Chat 11-7-05
Posted on November 7, 2005
handsome_love4life: any body there?
andrew: hello
shashgo@hotmail.com: hi all
shashgo@hotmail.com: i finally am able to join
shashgo@hotmail.com: can anyone read this
Al_Lee: HI
Al_Lee: You are a half-hor early, but I just logged in to test my
connection.
Al_Lee: You are a half hour early, but I just logged in to test my
connection.
Ralph_Roberts: hi shashgo
shashgo: wow
Ralph_Roberts: yep, it works
shashgo: ive been here for a while
shashgo: re all you guys real estate investing buffs
shashgo: i had a question
Ralph_Roberts: the regularly scheduled chat starts about now… so far
it’s just you and me… and Ritchie!
Ralph_Roberts: hi Ritchie
ritchie: Hi Ralph
shashgo: okay hi all
shashgo: can i ask it now or should i wait
Ralph_Roberts: where are you located, Shashgo? I’m in North Carolina
shashgo: im just starting out and i want to invest in RE. Tell me do I
need to have oodles of capital to get in this game
shashgo: ritchie i used to be in NC till 2003 . now im in ct
Ralph_Roberts: there are ways of starting with little capital… Mike
will be along shortly and can give you a better answer
shashgo: okay
Ralph_Roberts: I’m near Asheville, by the way
shashgo: oh okay
shashgo: to be at camp lejeune
Ralph_Roberts: there he is!
Mike_Summey: Hello everyone
Ralph_Roberts: Mike Summey
shashgo: heya mike
ritchie: Hi Mike
shashgo: mike can we start asking you lotsa questions
Mike_Summey: Go with them
shashgo: okay
shashgo: do i start getting in the RE game with little cash , and how
much is a little
Ralph_Roberts: welcome Dave
DaveO: hello there
shashgo: do i start getting in the RE game with little cash , and much is
a little
Mike_Summey: shashgo, I started with almost no money, but that was over
30 years ago. I only put $600 into my first property. Finding deals when you
have little or no money is very difficult, but not impossible. You simply have
to keep making offers that you can close on when one is accepted and understand
that almost all of them will be rejected. It took me a year to buy my first
property.
Mike_Summey: Hi Dave
DaveO: We wrote out 1st couple offers in the past couple weeks. One is
being considered right now
shashgo: Mike, is it possible to take possession of a property fix it and
then sell it to someone without actually being a broker
Mike_Summey: That’s great Dave
Mike_Summey: shasgo, yes that’s possible, but I don’t know much about how
to do it. I’ve been buying investment properties for 33 years and have never
sold one.
Mike_Summey: Hi Al
Al_Lee: Hey, I got here early and nobody answered, but I’m back now
Al_Lee: Hi, Nike
Al_Lee: Mike
DaveO: Mike do you know of any good software or websites that are useful
for figuring out how much money you are going to have to put into a home? The
offers we made so far are on flip type situations and the hard part so far is
figuring out what the fixup is going to run
Mike_Summey: Al, I talked to Carleton today about doing your show. I
think he will call you when he gets home. He just left me this afternoon.
Al_Lee: Mike, that is great. Most important, though is did you beat him
at golf !
DaveO: My long range goal is to buy properties and hold them, but since I
have no cash, I am trying to get some seed money by flipping a few properties
Mike_Summey: Dave, we are very close to finishing the development of the
Weekend Millionaire Offer Generator program, which will walk you through all the
step to make offers that work and actually generate the Letters of Intent ready
for your signature.
Mike_Summey: Hi wai
wai: hi mike.
ritchie: Mike, I have a rental house that used to be my primary
residence. At the recommendation of an aggressive mortgage broker, I took out a
100% equity line of credit, adjustable, indexed to prime. At the time it made
cash flow with none of my own money. Now of course interest rates have consumed
all the cash flow. The property is in a highly desirable location, but rental
rates are depressed. For example, it might be worth 190K but rents for
1200/month. The tenant wants to buy the house from me after repairing credit.
Someone suggested instead I refi and keep it as a rental. The problem as I see
it is it won’t break even, although it probably will appreciate because of it’s
location and nearby schools. What would the weekend millionaire do?\
Mike_Summey: Hi Penny
Penny: Hi Mike
Al_Lee: Hi, Penny
Penny: and Al
Penny: having trouble with AOL tonight
DaveO: thanks.. some software would be awesome
Mike_Summey: ritchie, first the Weekend Millionaire would not have taken
out a 100% equity line with an adjustable rate. What did you do with taht money?
ritchie: Mike, I used the equity I had in prop1 to purchase prop2 to live
in. Prop1 appreciated and had a slim margin of cash flow with 100% of the banks
money.
Mike_Summey: Just for the record, I won $30 from Carleton today! Yeah!!!
Mike_Summey: Hi Bob
Al_Lee: ike, that is what is most important–you won!
wai: Mike, the golf game you mentioned in e-mail?
ritchie: Mike, I know that is aggressive, but it was a good time to move
up. Both houses have appreciated in 1 year.
Mike_Summey: ritchie, if you used the money to buy the house you live in,
then the rent payment you are saving is your return on that money.
Mike_Summey: Hi Larry
Mike_Summey: wai, that’s right
Mike_Summey: Hi michaelm
Mike_Summey: Hi steph
michaelm: Hi
Mike_Summey: Hidobefan
steph: hi there
Mike_Summey: Hi jilburn
jlbburn: hey mike
michaelm: ( been on the amiling list for a long time - thought I’d
finnally ‘listen’ in)
Mike_Summey: michaelm, glad you decided to join us. These chats are a lot
of fun and educational as well. I learn a lot from them.
jlbburn: what’s up this evening
shashgo: um sorry
ritchie: Mike, would the weekend millionaire keep the house with a
negative monthly cash flow, and wait for rental rates to rise, or would he sell
and look for better deals, incurring the transaction costs along the way and
most likely looking in less desirable locations?
shashgo: imy computer froze
Mike_Summey: jilburn, what ever you want to talk about.
Mike_Summey: Hi raleighbound
raleighbound: hi folks!1
Mike_Summey: Hi Sandy
shashgo: anyways will you have a transcript of this chat on the site
later
Sandy: Hi, Had trouble getting to this site tonite. Mike, you can ignore
the email. Hello to you all.
jlbburn: motivation…I’m just coming out of a pretty major burn out
Mike_Summey: ritchie, remember that the rent money your are saving should
be figured into the equation as well. That may make things a bit more palatable.
shashgo: mike how do you look for a property that is a low price, 600
like your first one
Mike_Summey: Hi Eddie
wai: Hi Mike, what would you recommend when rental income are far less
than monthly mortgage payment, such as southern california market i am in.
shashgo: what do you look for in a property
jlbburn: do you ever have trouble staying motivated, mike?
Mike_Summey: wai, have you read the article I posted on the website a
week or so ago titled “When the Bubble Bursts, Deals will Blossom”?
Mike_Summey: Hi TT
EDDIE-NC: Hi Mike and everyone
TT: HI
wai: No Mike, let me read it through another window
Sandy: Wai….where are you located? I’m in Long Beach
Larry_NC: Yes Mike. It was a very good article.
wai: Sandy, I am located in San Diego.
Mike_Summey: jlbburn, I’m no different than you or anyone else. Sure
there are times when I get a bit down, but when that happens I try to force
myself to recover by focusing on what needs to be done rather than how difficult
the task may be.
shashgo: Mike So are you saying that you have never flipped or sold a
property?
Mike_Summey: shashgo, thats correct! I still own every property I’ve
bought for over 30 years.
Sandy: I am a renter…..we are getting notices that our rent is going
up….for some it is $300, for others it is going up $500 per month. Plus,
everyone will be paying their utilities from now. They have turned this place
into a college dormitory. It is a mess now.
Mike_Summey: Hi JD
JD: Hi Mike
Sandy: Wai, I think SD is in a little better shape than this area? Am I
wrong?
Al_Lee: Mike, I am very close to being able to announce something I have
tried to do for at least three years. I will be able to have houses built for
rental that I can buy (or sell) for 85% of appraised value and will have rents
of more than 1% of purchase price and financing for 75% of appraised value (not
purchase price)at good rates (7.5% fixed) with 30-year amortization and low, low
costs.
shashgo: Mike, is it necessary to buy a property before you can fix it
and sell it to a third party? Ive been toying with the idea of flipping
properties, but I dont want to have to buy them before selling them. I want to
act like a middleman. Is that possible
Mike_Summey: Sandy, maybe you should start look for another place or even
better, a place to own and instead of buying a property for someone else with
your rent money, buy one for yourself.
wai: Sandy, better shape in terms of market condition?
TT: Hi Kim
Mike_Summey: Al that’s great. I’m sure that will generate a lot of
interest.
Kim-OH: Hi TT
Mike_Summey: shashgo, that’s a part of the real estate market that I know
very little about as I’ve never done it.
jlbburn: Mike, thanks for the insight. I know your philosophy is to stay
close to home….but are there cases where you think it’s worthwhile holding
distant properties? I’m in Dayton, OH and considering uying a couple of houses
in Daytona Beach….what say you?
Mike_Summey: Kim, wher ya been?
Al_Lee: Mike, I have been trying to pull this together for years and I
have finally got all the pieces I need
ritchie: Al, how is that possible?
Kim-OH: WAI Is that you my friend?
Kim-OH: Mike, Ive been trying to get in here tonight
wai: hey Kim, wai = wcf(ca).
wai: how have you been?
Sandy: Mike….that is the whole point. But added to that, I got a 20%
pay cut in addition to two other paycuts. Now I’m in a bind. Where to move
to…..it has got to be out of state, I’m thinking. But then I lose my
“stability history”.
Sandy: I’m on my way to my RE club tonite to find out about properties in
Kentucky, Ohio.
Al_Lee: ritchie, it ain;t easy! I have put together some innovative
construction technology and financing that is not normally available to the
general public. It took a lot of rsearch, but it is very exciting.
ritchie: shasgo, do you have a real estate investor association (ria) in
your area?
Kim-OH: WAI it is you, how are you my friend?
Mike_Summey: jlburn, if you buy properties that are distant from you, I’d
recommend trying to group them in an area where you can visit them economically.
Personally, I own a group of properties about 100 miles from where I live, but
they are all within about 5 miles of each other.
TT: Mike guess who I am having to evict?
wai: i have been doing great, thanks for asking. no wonder i can’t find
you at CRE nowadays, you’d been hanging out here my friend
Sandy: Wai, yes…..there seemed to be a lot of luck with tax liens a
couple of years ago. When I checked rents weren’t as much norther of you .
Mike_Summey: Sandy, I’d appreciate it if you would tell the club members
about our website and about these chats. We’d love to have all of the club
members join and participate.
Kim-OH: Sandy, I’m in Ohio and very near KY
Al_Lee: Hi, Kim. Somehow I didn;t notice you
Mike_Summey: TT…Who?
TT: A Madison County Sheriff’s Deputy!!
Kim-OH: wai, I’ve been a bit under the weather and I got burned out of my
home grrr
Kim-OH: Al, how is your wife doing? Hopefully her recovery is going well
Al_Lee: burned ut? Kim.
Sandy: I did tell them Mike. They were all enthusiastic about this, but I
haven’t seen anyone here yet. I’ll forward your email reminder to them all next
time.
Mike_Summey: TT, if they don’t pay the rent, kick ‘em out. Sheriff’s
deputies are no different from anyone else.
Al_Lee: Kim, she is a mean as she ever was. She must be fully recovered!
wai: Sorry Sandy, I’d never been involved in Tax Liens (isn’t CA a tax
deed’s state?)
Kim-OH: Yes Al, burned out on Sept. 30th, living in a hotel right now, ah
the pleasure of using my insurance for once LOL
jlbburn: Yeah…the 2 I’m looking at are in the same development and I’d
really like to build some inventory down there. I can stay in touch with
area…close friends in the area and a I like to spend some time there every
year.
Kim-OH: Al, that’s good to know LOL
wai: Kim>omg, you been doing alright my friend?
Sandy: Hi Kim……I’ll keep that in mind..I kind of remember that from
the last chat. I just got the notice a couple of hours ago so am trying to not
panic out.
Kim-OH: Sandy, no reason to panic
Mike_Summey: Sorry everyone about the late notice today. I had Carleton
Sheets here with me and we played golf today. I simply forgot to get the notice
out until we got back from the golf course.
Kim-OH: wai, I won’t lie to you it’s been rough with two hospitalizations
and surgery and chemo while here at the hotel
wai: Just watched the ABC local news last night, they warned homeowners
to make sure their house is fully insured for re-construction costs… due to
the wild fire last year.
jlbburn: I got a kick out of that!
Kim-OH: Mike you will be hung up by your toe nails and pummeled with an
organic carrot, oops you might like that
ritchie: Shasgo, if you get involved with your local ria, you might find
several people who find deals and then “wholesale” them to other
investors. That is not the strategy advocated by the weekend millionaire but it
is a way for you to get cash. Keep in mind it is work like anything else and you
have to decide what your time is worth.
jlbburn: We’re ALL busy, Mike…it’s understood!
Sandy: Kim, after your story, I’ve no reason at all to panic. It’s a very
big country…..all those choices.
Al_Lee: I recall Mike talkign about a great rack of lamb dinner he had
one Monday. I just had butter beans and chicken! That was fantastic. Now I have
aglass of wine and I’m playing Dean Martin on the MP3 - mellow !!!
Kim-OH: Sandy, yes and our prices and challenges are different from yours
Kim-OH: Mike, how is your Mother doing, by the way?
wai: Sorry to hear that Kim.
Mike_Summey: We have several new people tonight. I hope you will all
become regulars in our chats. The more people we have the more information is
shared.
Kim-OH: wai, thanks it’s just another one of life’s little challenges
grrr
Sandy: Wai….I think you’re right….it is tax deeds…..the name of the
website was tax liens. I just remember a gal who logged on and a month later she
bought one.
Kim-OH: wai, I’m glad that you found your way over here, never mind the
pun, how’s your dad?
Mike_Summey: Kim, she got a 100% clean bill of health this week. No
chemo! No radiation! They got it all! Thanks for asking.
Kim-OH: Mike, that’s great and is she recovered from the surgery?
wai: Sandy, I think it’s a good investment vehicle. It’s very passive and
it may not be fit for a lot of ppl since your money parks there.
jlbburn: That’s great to hear
wai: little bit hard to liqudate
Al_Lee: Someone mentioned flibbing earlier. The longer I am in this line
of investing (ove r30 years so far) the more I believe that the folks who make
the most money in the flipping business is the hard money lenders. that also
goes for building unless you are one of the giant construction companies.
Al_Lee: Mike, that is good news about our mother.
jlbburn: My mother just started a second round of chemo yesterday….I
know how hard that can be
wai: Kim, my dad is in mainland china now. he’ll be back again after the
chinese new year.
Mike_Summey: Kim, yes she is doing well. Got her drain tubes out the
first of last week and my sister came up from Atlant over the weekend to get her
and take her to stay ther for a month. That helps me a lot.
Mike_Summey: Hi jgwin1
Kim-OH: jibburn, sorry to hear about your mother, how is she holding up?
Sandy: One of my neighbors is wanting to move to Austin….says the
weather is similar to SoCal. I checked rents quickly….very affordable….about
$500…..is this accurate info? Brochures I have from a REI club show reasonable
housing about $130K.
Kim-OH: Mike yup those little breaks help and it’s good for your Mother
to have such devoted kids
Al_Lee: Sandy, you can buy a nice hosue in Austin for 130k
Mike_Summey: Sandy, sorry, but I don’t know much about Austin. Maybe Al
can help with that question.
Mike_Summey: Hi Eddie
Kim-OH: Hi Eddie-WV
shashgo-CT: Richie good advice
Al_Lee: Yep, Austin is a beautiful place and very affordable
Kim-OH: wai, I think I knew that your dad was back on the mainland
Eddie-WV: Hey Mike…hey Kim!
shashgo-CT: ritchie ill look for one.
Eddie-WV: I’ve been away for a few weeks but glad to be back on…
Mike_Summey: Eddie, we’re glad to have you back. We’ve missed you!
Sandy: Hi Al….I missed you last week. I’m not a cowboy type or a
college kid, but the info I saw looked promising.
shashgo-CT: Mike can you tell me how you thought the property that you
got for 600 was worth buying? I mean, what do you look for
Al_Lee: I don;t own anything in Austin because rents are lower than in
Dallas/Fort Worth for a comparable-priced property, so the ROI is better in dfw,
but Austin is a nicer place to live if you like rollng hills and rivers and
stuff like that
wai: yes kim, he’s been up to some stocks thing again. I spoke with him 3
days ago and he’s having a vacation with his sisters.
Al_Lee: Sandy, I am glad if I could answer any questins you had
Kim-OH: wai, sounds like dad is having a good time
Mike_Summey: Al, I took Carleton on a scenic flight yesterday over the
mountains of wnc. It’s hard to sight see in a plane that you can’t keep under
about 150mph.
Kim-OH: LOL @ Mike
wai: Yes, I am still encouraging him to buy some rental properties in
China, the chinese gov’t put restrictions on price, so the condos there cashflow
pretty well.
Sandy: I do Al. So for my first house, if I live in it for a bit, so I
can build equity, then move up. I just can’t picture myself way down in Texas
though.
shashgo-CT: can you recommend any books to learn about how to valuate
properties.
Al_Lee: Mike, Aha! That is one of the benefits of the C-177 I had, you
coudl see everyting at abotu 80kts
Eddie-WV: Mike…it’s my turn next! haha!
Larry_NC: Mike, Are the leaves in fall color now?
shashgo-CT: Mike what do you do wih the properties that yoiu have> do
you rent them out
Mike_Summey: Leaves in WNC are now at the peak. A little late this year.
Kim-OH: wai, is he listening to you?
Larry_NC: Raleigh has changed colors this week
Sandy: On the other hand, I’m willing to do dfw if I can afford it, stay
here and rent a room until I get a cushion. I’ve got to start somewhere.
Al_Lee: shashgo, if you go to my website you can download a free tool
that might help you Go to www.TurnkeyInvestments.net and click “Spreadsheet
Help” and read the directions. No charge.
Mike_Summey: shashgo, yes I rent everything. No non revenue producing
properties.
jlbburn: Mike, I’m looking at a small office building (4,200 SF) that I’d
like to locate my offices in. It’s in a strong area and I’m not to concerned
with liquidity. Assuming that I can buy it with the noi, are there certain
things I should be looking for?
Al_Lee: Larry, not here, but maybe in Austin
wai: not likely, in fact, i probably need to go there and investigate a
bit before i put up any $.
Al_Lee: Sandy, what are you interested in doing in dfw, investing?
Living?
Kim-OH: wai, good idea, you know you have to understand the situation
thoroughly
wai: especially the legal systems there is a whole lof different.
Al_Lee: We just got a lot of the Louisina evacuees and they are fillng up
al the vacancies.
Sandy: I’d rather be an investor in dfw
Kim-OH: wai, yes indeed and you don’t want to run afoul of that
ritchie: Shasgo, have you read Mike’s book?
Mike_Summey: jlburn, if you can buy for the noi you will be fine. Also,
keep in mind that the rent you will save for yourself should be figured into the
equation. $1000 saved is the same as a $1000 earned.
wai: you can still buy a luxury condo in ShanPing for less than US
30,000.
Sandy: Al….isn’t that good for the investors
Kim-OH: wai, yikes take me with you
Al_Lee: Sandy, go to the website I referred to above and you will get a
very good idea of the prices and rents here. I own most of my own properties in
the d/fw area because it give better returns
Kim-OH: Hi zert
Mike_Summey: Hi zert
Al_Lee: Sandy, yes, it is good for investors
Kim-OH: wai, now that is long distance investing
zert: hi Mike, kim-oh and all
jlbburn: There’s a gas station next door…do you think a clean phase 1
is enough “insurace” or would you consider that a no go?
Mike_Summey: zert, where have you been? We’ve missed you!
Sandy: Al…..I’ve been visiting your website for quite some time.
Al_Lee: wai, yes, but what can you rent that condo for?
wai: you bet, i think the rental income can generate almost 12% return,
which is not bad.
Mike_Summey: jlburn, I’d be comfortable with a clean phase 1 unless I had
reason to doubt it.
zert: Mike - Monday;s are difficult nowadays, but I always read the
transcript thanks to Ralph!!
Kim-OH: wai, if you invest there you have family to help you manage which
is a plus
Ralph_Roberts: a pleasure to do it for ya, Zert
ritchie: Mike, do you know anything about Lake James? The waterfront lots
there are through the roof.
Mike_Summey: Ralph is our hero. He doesn’t get a lot of credit, but he
does a great job.
Kim-OH: Ralph thanks for the great job that you do!!!!
Ralph_Roberts: I tries, and sometimes I am just trying. 
Al_Lee: Ralph, I will name my next son after you
wai: Kim, although there isn’t much management, but I try not to have my
family to do the work.
Sandy: There is a little sound icon at the bottom of the screen….is
there a way of an audio chat?
Ralph_Roberts: good, Al
Mike_Summey: ritchie, I used to go to Lake James every weekend and camp,
but now I don’t know much about lot prices. I don’t think lakefront lots are
something a Weekend Millionaire would be interested in anyway.
Kim-OH: wai, then would you hire someone to manage for you?
Al_Lee: Ralph, I should mentin my vasectomy a few years ago.
Mike_Summey: Al, you’re too old to have another son.
Ralph_Roberts: then it will be even more of a miracle, Al.
Kim-OH: Al, Mike, you two are too funny
Kim-OH: Where is Roger tonight?
ritchie: Mike, it’s totally non-weekend millionaire. But the recent
appreciation makes the very tempting
Eddie-WV: Mike…how many properties do you own now?
wai: Kim, about 20 bucks a month. It’s about 1 hour by train from Hong
Kong, and many people treat that as a second home for the weekend.
Mike_Summey: Kim, Al is funny, I’m just a simple country boy.
ritchie: along with the demographic trends that make demand likely for
the forseeable future
Mike_Summey: Eddie, several hundred.
Al_Lee: My 60th birthday is in December and I am gon to Las Vegas Dec 2-5
(mgm Grand) to celebrate. No party, just a long weekend. I had a big 50th party
and I don’t care to have another big one. You are all invited. Buy me a drink
(or cover my losses) if you like
Kim-OH: Mike, you are not simple
ritchie: Mike, have you ever invested in coastal property?
wai: you can hire a maid for 200/mo. so it’s not bad at all for them as
primary home.
Kim-OH: wai, that sounds good and greatly possible
Mike_Summey: Al, I’ll join you at 60 in January.
Mike_Summey: ritchie, NO! And I won’t be either!
Al_Lee: Mike, fly to Las Vegas in December and I’ll buy you a drink.
Eddie-WV: Mike…I’m January 14th…you?
Mike_Summey: Eddie, I’m January 26
Kim-OH: Mike, where is Roger tonight?
Mike_Summey: Sandy just got bucked off!
Al_Lee: I will hit 60 on December 11. It is cool to get that far and be
in good health. I fell like I;ve cheated fate.
wai: lol, welcome back Sandy.
Sandy: Hi….I’m having a lot of trouble staying on tonite.
Mike_Summey: Al, why do you look so much older than me?
jlbburn: Gotta run. Mike….thanks for giving your expertise so freely. I
love your writing and consider the oppotunity to bouce a question off of you a
great resource. Talk to ya soon!
Al_Lee: Mike, you must live right.
zert: SAndy - you need to fasten your seatbelt!!
Kim-OH: Sandy, I had trouble getting in but not staying in
Mike_Summey: Thanks jlburn, join us again as soon as you can.
Kim-OH: night jlbburn
jlbburn: night
ritchie: Mike, do you still make offers?
Sandy: It must be all that airplane flying around…I’ll buckle up this
time’
Al_Lee: Hi, Bob
Kim-OH: Sandy, I’ll give you a roll of duct tape LOL
Mike_Summey: I’m looking at a property very clsoe to my residence. It’s
going to be a very difficult one to make the numbers work, but I’m trying.
Al_Lee: Didn’t notice you logging in unitl now
Bob_Carr: Hey Al
Eddie-WV: Mike…any update on the software we talked about several weeks
ago? For figuring offers…etc.
zert: talked to a guy today who bought 15 properties, Most of them he
didn’t even look at. He has no idea what they are, or what to do eith them.
Sounds like a trainwreck waiting
Sandy: Thanks Kim….whatta pal :/
Kim-OH: Hi Dave
Kim-OH: Sandy, you’re quite welcome
Mike_Summey: Eddie, we’re very close to having it ready. I sent the final
comments to the programmer yesterday. We talked today and both of us hope to
have it completed within the next few weeks. We just want it to be right before
we offer it our subscribers.
DaveNRichmond: Mike have you ever taken on a property and had it turn out
to be a loss for the firt year or so?
Mike_Summey: Hi Dave
zert: now he wants to sell some to get to a manageable number!!
Kim-OH: wai, have you been going into the cre chatroom?
Eddie-WV: Fantastic! Can’t wait to use it. What will the price be to
purchase?
Mike_Summey: Dave, yes I’ve had a few like that where I missed the
numbers when I estimated the costs, but fortunately I never missed far enough to
cause me to have to sell one to get out of the negative cash flow situation. All
of the very quickly became income producers.
Kim-OH: wai, have you been chatting over at cre?
wai: Kim, may be once a week, but I don’t see that many ppl there.
DaveNRichmond: I’m pushing numbers right now on one we rehabed. we were
gonna sell but looks like we missed the prime market and are thinking of putting
a renter in it.
Kim-OH: wai, yes the character over there has changed again but it will
come back at some point
Kim-OH: Hi Mark
wai: ok kim, sounds good.
Mike_Summey: Eddie, we haven’t decided on that yet, but I’m guessing
somewhere under $69.
MarkNC: Hi everyone, sorry I’m late
Mike_Summey: Hi Mark
Larry_NC: All of Mike’s stuff is $10
Kim-OH: Mark, you are in trouble now LOL
DaveNRichmond: I’m afraid we will just break even on it if we put a
mortgage on it and rent it out.
Mike_Summey: Larry, are you saying we’re cheap?
Larry_NC: Affordable
Eddie-WV: Great! I’ll give you $70 for an autographed copy! haha!
Kim-OH: Mike, I think what Larry is saying is that you are affordable and
value priced
Mike_Summey: DAve, breaking even is not bad when you understand that the
longer you own a propety the wider the margins get.
Kim-OH: Dave, think of it this way, your tenants will pay down the
mortgage
DaveNRichmond: Yes I know. just not what I had planned
Eddie-WV: Phrase to live by…”stay the course”.
DaveNRichmond: I could have put less into it and rented it out for less.
Kim-OH: wai, my friend, it’s very good to see you again. I have to run
now grrr
DaveNRichmond: It is like new right now.
Mike_Summey: I had a discussion with Carleton today about what the future
holds for real estate investors. I told him that I see a growing trend toward
the Weekend Millionaire method of investing rather that the get-rich-quick
buying and flipping method. What does everyone think about this?
wai: Kim, you take good care, I drop by cre more often.
zert: Dave - you probably would have had to put $$ at some time, now you
can charge full value
Penny: goddnight all
zert: sounds good to me Mike!!
Kim-OH: wai, I’ll try to get there more often too then my friend
Eddie-WV: Mike…have you taken cash out of any of your investment real
estate to cover personal expenses?
Kim-OH: ght Penny
DaveNRichmond: Mike, I think we are going to see a lot of road kill in
the next few years.
MarkNC: Mike, I see it that way as well. I think construction/rehab costs
are going to make flipping much less lucrative.
Eddie-WV: Mike…I agree! Some markets will still be hot for flipping but
the vast majority of the country is for renting!!!
Mike_Summey: Eddie, not until 1997 and since then, I’ve lived totally on
income from my proerties.
Kim-OH: wai, take care of yourself and I’ll see you here or at cre
wai: good night kim>
Mike_Summey: Dave, I agree
Kim-OH: night all see you in two weeks
DaveNRichmond: Hate to say it, but that’s good for us.
zert: If I have a tenat paying the mort for 20 years, when I retire that
will be free cash
DaveNRichmond: plan to keep buying…..not this week, but keep buying
just the same.
Mike_Summey: Hi Gary
DaveNRichmond: right now I’m sitting on too much inventory
Eddie-WV: Mike…so for a beginning investor would you consider it not a
good idea to take equity from your properties to cover personal debts?
wai: Mike, isn’t that landlord has been keeping the rents low in order to
attract tenants from “owning their own home”?
Sandy: Mike…..I think of your situation several times a week…..that
is so motivating….my idea of a way to enjoy your life.
Al_Lee: I believe that flippers adn rehabbers and builders make a lot of
money–for bankers! The terms and rates that bankers get for constructin money,
interim money, brigdge loans, etc. is outrageous
wai: if so, I guess the weekend millionaire approach would be better,
especially in the next couple of year while the interest rate on the rise?
garymgiffin: Hi Mike.
DaveNRichmond: Al, I agree. I don’t think I’m likely to do hard money
again unless it’s a “sweetheart” deal for me.
Mike_Summey: Eddie, in the beginning think of your real estate as a
401(k) account and leave it alone. Let it grow and mature before you start
taking money out. Let you job provide your income while the real estate
investments grow. That’s what I did and it has served me very well.
ritchie: Eddie, would you take money from your retirement account to pay
for personal expenses now? Then way tap your equity in your portfolio?
DaveNRichmond: Hey MIke, Al, has all this recent “eminent
domain” crap got you edgy?
ritchie: Mike, I like the way you think 
Al_Lee: I will bet that Mike makes a lot more money on the houses he owns
than the guys who built them or sold them to him. That is why he never sells.
Mike_Summey: wai, I’m not sure what you are asking.
Al_Lee: Dave, good question. A good reason to stay well leveraged. If
some government crook wants to take a property, they can argue with the bank,
not me.
garymgiffin: I am from Louisiana. The real estate market is crazy after
Hurricane Katrina.
wai: Mike, you asked if the Weekend Millionaire approach will be more
accepted by investors than the get-rich-quick pitch?
Mike_Summey: Dave, I’m not too concerned with it, but I am a strong
believer that zoning is bad and restrictive covenants are good.
DaveNRichmond: That is a point. It occured to me because the last one I
bought is directly across from a fire station, and I have a huge lot. big enough
to build another house or duplex on….just wondering what happens if the city
decided they could put my lot bo better use than I.
Mike_Summey: Gary, give us some examples.
ritchie: Wai, rents are low because there are more landlords with
property available, and fewer quality renters in the market. Most quality
renters would rather own. Add to that low interest rates and tax laws since the
late 90s that create an incentive to rent you previous house for a couple of
years.
Mike_Summey: Gary, do you know Mark Conti?
garymgiffin: No.
DaveNRichmond: Oh sorry guys. boy has a tick on his leg gotta go.
DaveNRichmond: gnite
DaveNRichmond: “crisis”
ritchie: Wai, a good place to be is to own rental property with low fixed
rate mortgages. As the rates rise, rents will to but your costs will be fixed.
Mike_Summey: Mark runs, or ran a taxi service in New Orleans.
Al_Lee: ritchie: Very good! That is my philosophy
garymgiffin: Houses are in high demand and are selling for much more than
market value.
garymgiffin: There are NO rentals available at this time.
wai: thanks ritchie
Mike_Summey: The recent low interest rates have enabled many quality
renter to qualify for home loans and as a result, the rental market has softened
and the quality of renters has declined. The recent rate increases will improve
this situation.
Mike_Summey: Anyone else have any questions?
MarkNC: I had a new situation this weekend. I went in one of my houses
that is rented to college students and they had put up a climbing wall in the
basement. I was really mad at first but once I looked at it, it was completely
free standing except for two screws into studs and was really well built, I
couldn’t see any real problem with it as I thought about it. Anybody see why I
should worry about it?
ritchie: Mike, regarding your conversation with Carleton Sheets, I agree
with you. But if you visit a rei, there are still a lot of folks talking up
“subject to”, lease options, wholesaling, etc, and all the myriad ways
you can supposedly make money in real estate.
Mike_Summey: Mark, not really as long as there is no significant damage.
Eddie-WV: Goodnight everyone…nice talking to you Mike!
wai: So if you are buying in for long term… as the interest rate rises
and renters have harder time to qualify for a loan. Your rental houses get
better occupancy & less vacancy.
zert: Mark - is there any additional liability?
MarkNC: I don’t think there will be any damage. Zert, I think the
liablilty is theirs. I didn
MarkNC: t provide the wall so its just like a piece of furniture right?
Al_Lee: Well, it is time for me to go tend to family matters.
Al_Lee: Mike, Ralph (my hero), goodnight
Ralph_Roberts: see ya Al
MarkNC: Good night AL
ritchie: Mike, as always, thanks for hosting.
Al_Lee: Bob, stay in touch
Mike_Summey: ritchie, I agree with you, but I believe that this is the
tail end of a trend rather than the beginning. I think the Weekend Millionaire
method of investing is the growing trend as more and more young people doubt
that Social Security will be there when they retire.
Mike_Summey: Goodnight al\
Al_Lee: Everyone. See yo next chat or so.
Mike_Summey: I’m going to call it a night as well. Goodnight all.
ritchie: Mike, the weekend millionaire method is the timeless method :-).
ritchie: Everything else is trendy, as you point out
wai: good night.
Larry_NC: Goodnight, Mike
Ralph_Roberts: chat will be posted shortley
Ralph_Roberts: good night all
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