
Bob_Carr: Mike & Al,what are your thoughts on a home approx 50 years
old as far as long term problems on returns
Mike_Summey: Hi Kerry
Kerry: Hi there…first time here. Good to see you.
Mike_Summey: Bob, I don’t like old homes. I try to stick with properties
no older than 25-30 years.
Mike_Summey: Kerry, we’re all friendly, so feel free to jump in at any
time and ask a question.
Al_Lee: Bob, I have no problem with the age if the deal is right. If it
will cash flow and you have projected the exenses for repairs, you should be
just fine. In Europe 50-year-old houses are considered new construction.
Kerry: Roger that.
Bob_Carr: Thanks guys
ritchie: Mike, the book recommends you stay within 10 miles of home.
Where I live the market is close to the high end. Even middle income homes sell
high but the rental rates are depressed now, presumably because of a lot of
landlords. Therefore it is very difficult to hit break-even without a
significant down payment or buying at a significant discount to the market. Such
deals are very hard to come by. In other parts of town, however, in working
class neighborhoods, it is possible to find rental properties where the numbers
are much more compelling. Would the weekend millionaire consider that as well?
Al_Lee: You do have to be aware of issues with the e;ectricla system
(2-wire instead of 3-wire) and lead-based paint on older homes
Mike_Summey: Bob, my problem with the older properties is the potential
liability from asbestos and lead paint. It probably doesn’t mean much to a new
investor, but the more you accumulate the bigger target you become for lawsuits.
Rob_L: I plan to refinance my first rental. I don’t plan to keep the
house for 30 years. What is the best refinance plan I should use? I have heard
Al and Mike’s feelings about interest only vs. paying off loan….
Kerry: That interests me, too. I was up to 15 properties and have sold
them off for various reasons…starting over again.
Bob_Carr: al,i was just thinking about the time I would be using the
income I might just have a lotbut you mentioned this last week,that would be
worth something also at that time
Al_Lee: Rob, estimate that yu wil pay about 3% of loan value in costs for
refinancing. You don;t want to do it too often, but it is a good way to get yoru
equity out to buy more properties
Rob_L: I was talking to the Money Warehouse where they have a program
using the cost savings index which really Maximizes cash flow. Has anyone heard
of that?
Kerry: That is an index, just like the libor…
Al_Lee: Bob, you lost me on that last question. Could you restate it?
Mike_Summey: ritchie, the working class neighborhoods are the ones that
usually produce the best deals and are the best rental neighborhoods. Don’t
worry about deals being scarce. It’s just a cycle we’re going through. Things
will get better as interest rates rise.
Mike_Summey: Rob, I like to pay them off as quickly as possible. A paid
for house provides wonderful cash flow.
Al_Lee: Hi, Roger
Bob_Carr: Mike,I have been going to auctions in Baltimore down in the
City and seeing alot of townhomes in the fifty year age
Roger_Dawson: Hi Al, how are you?
Mike_Summey: Hey Roger,
Rob_L: Mike, so are you saying you will go for a 15-year refinance to pay
off principal faster?
Al_Lee: Roger, if I were any better I would be you
ritchie: Mike, thanks. I’d prefer to stay close to home but I’m also
willing to stretch further to find deals. Re: your last comment, if interest
rates rise, doesn’t your cost of doing business also rise?
Mike_Summey: Hi dobefan
Bob_Carr: al,i was wondering if you bought a 50 year old home now what
could some of the problems be in 30 years from now that I’m not thinking about
Al_Lee: note: if you got 30-year fixed-rate loans and interest rates
rise, you wake up laughing every morning.
Roger_Dawson: Downtown can be a great place to invest right now if you
get in the cycle. Nobody wanted to live in downtown LA five years ago, now the
have old buildings converted to condos that are selling for over a million each.
Roger_Dawson: Meant to say early in the cycle.
Kerry: I’ve worked the pre-foreclosure market…any thoughts about that
in today’s market? I’m thinking reos will be better value as rates rise.
Thoughts??
Al_Lee: Bob, The 50-year old homes I am interested in are in
neighborhoods that are ripe for renovation and gentrification. I would not
expect to still own them in 30 years because the value should appreciate so much
that it is better to sell on a 1031 exhchange and use the cash to by several
more newer properties.
Mike_Summey: Rob, I like to get the properties paid off as quickly as
possible. For me, 15 year financing is my goal, but age has a lot to do with it.
Also your financial condition has a lot to do with it too. If you’re in your 20s
a 30 year loan doesn’t look the same as it does if you’re in your 50s. 
Roger_Dawson: Kerry, most people have enough equity right now to bail
themselves out if they get into trouble. But it’s going to be a good market and
if you’ve been working it you’ll be in a prime position to make it work.
Al_Lee: I view older homes as a semi-permanent investment that will get
“traded” when the market favors such a trade.
Rob_L: Mike, what if you don’t plan to keep the house for 15 or 30 years?
Would you go for that many years or would you even consider an ARM if you were
to hold for 5 years or so only?
Bob_Carr: Al, I follow you
Al_Lee: I view older homes as a semi-permanent investment that will get
“traded” when the market favors such a trade.
Al_Lee: I view older homes as a semi-permanent investment that will get
“traded” when the market favors such a trade.
Roger_Dawson: I know what Mike’s going to say. He’s going to say
“why would you ever want to sell?”
Kerry: Thanks Roger. We just moved to the UK (usaf) and I can’t work the
PFC market the same as I did from the US…so thinking out 2 years.
Mike_Summey: Kerry, pre-froeclosure is only one of many ways to find
potential deals. I don’t like to focuse on any single way of finding deals, but
rather look in all areas knowing that deals can be found in many different ways.
Mike_Summey: Hi hypnotx
hypnotx: hello!
hypnotx: Kerry as in formerly from Tucson?
Rob_L: Roger, yes I read the book….I was curious if the same loan will
be taken out in such a scenario.
Kerry: Yes!
Mike_Summey: Rob, I’m not a good one to ask that question as I’ve never
sold a property.
Roger_Dawson: Kerry, I was born in Croydon, ten miles south of London.
Where are you based?
Bob_Carr: Roger, What can be done in your area at this time for rentals
hypnotx: met your hubby at a Cashflow game a few years ago there
Kerry: We are based at Mildenhall, live in Brandon, nr Thetford.
Kerry: hypnotx, that’s very cool!
hypnotx: small world! How has UK REI been for you guys?
Kerry: We bought…market has dropped significantly. We’ll hold long
term.
Al_Lee: My computer hung up, so I switched to my laptop and am re-booting
the other one
Mike_Summey: Al, must have been a Macintosh
Kerry: I’m actually looking at Texas, so Al_Lee has been speaking to my
heart lately.
Roger_Dawson: Bob, I’m in Los Angeles and the market has gone crazy. 1200
square foot house in so so areas selling for $500,000 but renting for $2000.
That won’t work for rentals, so it’s best to look further out of town where
prices are more moderate.
Al_Lee: I can’t see the history dialogue, so if I missed a question.
pleae repeat it.
Rob_L: Al/Mike, based on your answers about old homes, it sounds like you
would hold the old home even if that home may have more maintenance as time goes
by, correct?
Bob_Carr: al,i thought your friends came over
Mike_Summey: Al, the recent research I did shows Texas to be a goo plac e
to invest, but you’ve been telling us that for a couple of years.
ritchie: Does anyone have experience with quadraplexes? Is financing as
easy to obtain, at competitive rates?
Mike_Summey: Rob, I probably wouldn’t have bought it in the first place.
Al_Lee: Mike, I’ve been investing in Texas since 1974, but now lots of
people have figured it out
Kerry: I’ve been hearing that, too. I’m looking at El Paso, but your
argument for Dallas looks good, too, Al.
Bob_Carr: Roger,Thats what I thought,making it hard to get started if you
lived out there
Al_Lee: Bob, Right! we are sendingout for more beer and ammo
Mike_Summey: Al, the more who learn about it the better chance you will
join the rest of the country and see a price spike.
Mike_Summey: Hi Kim
Kim-OH: Greetings all, sorry I missed the chat last week
Roger_Dawson: Hi Kim!
Kim-OH: Hi Mike
Al_Lee: Mike, when we do get that pridce spike, I will be laughing out
loud!
Kim-OH: Hi Roger
Bob_Carr: Mike,Have you been seeing the friends Al has been hanging out
with
Kerry: Foreclosures in TX are at an all-time high, too, though. Prices
are moderate, and elderly growth in TX is high. All looks good to me!
Kim-OH: Hi Al
Mike_Summey: \Bob, no! I got the picture, but was Al in it?
Kim-OH: Hi Ralph, thanks for the new password LOL
Al_Lee: Mike, Bob sent me a photo of our Tortoise club members waiting fo
r looters in Texas. That’s why we didn’t have any! :<
hypnotx: Kerry - do you expect TX to get more full time elderly residents
or “snowbirds?”
Roger_Dawson: I was in a bar in Amarillo once when a husband came in and
dragged his wife out by her ponytail. Weird thing was, nobody said a word about
it.
Kerry: Census data has shown Boomer growth.
Kerry: You’ll probably continue to see that in AZ, too, for years and
years.
hypnotx: ahh! so all forms of RE should be growing in both areas
Kim-OH: hi tm4
Al_Lee: Texas is a haven for business. It attracts companies that want to
relocate and attracts propel who want to work for those companies. There might
be some snowbirds, but not many. Not like FLorida!
hypnotx: I’ve been discussing market fundamentals with some Phx
investors, and it seems strong for the future, although there probably needs to
be some pricing correction
tm4mulator: hello all
Kerry: In Phoenix, yes. Tucson, maybe.
Roger_Dawson: Hi
hypnotx: Tucson not as strong of growth?
Kerry: Not as high as Phoenix.
Bob_Carr: Al - If your set-up works like you say,It would save me a lot
of time.I could then just purchase a home a month and in 10 years be set
hypnotx: Will it catch up as people who want to be in AZ gravitate
towards lower pricing for the same weather, or will slower biz growth keep
Boomers in the Phx area?
Mike_Summey: Everyone, just fyi. There are always deals in real estate in
all markets. The trick is finding them. It takes work and research. For everyone
who tells me they can’t find deals, just remember the old Chinese proverb,
“Man sit in chair for very long time waiting for roast duck to fly
in.”
Kerry: Ha ha!
hypnotx: and longer for peking duck!
Al_Lee: Bob, that is the idea!
Kim-OH: Mike, yup and sadly right now all I can do is sit in a chair
grrrr
Mike_Summey: Hi tm4mulator
Kim-OH: Hi Eddie
Mike_Summey: Hi Eddie
EDDIE-NC: hey
tm4mulator: when do you really know if it’s a seller or buyer market?
hypnotx: it sometimes seems odd how simple this biz can be… and how
complicated people want to or “need to” make it
Mike_Summey: Kim, you can do more in a chair than most can with 2 good
legs.
Kim-OH: Mike, that’s true enough until Sept. 30th
Al_Lee: Bob, I am meeting with a man Wednesday about a dozen (Fairly)
new-constuction houses (2-3 years old) with leases on all of them. And priced at
or below 100 months rent.
Roger_Dawson: hypnotx: a good guage is length of time on market. boards
of Realtors¨ track it and any agent can tell you what it is.
Kim-OH: ^5 Al Lee
tm4mulator: what are the major signs?
Al_Lee: Hi Kim, How are you doing?
hypnotx: thanks for that info, Roger!
Mike_Summey: tm4mulator, by the percentage of offers you have accepted.
If you making offers right and very few are accepted, it’s a sellers market. I
many are accepted, it’s a buyer’s market.
Bob_Carr: Al- You kidding
Mike_Summey: Kim, what happened Sept 30?
Bob_Carr: Al- I better join up
Al_Lee: Bob, I wouldn’t kid you. Not about a thing like that.
Kim-OH: Al, not doing well right now, got burned out of my home on Sept.
30 then developed a blood clot and died on Oct. 2 but they brought me back, had
surgery on Oct. 5th but couldn’t have my chemo, aside from that all’s well
tm4mulator: I am difintely in a buyer market here in Greenville, SC area
Kerry: Al_Lee, I saw on your website that you have a lender that works
with investors that have a lot of property…can you tell me how you work in
those higher #s of properties? i.e. non-conforming, commercial loans, lines of
credit??? Thanks
ritchie: Mike, or anyone. Any experience with quads? Financing them?
What’s a good price ratio?
Roger_Dawson: ^5 Kim!
Kim-OH: Oh yes and I have been in three hotels since the fire, the
hospital twice and still I don’t have a new home yet
Al_Lee: Kim, sorry to hear about that, but you are still with us, so that
is a bright spot.
Kim-OH: Al thanks, how is your wife doing? I keep her in my prayers
Mike_Summey: tm4mulator, you’re right. The recent research I did showed
Greenville to be a good place to invest. Asheville, on the other hand, is in a
strong seller’s market still.
Al_Lee: Kerry, we have brokers who specialize in investors and deal with
banks and insurance companies that don;t care about the Fannie Mae guidelines
because they are portfolio lenders–it is their money!
hypnotx: Wow, Kim!!! I’d better re-evaluate the excuses I’ve been using
to slack off! That’s a lot for one person to go through in an entire lifetime!
Kim-OH: Hi deadeye
Mike_Summey: Kim, that’s terrible.
Roger_Dawson: Welcome Deadeye
Al_Lee: Kim, she is doing very well. Still not back to 100% energy level,
but getting there.
Kim-OH: ug
Deadeye31: hello all
Kim-OH: Oops Hi Doug
Doug_in_CT: Hi Kim, et al
Kim-OH: Mike, yes it’s been a wild ride
Mike_Summey: Hi Deadeye
Kerry: I had just gone round to talk with commercial lenders before the
AF sent us to the UK…thought locs would be the way to go. Thanks, Al.
tm4mulator: thanks Mike
Mike_Summey: Hi Doug
Mike_Summey: I have a story for everyone.
Al_Lee: Kerry, are you usaf?
Kerry: yes.
Kim-OH: hypnotx, you will pick up when the time is right for you
Mike_Summey: I got an email last week from a teacher asking to be removed
from our email list.
Kim-OH: Mike, I really hated having to miss the chat last week
hypnotx: Kerry, I use a LOC on our first building, and our local bank
just renewed it at 88.2% of what I paid for the commercial building!
Al_Lee: I was in usaf from 1965 - 1969.
Roger_Dawson: Mike we had a question earlier about financing four plexes
that didn’t get answered. My recollection is that a 4 plex is appraised by the
comparison method and lenders make loans more like home loans. Is that still
true?
Mike_Summey: She said she didn’t have time to invest in real estate with
all she had to do with her job.
Al_Lee: Mike, with that attitude, she never will, either.
hypnotx: Another person that’s too busy working to build wealth?
Kerry: Very cool, Al. Except for the deployments right now!!
Deadeye31: I’ve been looking at the ways tenants can get out of being
evicted immediately and it sure can be hairy. I was wondering, if a person
claims they’ve lost their job can you ask the court to tell the person that if
they don’t provide adequate proof they’ve been looking for a new job, can they
be obligated for the back rent?
Mike_Summey: The interesting thing is that the week before, I got an
email from another teacher who just left her teaching job because she didn’t
have time to work at a job that wasn’t paying her what she was earning from her
real estate.
Doug_in_CT: Roger, When we got our four plex last December, the appraiser
did both the comparison method and the method used in commercial buildings.
tm4mulator: Mike, I am working on deal that involve 23.51 acre, the house
is a 3/2 2950 sq.ft. I am thinking about having it appraise with the min. amount
of acre to get the deal done and maybe consider developing the rest. Can u
comment on this?
ritchie: Doug, what kind of interest rates? ltv?
hypnotx: Doug - was that the income approach (or CAP rate approach)
Mike_Summey: On financing 4plexes, the banks are going to look at the
cash flow more strongly than an appraisal.
ritchie: Mike, that’s kinda like saying I don’t have time to sharpen the
saw because I’m too busy cutting down this tree.
Doug_in_CT: We got some owner financing for 7.5% fixed for five years and
then tied to Libor.
Roger_Dawson: Deadeye, judges don’t consider whether the person can pay
or not. That’s not there problem. They look and the contract and did you follow
the law with your eviction procedure. Then they give you a judgment and it’s up
to you to collect.
Kim-OH: wb Ralph
Doug_in_CT: hypnotx, yes, it was the income approach (cap rate)
Roger_Dawson: libor is the London index. Why are they using that and not
prime?
hypnotx: Doug - we’ve found that some bankers use whichever approach will
let them give you the least money… and others use whichever gives you the
most!
Mike_Summey: tm4mulator, that sounds like what I’d do. Try to buy it
without encumbering a large portion of the land as possible. then you can
develop the land and use it as the down payment to get good financing.
hypnotx: Guess who our LOC is with?!?!?
Mike_Summey: ritchit, right on!
tm4mulator: thanks for the confirmation..I really appeciate it
Roger_Dawson: loc: Library of Congress, it’s with Washington, DC
ritchie: Doug, is 7.5% a little high?
hypnotx: sorry.. Line of Credit *)
Mike_Summey: ritchie, 7.5% seems high for seller financing. I’d never pay
more for seller financing that I coud get from the bank.
ritchie: Mike, on a 4 plex, would you expect the same rate as for a
single family investment property?
Mike_Summey: ritchie, I’d probably get the same rate on a 4 ples as I
would on a single family, but for a new investor, a bank would probably try to
get and extra half to full point higher rate.
tm4mulator: Roger, you tape set has helped me to be a better negotiated
and has landed me some good deals…thanks a million.
Mike_Summey: Hi Mark
Kim-OH: Hi Mark
MarkNC: HI everybody.
Roger_Dawson: Thanks a million tm4mulator! You made my day! Of course it
hasn’t been much of a day up until now.
Al_Lee: Roger might prefer that rather than saying “thanks a
million” you just send him half of it.
Kim-OH: Roger, that wasn’t nice!!!
Roger_Dawson: Sorry Kim, compared to your 9/30 it was a fabulous day.
Kim-OH: Roger, that’s not what I meant, but thanks anyway
Kim-OH: It was funny, just not nice, but I like funny
Roger_Dawson: Alright guys and girls. I can stay home and get nagged you
know.
Deadeye31: if you’re tenants need government help to pay the rent, do you
guys generally try to help them get it? some instances like the Homelessness
Prevention Program need an order of eviction from the Landlord.
Kerry: I haven’t had that happen.
Roger_Dawson: I’d help them to apply for Section 8
Deadeye31: New Jersey has this law on the books
tm4mulator: with the interest rates projected to go higher, at what point
do we sit on the side line and wait or is there such a things?
Kim-OH: Deadeye, isn’t that just a rip, a person needs help so they have
to screw up with their landlord to get that help
Deadeye31: I don’t make up the rules. I just want my 6 month’s rent if I
get into this position
Roger_Dawson: New Jersey must be full of white wine sipping liberals!
hypnotx: tm - there is some great info from Sam Zell and other huge
players at the Wharton School website that might help with the “music
stopped, where’s my chair” question
Kim-OH: Deadeye, I understand that you don’t make the rules, they are
just crazy in my humble opinion
ritchie: Has anyone ever used government loans for property rehab?
Deadeye31: I know
Kerry: tm4mulator, rates will go up, and prices will likely come down. It
will balance out. If you buy at a discount anyway, and ensure positive cash
flow, I’d still buy.
Al_Lee: A lawyer once told me that in NJ a tenant coudl not pay rent and
then put off eviction long enough to claim squatters rights and become the owner
of you house. Very nice!
Deadeye31: I’m just trying to find a waterproof way of evicting the guy
the next month
Kerry: Deadeye31, have you considered paying him/her to leave rather than
evict? It can be cheaper/faster…
Roger_Dawson: Ritchie, isn’t there a program where you can $32,000 from
FHA and it’s easy to get approved for improvements?
Doug_in_CT: Ritchie, No, I don’t think so, I am in a market that has been
appreciating at about 11% each year since 2004. So borrowing at 7.5% doesn’t
seem bad and I really like the fact of no points, no junk fees, no hit on the
credit report, and no pre-payment penalties. Owner Financing is worth more than
Bank Financing in my book (yet to be written).
tm4mulator: thx Kerry
Kerry: I had a killer eviction/foreclosure once. Took forever to get her
out.
Deadeye31: My uncle has a 6 monther on his hands
Kerry: wish I’d paid her instead!
Kim-OH: Deadeye, there is no bullet proof way, when going to court it’s
always a cr@pshoot, if you do it right you usually win, but everynow and again
the judge has a bad day
hypnotx: Deadeye - See if you can help him move with some cash, and paint
a very unhappy picture of his future if he doesn’t. I’m sure there’s somebody on
here with some negotiation tips! 
Doug_in_CT: Should have been, since 2000.
ritchie: Roger, I’m not sure of the details. I have seen info on HUD and
on my county website regarding the community reinvestment act. Just wondering if
anyone has used this as a source of rehab funding, whether there is a lot of red
tape, etc
Roger_Dawson: I could tell you tenant evictions stories that would have
you down on your knees begging me to stop, but as Mike says, it’s just a cost of
doing business.
Al_Lee: Texas has a 3-day eviction notice and the sherrif will coem with
you to move their stuff to the street after the days are up. One of many reasons
I invest in Texas only. (Except for commercial proeprty which I do own outside
of Texas.)
Kim-OH: ritchie, a lot of those funds are forgivable grants if one rents
to low income folks for a term of 5 years
Kerry: Oh, besides lost rent, she damaged the property as she
left…human poo on the floor and walls…holes in walls, trash with
maggots…pretty.
Kerry: Al_Lee, that’s one reason TX is so appealing!!
Al_Lee: One of many reasons.
hypnotx: Deadeye - I’d recommend getting a professional (attorney) to
give you your options. I seem to recall hearing somewhere that the person with
the most (perceived) options fares best
ritchie: Kim, that sounds very interesting, particularly if the market is
such as mine.
ritchie: Kim, do you know where to find more info?
Mike_Summey: I have a mobile home park (lot rentals only) that I’m having
to evinct about half of the people in the park. the manager I am using allowed a
ton of undesirables to move in and when I found out about it, I was furious. I
had the manager send notices to about half of them to move by the end of
November. That still has to play out, but I hope we can get everyone out and
rerent to the right kind of people.
EDDIE-NC: Rents due on the first, if not paid papers are filed on the
fifteenth, then they have whatever the law states for time to come up with the
rent and cost of court
hypnotx: Kerry - that’s why we started with commercial buildings…
tm4mulator: Mike, how is the software development coming along? I know
you already told me it will be ready when it’s ready. Any status on it?
Kim-OH: richie, the dollars are called home dollars and the grants range
up to 5k for a one bedroom, 8k for a two bedroom and 15k for a three bedroom,
you may have to match those funds
Kerry: hypnotx, where/what did you buy?
Deadeye31: I was just talking to my uncle, he’s an investor. Some how he
makes hundreds of thousands a year yet he doesn’t even know half the deductions
he can make. He leaes it all up to his lawyer. But you were right, Mr Summey, he
asks “why pay a property manager 10%?”.
hypnotx: I heard stories of people writing “love notes” to the
landlord in the carpet with hot fry-daddy grease and I’m sure you guys have much
worse to add…
Kerry: Out of 15 houses, I’ve only had the one eviction/damage.
Deadeye31: there goes that guy’s deposit
Kerry:
Mike_Summey: tm4mulator, we’re slowly getting it ready. The latest
version I looked at over the weekend is much better and my hopes are to have it
finished within the next few weeks. I just want to be sure it does what it is
supposed to do before we turn it loose.
Kim-OH: ritchie, yes you would talk with HUD and whoever overseers the
community development grant money in your area
Roger_Dawson: Donald Trump made his first million taking over a trashed
apartment building and cleaning out all the deadbeat tenants.
hypnotx: Plus, after hearing what he wrote about my buddy in the carpet,
I can assure you that his mom is nothing at all like that!!!
Deadeye31: Jeez, you guys should read what a tenant can do to stay in. We
really are “big bad millionaires”
Al_Lee: Never invest in a state run by libverals. They think owners are
bad rich people and tenants are poor oppressed people. IN court, youcan be dead
right and still lose because youare perceived as being richer.
Deadeye31: here’s the link to a site that offers tenants some advise:
http://www.lsnjlaw.org/english/placeilive/rent/tenantsrights.cfm
Roger_Dawson: Deadeye, better that investors own real estate than the
government. Have you seen some of those goverment owned projects in New York and
Chicago? They are disasters!
Deadeye31: I know. I have seen them
hypnotx: Would it be considered becoming a “traitor” if we
collected stories and assembled a book called “Deadbeat Tenanting for
Dummies”
ritchie: Ok, gotta ask. Do you guys screen tenants? Call the previous
landlord? Isn’t there a way to predict who the bad apples are?
tm4mulator: Mike, r u still traveling promoting the book? And is it
doing?
Roger_Dawson: Gotta call the two previous landlords. Their current
landlord may say anything to get rid of them.
Deadeye31: unfortunately, you really should be bias toward the middle
class white guy with a family. Some how that’s the most stable family kind I’ve
seen.
Mike_Summey: ritchie, we check credit and criminal histories on everyone
we rent to, but we still have some that fall through the cracks. That is just a
part of doing business.
Kerry: I didn’t screen tenasts. Should have. We did look at the condition
of their cars. If good, we rented. Not a terrible system (if you call it that)
Al_Lee: ritchie: you are damn right we screen tenants. Credit check,
employment check, reference check, criminal background check, then cross check
all of the results to be sure they haven’t stolen an identity.
Kerry: Shew.
ritchie: In my limited experience (one house), I took a credit
application, and called the current landlord
Mike_Summey: tm4mulator, stil traveling. Book is doing well. New book is
scheduled for relaease in late Jan or early Feb 2006
Kerry: Al, do your turn-key properties come with tenants like that?
Deadeye31: My uncle mad the big mistake. He took a deposit before the guy
signed the lease agreement and the court orderred him to pay back the deposit
after the guy didn’t move in
Roger_Dawson: Mike, liberals would say that a criminal has paid his debt
to society and you shouldn’t discriminate because they’ve been in jail. Isn’t
that a crock.
Al_Lee: Deadeye, it is illegal to discriminate based on race, age,
religion
Kerry: Hi mewpa
Al_Lee: Kerry, most of them have tenants before I see them, but if we get
the tenant the answer is Yes
ritchie: the first applicants lied on the application and gave me the
number of a friend instead of their landlord. The didn’t get the house. The
second applicant was squeaky clean. Before I had a bird in hand, I actually was
tempted to rent to the first applicant. I’m glad I stuck to my standards.
Deadeye31: It’s a preffered demographic. If they check out, I would rent
to them. But what about illegal Mexicans? many of them rent.
hypnotx: Where does discrimination begin and statistical analysis end??
Deadeye31: now that is the question
ritchie: Sorry, lost some of the previous post.
Roger_Dawson: You can deny the property to anyone for any reason, except
race, religion or age.
ritchie: that was re: tenant screening, first house.
Al_Lee: Deadeye, we do not discriminate abainst “undocumented
aliens” as it is illegal to do so. We look at credit record and rental
history and check references every way possible.
Kerry: Roger_Dawson: liberals say lots of things. <g>
Roger_Dawson: Next week I’m going to be visiting Mike Summey at his
mansion in North Carolina, so we’ll do the chat together from there.
Mike_Summey: Roger, criminals may have paid their debt to society, but
not to me. I’m the landlord. If they have a criminal record, I don’t rent to
them.
Deadeye31: Is discriminating against college students discrimination?
Roger_Dawson: Al, are you serious? You can’t discriminate against someone
because they are in the country illegally? What sense does that make. They could
get deported any day!
Mike_Summey: We’ll do the chat together unless he beats me in golf. Then
I may have to do the chat alone, because Roger Dawson will be doa.
hypnotx: Would it be rude to say that our legal system needs an enema?
Deadeye31: look at the bright side, if they fail to pay rent, call ins.
MarkNC: COllege students are usually easy to rule out if you want based
on income vs expenses. (I however rent to them with parents as cosigners)
ritchie: Seems kinda simple. Good credit, or at least solid payments on
rent and car for past year, safe risk. Lousy credit, no references, dangerous.
Al_Lee: I don’t make the laws and I don’t necessarily agree with all of
them, but I have to follow them.
Mike_Summey: hypnotx, it not only wouldn’t be rude, it would be kind! It
needs more than that.
ritchie: Am I missing something?
Roger_Dawson: I have to run! See you next week. Kim come with some good
news, will ya?
Deadeye31: can you put a provision in a lease agreement that the rent
will go up at a steady rate (like 5% a year) and make the lease last 2 years or
does it, by law, have to be a one year only lease in order to increase the rent
the next year?
Kerry: By Roger.
Kim-OH: Sorry, I have to leave another guest at the hotel wants to use
the computer
Kim-OH: Night Roger
Mike_Summey: I have to run also. Lot’s to get done tonight.
Kerry: Good luck with your health, Kim.
Bob_Carr: Roger - Al is correct,when I hire I can’t ask that question if
they sign off on their app.I had an INS agent tell me so.
Kim-OH: Roger,
Kim-OH: Mike have a great week
Kim-OH: Thanks Kerry
hypnotx: Deadeye - that’s done in commercial leases all the time.
Al_Lee: ritchie: ALso, you must confirm that the info they give you is
accurate. They will often give false information and false references. You must
check it out and cross check to ferret out the bad ones
Mike_Summey: We will have an insurance expert on the 24th. Mark your
calendars.
Deadeye31: Is it legal for residential leases?
Mike_Summey: I’ll get more information on this the week prior.
Kerry: Mike, that ROI formula in your book was genius, btw. Made so much
sense.
Kim-OH: Mike, yipee I want to take to an insurance expert LOL
ritchie: Deadeye, is what legal?
Mike_Summey: You guys…and gals keep talking. I’ve got to run.
tm4mulator: thx all for the chat. I also have to go.
Mike_Summey: Goodnight
ritchie: thanks Mike
hypnotx: Adios, Mike!
Kim-OH: night Mike
MarkNC: thanks Mike
Deadeye31: having a 2 year lease and a line that says the rent will go up
5% after the one year mark?
Kerry: Bye, Mike.
Kim-OH: night all have a great week
Deadeye31: night
hypnotx: I’m not sure if it’s legal in res. leases, but a $ 20 call to a
RE Attorney should tell you… money well spent
Kerry: hypnotx, where/what did you buy?
ritchie: Deadeye, I’m not a lawyer. But why would it be illegal?
hypnotx: oh, and I am definitely not an attorney, but I do believe in
expert advice when necessary !
Al_Lee: Gotta go now. Looing forward to the next chat.
ritchie: What if the lease says after 6 months they will buy you a bear,
and they sign and agree. Is that legal?
Kerry: Thanks, Al.
ritchie: it’s an agreement between to consenting parties
hypnotx: owning a bear may be illegal
Ralph_Roberts: chat transcript will be posted shortly .. nite, all
Deadeye31: I gues anything is legal if you sign on the dotted line
ritchie: g’night all
hypnotx: worst case is that they’d probably try to negotiate it out down
the road, but we use escalator leases a lot to help start up businesses with
cash flow issues and into a property
hypnotx: I think it was on 22nd street at a strip mall church.
hypnotx: Emily, Rob, and some other folks!
hypnotx: it was right after a stage hypnosis show I did at Cholla HS.
Kerry: Oh. I miss those days.
Deadeye31: what kinds of property generally fall under rent
stabilization?
Kerry: you did the hypnosis, or were put under?
hypnotx: I’d love to go back there. I remember that Emily had bought a
cafe just a day or two before
hypnotx: I’m a stage hypnotist www.stagefun.com
Kerry: yes. We met there a few times.
Kerry: I will tell Robert. He’s getting ready to go to the Middle East
again.
Deadeye31: is that safe at this time?
hypnotx: Tell him our prayers are with him… and you!
Deadeye31: and bring a body guard
Kerry: Thanks! He has no choice…Air Force.
Kerry: he IS the body guard!
hypnotx: Oh, my wife won the 101 game that night with a huge stock deal
card… I still hear about it!
Kerry: Ha! I still post daily at rdpd.
Deadeye31: oh, well. good luck to him. I think I’d rather be at 10K feet
too.
hypnotx: he IS a body guard? MP?
Kerry: No, actually in the air. Back end aircrew.
paul59: Do you recommend forming an LLC before buying rental property?
hypnotx: as you’re buying it
Kerry: ditto that.
bubba: see yall
Kerry: bye!
Deadeye31: it’s only like $400 at that we the people place.
hypnotx: find the deal, sign the papers, find the money and form the LLC
at the same time.
Kerry: It is hard to get financing with a new llc. Reason why you do in
that order.
paul59: Thank you
hypnotx: most people use forming an entity as a way to stall making an
offer…
Deadeye31: you can use the contract to buy to leverage a loan, can’t you?
Kerry: Not with an unproven llc. Like having no credit at all.
Deadeye31: I won’t have a house of my own to borrow against when I start
looking
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