Chat 11-21-05
Posted on November 21, 2005
JoeDio: Anybody here??
mebrown: Hi Joan
Mel: Anybody here?
TJ: Am I connected to the chat room?
TJ: Can anyone confirm if I am connected to the chat room? I have never been on a chat line before so I am looking for confirmation.
Ralph_Roberts: Greetings all! .. and hi, Joan… glad to see you made it.
Ralph_Roberts: TJ, you are connected.
TJ: Thanks!
Ralph_Roberts: JS, Mel, and SNB, you guys are fine, too. :>
Ralph_Roberts: *choochoo*
Ralph_Roberts: Mike and/or Roger will be along shortly.
Ralph_Roberts: We are greatly informal, so feel free to chime in at anytime.
Mel: Great
TJ: Ralph, Are we communicating with Mike and Roger only, or everyone else on the chat line too?
Ralph_Roberts: TJ, anyone.
Mel: Not sure what you mean. This is my first time.
Ralph_Roberts: We’re all here to learn from each other … welcome, Ritchie
Mike_Summey: Wow, looks like I’m late.
TomB: Hi everyone
SNB: I am here and watching/listening
Ralph_Roberts: and here’s Mike Summey !
ritchie: Hi Ralph, Hi Mike
ritchie: Hi everyone
ritchie: Mike, how was the seminar?
Mel: hi
Ralph_Roberts: hi Mel
Ralph_Roberts: welcome TomB
Mike_Summey: Hi Dean
Ralph_Roberts: Dean! hiya
Mike_Summey: Hi Dean
Dean-nc: Hi Guys
Mike_Summey: Hello
Ralph_Roberts: and I’m not saying it’s raining hard here but I just saw Mike’s hill with his big house on it go floating by
Ralph_Roberts: ;>
Mike_Summey: Ralph tend to exagerate a bit occasionally.
TomB: I’m in NYC and the rain is coming
Ralph_Roberts: nah heh, heh
Dean-nc: We are getting a little out here in Weaverville
Ralph_Roberts: hi bob…. and there’s Roger Dawson !
Mike_Summey: Looks like we have some new people in already. Welcome everyone.
Mike_Summey: Hi Roger
ritchie: We’ve had quite a lot in Raleigh. We’ve desperately needed it.
Roger_Dawson: In was sunny and 80 degrees today in Los Angeles. No rain!
Bob_Carr: Hi everyone
Mike_Summey: I saw on the Weather Channel yesterday that Asheville was 7″ behind for the year. We’re catching up quickly today.
Mike_Summey: Hi Bob
Roger_Dawson: Mike, how did your seminar go on Saturday?
Bob_Carr: Hi Mike
Mike_Summey: Roger, it went well. I think some of the people in the chat now were in attendance. maybe they can give you a better assessment of the seminar.
Roger_Dawson: Mike being modest! What next?
Mike_Summey: I’m always modest Roger.
Mike_Summey: know that.
TomB: Mike, was it the same sminar you gave in CT earlier this year?
Mike_Summey: Tom, basically yes.
Mike_Summey: Bob Carr flew all the way from Baltimore to hear it again for the second time.
TomB: Everyone should attend. Its well worth it
ritchie: Mike, when are you coming to Raleigh again?
Mike_Summey: ritchie, whenever the group ther invites me.
ritchie: aha. I guess I’ll need to have a talk with them
Mike_Summey: Hi Larry
Larry_NC: Hi, Mike and Roger
Mike_Summey: Anyone have any question tonight.
JS: i do
Mike_Summey: Go
JS: how do you all deal with liability insurance for rental properties?
TJ: Not sure if I should start but here goes - I recently finished reading Weekend Millionaire’s secrets to Investing in Real Estate. In the early chapter mention of Net Operating Income (noi) it mentions having payments (P&I) less than or equal to noi. I understand that. But later in the book on details for single family homes, while the basic calculations on NOI do not change, the book adds some twists. In one case there is discussion on subtracting interest only from NOI and in another deducting a return on investment on the down payment. It confused me some. I finished the book wondering bottomline, what am i shooting for - NOI compared to exactly what. I need some help.
JS: how much do you get
Mike_Summey: TJ, JS, Mel, Joan…where are you guys & gals from?
TJ: Sorry I interupted.
Bob_Carr: Mike,I made a 0% percent interest offer today for a property,property is pid for,folks moving to florida
JS: JS- San Francisco
ritchie: JS, I have a personal umbrella liability policy that goes over and above my basic coverage, up to 1 million
Larry_NC: Mike, I talked to Joe that books speakers for Ral. He said you have a 3rd book for next year and you are coming then
ritchie: JS, Most books and agents will recommend that much
JS: how much is something like that
Bob_Carr: Hi Joan,glad to see that you joined in
JS: Ritchie, my properties are in Texas, do you have someone I can get a quote from?
Mike_Summey: TJ, NOI is the money left over after covering all expenses except debt service and the return on investment you want on the cash you put into the deal. You have to subtract the amount you expect to receive on the cash investment you make and then structure the offer so it will keep within the remaining noi. Does that help?
ritchie: JS, sorry, I’m in NC
Roger_Dawson: T, the objective is to break even or better after you’ve deducted maintenance, interest, taxes, insurance and management. If you can also get a return on your down payment, that’s so much the better.
Mike_Summey: Bob, keep me posted on how the offer is received.
ritchie: JS, I’d recommend the basics - shop 5-6 agents and find someone you feel comfortable doing business with.
Mike_Summey: Hi copper
Roger_Dawson: Hi Kim
ritchie: JS, I use Nationwide. Mike recently had a guess on the chat from Nationwide as well.
Mike_Summey: Hi Kim
Kim-OH: Hi Roger, we missed you a couple of weeks ago
Kim-OH: Hi Mike, how’s it going?
Mike_Summey: Hi sidarcy
Roger_Dawson: I was up in Niagara Falls Canada doing a seminar for a bank
TJ: Sort of Mike. You have noi. I understand the spreadsheet. But when estimating I have a net positive deal, do I need to subtract P&I from the noi?
Mike_Summey: Hi Wes, sorry I missed you earlier.
Kim-OH: Roger, that’s awesome
Mike_Summey: TJ, the NOI is what you will use to pay the p&i.
Wes_Shields: Hello all
TJ: Got it.
Mike_Summey: TJ, any deal you can make that the NOI will cover is a good deal.
TomB: TJ, after subtracting P&I from NOI the worst you shoul be is 0.
ritchie: T, the reason you subtract the return on the down payment, is you have to factor the opportunity cost of NOT investing the down payment elsewhere. What return would you expect if you invested in bank cds, treasuries, stocks, etc? You should hope to get that same return on your real estate. If your real estate breaks even but you had to put 20% down, you are missing out on higher returns elsewhere.
TomB: Anything more is return on investment
Mike_Summey: See TJ, in these chats you get information from everyone. Isn’t that great?
TJ: You mention in later chapter, not only subtracting the P&I from the noi, but also subtracting a return on the down payment - correct?
TJ: This chat is very helpful.
Kim-OH: Hi Kerry
Kerry: Hi there
Mike_Summey: TJ, that’s correct. If you invest your cash in a piece of property, you want to get a return on the money don’t you? When you substract the return you want from the NOI and then structure the rest of the deal to stay within the NOI the amount you subtract is the return on your cash that you will get to keep.
Mike_Summey: Hi Kerry
Kerry: Hi there, Mike.
Mike_Summey: Hi sandy & JoeDio
Mike_Summey: Hi Zert
Kim-OH: Hi Zert
Ralph_Roberts: hi Zert!!!
Mike_Summey: Zert, you’ve been absent for a while.
zert: Happy Thanksgiving everyone!!
sandy: Hello all
Mike_Summey: Hi Doug
Doug_in_CT: Hi Mike, Ralph, Zert, Kim, et al.
Kim-OH: wb Doug
zert: Mike - change of work schedule but I read the transcripts
Kim-OH: Hi Penny
TJ: Was something mentioned earlier about needing liability umbrella above normal homewoner’s insurance on a rental house?
Ralph_Roberts: Hi Penny!! Hi Kim!! Yo, Doug!
Mike_Summey: Hi Penny
Penny: Hi Kim.
JoeDio: Hey everyone
Penny: Hi Ralph, Mike and everyone
Kim-OH: Hi Ralph!!!!!! Pfff, I thought you weren’t going to chat with me tonight LOL
Penny: Hi Bob. Hope your trip back was a smooth one.
Mike_Summey: TJ, you don’t need homeowner’s insurance on an investment property. All you need is fire and all risk coverage…much less expensive.
ritchie: TJ, yes. Most professionals recommend 1 million in a PUL (personal umbrella liability) policy, to protect your ass(etts)
Kim-OH: Hi Brian
Mike_Summey: Hi Brian
Brian-ON: Hi Guys!
ritchie: Mike, can you elaborate and explain the difference? How much do you save?
Bob_Carr: Penny,I took your advice and switched my diet to a gallon of ice cream and a six pack of beer for dinner !
TomB: Yum
ritchie: TJ, once you become a landlord, you can be a potential target of lawsuits. I have a friend who was found to be liable because someone was walking the dog in front of their rental house, and the dog came on the property and bit someone.
zert: I attended a “free” seminar the other day, all I got from it was yelled at and a deal to buy more training for something like 2 grand!!!
TJ: Thanks for the advise. I will look into insurance. I have two rentals with homeowner’s insurance. Sounds like it is the wrong thing and expensive and not enough coverage where really needed.
Mike_Summey: ritchie, homeowners insurance covers your contents and everything. In a rental you don’t have any contents so why pay for coverage on something you don’t own. An investor policy covers your investment in the property only. You can also add loss of rents coverage to the policy and liability insurance. The personal umbrella is over and above the coverage you have in the fire and all risk coverage policy.
Kerry: zert, I guess you got what you paid for?
Penny: Sounds great Bob. Did you remember to get Lite beer?
copper: How many of you have an LLC
Penny: just kidding
Kerry: I have just one LLC
zert: Bob_Carr - Beer and Ice Cream don’t mix too well if you get what I mean!!!
Kim-OH: Zert, what a coincidence, I Attended the oreia convention last weekend, it was a great opportunity to network with others from around the country.
ritchie: One big turnoff to a speaker at a REI meeting is if they turn it into an infomercial. Nothing wrong with plugging your products, but some of these guys go overboard, usually at 9:30 at night when you want to go home, or network with other investors.
Doug_in_CT: I have heard Dolf talk about “self insuring” when you get a lot of property. The idea is lets say you have 10 houses and they all are costing you about $100 a month. So you decide to drop the coverage and get an extra $1,000 in cash flow per month. Then you do that for a couple of years, say 5 and you save $60,000 and now you have the money to cover the cost of a total loss to fire. Sound risky?
Mike_Summey: copper, I hold all of my properties in llc, but not for the reason you may think. I do it for estate planning purposes, not liability protection.
TomB: Doug, it sounds risky to me
zert: what if you have a fire before the 5 years is up???
Roger_Dawson: Doug, that sounds very risky to me. I’d suggest raising your deductable to get the cost down, so that you’re partially self insured.
ritchie: Doug, that sounds not only risky, but foolish :-).
Larry_NC: Kim- I was wondering if you are from Vena country?
TomB: Depending where you are you ma not be able to replace the property for 60G
Mike_Summey: Kim, I’ve heard that the oriea group is quite a large group.
copper: I’m new to this were can i find out about estate planning
Kim-OH: Larry, you are right on target I am in Vena country
Kim-OH: Mike it is a good sized organization and the convention is the largest in the country as I understand it
ritchie: Copper, I’m going to start an LLC so I can begin deducting travel and other expenses searching for investment properties.
Doug_in_CT: Yeah, I think it is risky too, but as the portfolio grows, I think the appeal does too.
Mike_Summey: Doug, in NC the cost of insuring a $100,000 property is around $300 per year. The $100 per month figure sounds more like homeowners insurance.
TomB: ritchie, do you need an LLC to deduct expenses?
Bob_Carr: Roger,let me know in the future when you are having a seminar on the East coast
Brian-ON: Question for Mike/Roger….I have a bungalow with a basement appartment that does not have separate meters. I’ve given ownership to the utilities to the upper tenants. The lower tenants are paying their bills on time and were giving their cheques payable to the upper tenants. Problem began when we found out the upper tenants wern’t paying the bills. They finally paid the bills current just not long ago…now the lower tenants pay their bills via cheque payable to the utility company but still give it to the upper tenants. Problem is..I have no way of knowing if these bill are paid and kept current. Mike/ Roger..is there any better way to deal with this situation?????????????????
Mike_Summey: copper, a good estate planning attorney would be a good place to start.
Kim-OH: I can get a comprehensive homeowners policy for about 40 bucks a month
Larry_NC: Kim, We had her team in Raleigh in October for Tuesday meeting and Saturday Seminar
Roger_Dawson: Copper, re estate planning. My wife and I hold everything in two separate living trusts. If I die, she instantly becomes the owner of the trust and vice-versa. It avoids probate and it’s a smart thing to do.
ritchie: Tom, usually you can deduct expenses for a property against the income. I’m looking for a way to deduct mileage, property inspections, etc, on the properties I don’t buy.
Mike_Summey: Kim, maybe you could mention me to the oreia group. I would love to speak at one of their meetings.
Roger_Dawson: Bob, will do. Thanks for your interest.
Kim-OH: mike I was wondering why you hadn’t spoken to our group in the past
Larry_NC: Mike, I plugged you at National reia in Orlando. You will be real busy
Kim-OH: Larry, what did you think of Vena?
Mike_Summey: Brian, never, never, never let a tenant be in charge of paying your bills. Use a professional management company and put them in charge or do it yourself.
copper: Roger if i’m thinking right i read somthing about putting the property is another name like the hicks family trust (past owner) so when a lawyer wants to sue you he doesn’t find much. but you own the trust
ritchie: Doug, do you own the properties outright? Does the bank not require hazard insurance?
Mike_Summey: Larry, when was this?
Larry_NC: She was good, I have been listening to her CD’s. I buy and Hold. She talks about Wholesaling
Mike_Summey: copper, that doesn’t work. Any attorney worth their salt can find out who is behind the trust or llc.
Brian-ON: So I’ll take over the utilities right away Mike!
Larry_NC: Mike, National was in July
Doug_in_CT: Ritchie, I was just describing someone’s risky strategy, But you bring up a good point. If you are borrowing money, you have to keep your insurance up.
Roger_Dawson: Copper, I think that an agressive lawyer could break through the trust. Better to have insurance and avoid doing anything that gets you sued.
TJ: I Colorado I am paying about $300 per year. $311. It is rental Dwelling Policy (opps! Not homeowners). Dwelling, Personal Property, Loss of Rent, business liability $500,000 per occurance and$1,000,000 annual aggregate plus $5000 medical each person. This sound like the coverage I should be getting?
Mike_Summey: Brian, get the check from the tenants and you pay the bills. If you are responsible for them, any late payments, etc. can affect your credit.
Brian-ON: Thanks very much Mike! I’ll let you know how it works out!
Brian-ON: You’re the best..honest.
Mike_Summey: Thanks
Larry_NC: Mike, Joe Kenney said he has talked to you about coming back to Raleigh
Brian-ON: Thanks very much once again Mike. Now I have to get on top of this problem!
Brian-ON: Good Night!
Kerry: So, anyone investing near the GM plants? Hard times coming in those locations…
Kim-OH: Goodnight Brian
Mike_Summey: Goodnight Brian
ritchie: Mike, suppose you want to purchase from a retiring landlord. He’s open to seller financing but would make the loan balloon in 5 or 7 years. How do you persuade him to extend it to a 20-30 year term?
Kim-OH: Hi DaveN
TJ: GM annouced 30000 people to be laid off
DaveNRichmond: hey there all
Mike_Summey: ritchie, if the deal is right go with the 5-7 year balloon. If you perform as agreed, you will be able to refinance and pay him off at the time or he may extend the time.
Mike_Summey: Hi dave
Kim-OH: Hi jlbburn
Mike_Summey: Hi jlburn
jlbburn: Hey, Mike…how are you tonight?
DaveNRichmond: I locked a 30 year conventional today at a killer rate
ritchie: Dave, how much?
Mike_Summey: Great DAve, tell us about it.
Kim-OH: Dave, which lender?
jlbburn: GoodHi Kim
TomB: Mike, can a bank waive PMI if I ask them to?
DaveNRichmond: Quicken
jlbburn: ooops
Mike_Summey: Tom, when the loan to value drops below 80% you can usually get the PMI waived.
jlbburn: What part of the country are you in, TJ?
JoeDio: Hi Mike, how are you? I live in Canada and was wondering if the WeekEnd Millionaire would work. To be precise I Live in Quebec!
TJ: I am in Green River Wyoming but have to rentals in Grand Junction, Colorado with a property manager.
Roger_Dawson: Mais oui, Joe!
Doug_in_CT: Well I am the proud new owner of a lovely 3 bedroom ranch in my area here and my new tenants are just delighted. I have good cash flow, great tenants and I was about to buy at $11,000 below current appraisal. I did get stuck in the middle of the deal for awhile. I had my earnest money on the line and finally had to raise my deposit from 10 to 15%. Apparently my credit expired in the course of the transaction and repulling my score dropped because of an error on the report. While we were able to prove it was an error, time was of the essence and the seller would not let me extend, my tennnat was ready to move in, so we put the extra 5% down to get out of a jam.
TomB: TJ, how far apart are the two cities?
sandy: TJ, how do you like living in Wyoming?
jlbburn: …big GM towns?
TJ: 280 miles
DaveNRichmond: Hey Mike. I’m trying to establish professional relationship with an appraiser. Want to give him my business to get an little heads up when good things come up that he sees. It’s worked well for a friend of mine. How do I get the bank to let me choose the appraiser?
TJ: Like visiting your neighbor in western terms.
Mike_Summey: JoeDio, the techniques in the Weekend Millionaire will work anywhere. No matter where you live, if you can buy properties that will generate enough income to pay for themselves you will make money. When markets are very hot seller’s markets it is difficult at times, but with patience you will find deals that work.
Kim-OH: Hi dobefan
Mike_Summey: Hi dobefan
zert: congrats Doug!!!
jlbburn: Dave…technically, a bank can’t “let you choose the appraiser”.
DaveNRichmond: Hmm.
jlbburn: I’ve been appraising for 16 years and have owned my own firm for 8.
Mike_Summey: Dave, I don’t thin you can. The federal guidelines now require the banks to engage the appraisers and they have approves lists of people they work with. They will usually put the appraisial out for bids to their approved list.
TJ: Since I read your book after I bought my rentals, I can tell you what your book says not to do and you are right!! I have negative cash flow. My NOI does not pay my payments so it will self-limit future purchases until I get this turned around or at least make better deals in the future!!! The book really will help.
Doug_in_CT: I have been finding that my mortgage broker, likes a certain appraiser, and when I saw his appraisals I began to like him too. So I have been using the same appraiser and letting the mortgage broker explain it to the banks.
Larry_NC: Mike, Suntrust Mortgage can now do 30 year Amortized/ 5 year balloons- I’m paying 6 1/8% in my LLC name- Doesn’t show on credit report
Mike_Summey: TJ, jsut be paitent and the negative cash flows will eventually correct themselves unless you really screwed up.
jlbburn: Typically, appraiser/investor relationships don’t last…..at least when the appraisals are for mortgage financing.
ritchie: Larry, that sounds interesting. Did you not have to personally guarantee the loan?
copper: Does anyone have any luck find deals from property mangagement companies. such as they might no of a property that somone is selling?
TJ: No - I did not mess up too bad. but it takes a little money each month that I would rather be saving for a new property.
Mike_Summey: Larry, that’s great, but I wouldn’t worry about it not showing up on your credit report. If you’re paying as agreed it may help your credit.
TJ: I also had a realtor involved in each purchase.
Mike_Summey: copper, I’ve bought 3 properties my property managers brought to me over the past 30 plus years.
ritchie: Larry, also, as long as you have a lease on the rental property, the banks count the income too.
Larry_NC: ritchie, Yes we guarantee everything but it doesn’t hurt my credit score
Doug_in_CT: My score keeps on getting hammered by all the inquiries. I have to go on sabbatical for awhile to get it back up.
Mike_Summey: TJ, learn from the experience and follow the Weekend Millionaire methid in the future.
ritchie: Larry, what was the ltv? Do you pay pmi?
Mike_Summey: Hi kip
Roger_Dawson: Mike, would you trust a property manager who also owned rentals?
DaveNRichmond: ah well
jlbburn: Hello Roger
Larry_NC: ritchie, we are below 80%ltv but i don’t know how high it can be. No pmi
Roger_Dawson: Hi Jlbburn!
TomB: Doug, you can get quotes without having someone do an inquiry.
Mike_Summey: Roger, itwould depend on whether the manager owned one or two rentals or made it a business. Incidental ownership doesn’t bother me, but I wouldn’t put 50 units with a manager who had 50-100 of their own.
jlbburn: Any good negiciating stories?
Doug_in_CT: Yeah. Lately I have been keeping a copy of my report and emailing to all the interested parties.
TJ: The correct NOI would require purchasing at 2001 prices. I did not do that. I did get good prices, but not nearly as good as I needed. I can see where I could have done a little better or simply find a neighborhood or town that fit. Lots of rent competition. Investors and lower income. 3 Bedroom houses rent at about $900 per month. But will be patient and I can keep these forever and seem to not have had any trouble renting. I have already started small increment increases in rent when my one year old home lease runs up in February.
TomB: I just tell them my fico score and let tehm quote me on that
ritchie: Mike, how much time do you still put in inspecting properties and making offers?
Mike_Summey: Doug, I wouldn’t worry too much about the number of inquires as long as everything else in the report was perfect. Just explain to your lender that you are getting checked often because you are actively engaged in trying to buy properties that work cash flow wise.
ritchie: TJ, make sure you have a fixed rate mortgage. If rates rise, rents will follow, and you will eventually break even and go positive.
Mike_Summey: ritchie, not as much as I once did. I may spend a few hours each week looking, but most of my deals are now brought to me by people who know what I do.
Doug_in_CT: I have found nothing is more exciting for me than negotiating a small rent increase. Just $50 or a $100 can make such a big difference. I bought this four plex at this time last year and now I am nearing an extra $1,000 per month because I patiently and boldly keep raising the rental amount.
Larry_NC: Mike, Your right about your advice on property mgr’s. We used you non preformance clause in their contract. They were taking too long so we toldthem we were pulling some units.We now have 6 new tenants
Mike_Summey: Doug, the more properties you own the better it gets. If I can average just a $25 per month rent increase per year it amounts to nearly $100,000 per year.
Doug_in_CT: Oh that is beautiful music.
Mike_Summey: Great Larry! That’s called managing the managers.
kip: Mike, I know you look at the NOI when you purchase a property, but how do you figure in if you have to put extra money into repairs to bring the house up to rent.
jlbburn: That’s a thing of beauty!
ritchie: Mike, anyone. I am renting my first house to a very nice single mother. Thinking of the capital gains exclusion, I had planned to sell in 2-3 years, and she wants to buy the house. I’ve changed my objectives and I don’t want to sell. How to you break this news to an excellent tenant?
TJ: I do have fixed rate investment loans. 6.375 and 6.125. I did get a 2nd one one house at 8.25 but am making extra payments to get rid of it. All 30 year loans.
Kim-OH: Hi Carrie
jlbburn: What part of OH are you in Kim?
Mike_Summey: kip, whatever money you put into repairs should be treated the same as the down payment. Calculate the amount of return you want on the money, subtract taht amount from the NOI and then structure the deal to work with what is left.
Kim-OH: jlbburn, near Cincinnati
TJ: The 15% 2nd brought my 1st mortgage rate down.
jlbburn: I’m in dayton
DaveNRichmond: gotta run . gnite all.
kip: Thanks Mike
jlbburn: Goodnight Dave
Kim-OH: Have we met at any reia functions jlbburn?
Mike_Summey: Kim, I heard on TV this morning that Cincinnati is the worst place in America to live. did you see that?
Kim-OH: Mike, I didn’t see that, but I wouldn’t be surprised, just a few years ago it was called the best place to live, go figure
jlbburn: Don’t know…I don’t attent the Dayton meetings as often as I should
Kim-OH: jlbburn, do you attend the reia vendor nights?
Kim-OH: Mike do you recall what program or channel aired that report?
Penny: listed as top ten worst places for women to live
Mike_Summey: Kim, it was on Good Morning America on abc.
jlbburn: Haven’t in the past….and I kick myself in the ass for that
Kim-OH: Mike, I’m sorry I missed that, would have been interesting to hear the reasons
Mike_Summey: Thanks Penny, I knew I didn’t have it quite right.
Penny: gma, from Good Housekeeping magazine this month
Kim-OH: Penny, really, top ten worst places for women, why?
JoeDio: Hey Mike/Roger, I don’t know if you guy’s follow the Canadian Market but for the past 5 years there was an huge increase and now that the vacancy rate is above 3.5%, are we expecting a bubble in the next few years???
Kim-OH: jlbburn so your name isn’t Joe
Penny: yes Kim, me too, they didn’t list reasons,, guess they want us to buy the magazine for that
jlbburn: Jon Blackburn
Mike_Summey: JoeDio, not much different than here in the States.
Kim-OH: Penny, thanks, I’ll get the magazine grrr
Larry_NC: Kim, ALL the good men are down south
ritchie: Has anyone heard that housing growth is starting to show signs of slowing?
Kim-OH: Hi Jon, it’s nice to make your accquaintance
Mike_Summey: Careful Larry
Kim-OH: Larry, that’s it, I’m moving South LOL
Kerry: ritchie…every day I read a headline that shows a slow down.
TomB: Rithchie, with interest rates rising it has to
Roger_Dawson: JoeDio, the big thing for us is the exchange rate. 75 cents a couple of years ago, 90 cents today, heading for par. Canada isn’t a bargain anymore. We should have bought the country when we could afford it!
sandy: Yes, ritchie, there have been reports and signs that SoCal is slowing down
Penny: Kim in the top 10 were several cities in Ohio. Maybe factories, not sure, I’m buying magazine also.
Kerry: SoCal, Boston and S. Florida…
Kim-OH: Penny, yes Cleveland and Dayton were listed in the top crime stats
Mike_Summey: there is going to be a slowdown…no doubt about it. I’ve been throught 3-4 of these cycles and they are all the same.
TJ: A friend mine lived in the Phoenix area (Scottsdale). Bought a house at $275,000 in 11/2003 and up for sale now at $509,000. but the market has plateaued and actually dropped just a little for a couple months. Realize should not speculate.
Kim-OH: Penny, yes the loss of our industrial base is hurting Ohio big time
TomB: Mike, are the opportunities better or worse in a slowdown?
ritchie: Mike, have you ever been hurt on the downside? (Yes, I’ve read the article 
).
Larry_NC: Mike, I liked your article about a slow down being a good buying opertunity
Mike_Summey: Tom, did you read the article I posted on the website titled “When the Bubble Bursts, Deals Will Blossom”?
Kim-OH: Mike, do you remember the RTC in the 80s?
TomB: I’m reading it right now. Thanks
zert: gotta go, thanks everyone
Kerry: zert, bye
Kim-OH: Goodnight Zert
Mike_Summey: ritchie, I’ve always done the best on the downside of a cycle. That’s when the deals happen.
Mike_Summey: Goodnight zert
Penny: headed out also guys. Goddnight everyone
Kerry: Bye, Penny
Kim-OH: Goodnight Penny, take care
Mike_Summey: Goodnight Penny
ritchie: Mike, do the banks tighten up on the downside? Can a small investor still get financing?
TJ: Phoenix and Las Vegas supposedly both slowed down from bidding above asking prices to now a little more sane, but I doubt you find many deals in such a market.
Ralph_Roberts: nite, Penny
Penny: out of chat that is. Only other place I’m headed is out from in front of this computer to sofa to enjoy glass of wine. Goodnight
Mike_Summey: ritchie, it doesn’t make any difference what the banks do, its on the downside that sellers get in trouble and have to discount the properties to sell them.
Larry_NC: Got to run. Goodnight Everyone.
Kim-OH: Goodnight Larry
TJ: I can tell you that my Grand Junction mortgage company went from 10% down minimums on investment property to 15% minimum. I paid 20% + anyways to avoid mortgage insurance.
Roger_Dawson: Got to run, folks. Have a great Thanksgiving!
Mike_Summey: It’s been a good chat tonight. I’m going to watch the football game now. Everyone have a good night and I’ll see you next week. Tell your friends about the chats and invite them to participate.
Kerry: TJ, that’s some lender tightening, especially when lenders were (maybe are) doing 125%ltv loans.
Kim-OH: Happy Thanksgiving everyone
ritchie: Thanks Mike
TJ: I assume this change from 10% to 15% over the course of a year might be tightenign up
Mike_Summey: Goodnight all.
Kim-OH: Goodnight All
TomB: Goodnight everyone
Ralph_Roberts: chat transcript will be posted shortly
Kerry: Guess that’s it for tonight…Happy Thanksgiving, all!
TJ: But I think maybe that tighening up might keep people out of trouble too of overextending. Butwhen the market slows, I think I am going to look for some creative financing with owners at low or no interest loans. I will go to the book for reinforcement of ideas I did not use on my first two houses.
TJ: Thanks for all the input. Enough input for my first chat ever!!! Thanks for everything.
TJ: Goodnight.
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