Chat 1-23-06
Posted on January 23, 2006
paul: Is anyone here?
Dennis_: Looks like just us
Dennis: *slap*
Dennis: *choochoo*
Roger_Dawson: Hi Ken and Scott!
barney: hoo ti hoo
Roger_Dawson: Hi Barney!
Roger_Dawson: Mike Summey is in Orlando and will be joining us any minute
Roger_Dawson: Hi Theo and Justin!
Theo_SC: hi Roger
Roger_Dawson: Hi Mike!
Mike_Summey: Hi everyone!
Roger_Dawson: Where is our webmaster Ralph this evening?
Roger_Dawson: Anyone have questions about real estate investing?
Mike_Summey: Ralph has the flu! I talked with him earlier and he said he
would try to join us.
Mike_Summey: Hi bill & dolly
corey: roger or mike when you purchase properties do you do so in a way
to get your closing money back
billq: Hi Mike,
Mike_Summey: scott, make an offer that will work for you and see what the
seller does.
Mike_Summey: Hi Joe & Bob
Bob_Carr: Hi Mike
Bob_Carr: Hi Roger
Bob_Carr: Theo !
Roger_Dawson: Corey, if you’ve got a way below market deal you can
arrange alternate financing that will enable you to get your closing costs back
out.
Mike_Summey: corey, sometimes I can get the closing money back and
sometimes I can’t. It is not an important issue with my so long as the deal is
good.
Bob_(vegas): Any idea on per cent leveraged in a portfolio anyone?
Mike_Summey: Bob, the % leveraged changes the longer you are invested. In
the beginning I was almost 100% leveraged, but today I’m only about 30%
Theo_SC: Hey Bob, what’s up
Mike_Summey: Hi Theo, I didn’t see you earlier.
corey: mike based on my past purchases it seems this would take a lot of
cash if you purchased a lot of properties in say a 12 month period
Roger_Dawson: Bob, since we believe in a deal that at least breaks even
on cash flow, it’s hard to find a really high leverage property, so I’d guess in
the 80% to 85% range
Theo_SC: hi Mike, I am here
ken: I was looking to refinance 2 of my properties but i’m looking at
$3,500 for each refinance. is there any other way to cut that cost down? what
about a home line of credit on the home?
Mike_Summey: corey, in the beginning you have to take it slow if you
don’t have a lot of cash. I only bought 1 property my first year, 2 the second
year and 4 the 3rd year.
Theo_SC: Mike, what do mean by 30% invested?
Theo_SC: I just got the book today
Mike_Summey: ken, you have to negotiate the closing costs as you would
the purchase. I just did several refinances that ranged from $250 per loan to $0
per loan.
Bob_(vegas): at 44 Im struggling with retirement…..I guess I need to
get several more properties
Mike_Summey: Theo, I talked with Roger earlier and he received his today
also. I’m in Orlando so I haven’t seen mine.
Mike_Summey: Hi Eddie
EDDIE-NC: Hi everyone
corey: mike how did you build your purchases from a cash standpoint.
Equity in your homes or the cashflow form them for things like closing cost
ken: Would you refinance with a morgage company or banks? does it make a
differents?
Roger_Dawson: This is a big day for we Weekend Millionaires! Today I got
the first copies of our third book from the publisher. Called Weekend
Millionaire Real Estate FAQ (frequently asked qustions).
Mike_Summey: Bob, retirement at 44? Wish I could have done that!
Mike_Summey: Hi Penny
Bob_(vegas): no not yet
Roger_Dawson: So now you can order the book from our website or from
Amazon.com.
Mike_Summey: Hi Joe, you back?
Penny: Miss you
Roger_Dawson: Many of you helped us write the FAQ book because we used
many of the questions that you asked us during these chats and gave expanded
answers.
Bob_Carr: Hi Nurse Penny
Theo_SC: Mike, have you bought from hud?
Mike_Summey: Theo, yes, but not in the last several years.
Bob_(vegas): I am reading a book out titled “the number” about
retirement planning this scares me!!
Mike_Summey: Bob, I haven’t heard of that one.
Roger_Dawson: As Ed McMahon used to say to Johnny Carson, “I bet any
question you’d ever want answered about real estate investing is right there is
this book!’”
Bob_(vegas): lee eisenburg
Mike_Summey: The FAQ book follows “The Weekend Millionaire’s Secrets
to Investing In Real Estate” chapter by chapter and the questions are
sorted to apply to each chapter.
Bob_(vegas): anyone investing in San Antonio??
scottdallas: SO - you stay away from hud?
justin: i live in SA. Do you see that as a good market?
Mike_Summey: Bob, I’ve heard that San Antonio and most of the rest of
Texas are great for investing.
Roger_Dawson: If you go to your bookstore, look for the big purple
metallic FAQ on the front cover.
corey: mike i live in mississippi but am working in your backyard this
month in asheville
corey: very nice area here
Mike_Summey: corey, what are you ding in Asheville?
corey: Training some employess for Hunter Cheverolet and Volvo in
Hendersonville
Mike_Summey: corey, the Hunter’s are friends of mine.
Roger_Dawson: I did a program in San Antonio in December and was amazed
at the terrific real estate buys there. Prices are very reasonable (dirt cheap
by California standards) and the economy is in great shape. I’d definately
recommend investing there.
Bob_(vegas): Beats Vegas
Bob_(vegas): I bought 3 properties prior to the 04 spike
Roger_Dawson: I spent three days in Vegas this week. The time to buy
there would have been three years ago.
Bob_(vegas): here in vegas
corey: I am training for the bodyshop manager. I haven’t actually met any
of the hunters yet. But heard they are fantastic people
Bob_(vegas): only 2 or my 6 pencil
Bob_(vegas): of
Roger_Dawson: Congratulations Bob. Smart timing!
Mike_Summey: corey, they are good people. They used to be customers of
mine when I was in the advertising business.
Bob_(vegas): rents are sort
Mike_Summey: Eddie, yes I do.
Bob_(vegas): soft
Mike_Summey: I wonder where everyone is tonight. We have a small crowd.
Mike_Summey: Hi zert
corey: mike their bodyshop manager is from ms. He asked me to come out
and train one of their employees
zert: hi everyone!!
Bob_(vegas): I heard a rumor that Atlanta is picking up…any truth to
that?
Theo_SC: Mike…the latest version of the Offer Generator is even better
than the previous ones. Is this the final version before release?
Mike_Summey: Hi Peter.
Peter: Hi Mike
Peter: how is everyone today?
Mike_Summey: Theo, it will be ready by the end of the month.
Peter: Roger I read your book on power Investing and it was an excellend
book
Mike_Summey: Theo, did you see the ad in the back of the FAQ book?
Roger_Dawson: Thank you Peter, I appreciate that!
ken: has any one built homes then rented them out? I was thinking of
building some row homes (3) then renting them out.
Peter: Now I remember how I got fleeced when I bought my first car they
were applying all the principles in your book and I did not know how to
negotiate
Theo_SC: I have gotten two responses back from sellers. One might be a
deal the other won’t work, the numbers are not there.
zert: Mike/Roger - do you normally have your PM take care of items like
lawn service, snow removal and trash pickup ???
DaveNrichmond: tadaaa!!
Mike_Summey: ken, I’ve built several properties for rent. Everything from
single family to 4-20 unit apartment buildings.
Mike_Summey: Hi Dave
DaveNrichmond: Hi Mike
Theo_SC: have anyone notice that rates are holding steady.
DaveNrichmond: Hello Roger
corey: mike when you said you were basicaly buildin one house then 2 then
4 was it mostly from the equity you had gained in the homes you had already
bought?
Peter: Theo are you talking abt interest rates?
Theo_SC: yes
Roger_Dawson: Zert, yes but only in multiple units. In a SFR the tenant
would handle the law. Landlord typically pays for trash pickup. I know no
nothing about no snow removal!
Peter: What does expert have to say on the future of interest rates?
Bob_(vegas): snow? whats that?
zert: Roger - it dosent snow in So CAl ???? we get over 100 inches/year
Roger_Dawson: Peter, it seems like the Feds have quit raising rates for a
while. I predict that they’ll stay where they are.
Mike_Summey: corey, it was because I had to make offers that would work
for me when I didn’t have much money. The better I got at making offers, the
more of them were accepted.
DaveNrichmond: Roger, you don’t do credit checks do you…I recall you
said you do criminal check instead?
DaveNrichmond: Mike, I think someone made me an offer on one of my houses
today that sounded like it came right out of your book.
Roger_Dawson: Dave, I don’t recall commenting on that before, but I would
always get a credit check.
DaveNrichmond: Roger..ok…maybe it was that you don’t do leases, just
month to month.
Bob_(vegas): is there a number to use when computing cash on cash return?
Bob_(vegas): a min?
DaveNrichmond: I’ve been having a terrible time finding people to put in
my vacant properties.
Roger_Dawson: That’s right Dave, I’ve always thought that leases just
protect the tenant not the landlord. If a tenant moves out before the end of the
lease it’s very difficult to sue them and collect the balance.
DaveNrichmond: Roger, if you have month to month and they don’t pay how
long does it take to kick them out?
Peter: Roger is that true in all states?
Peter: I thought tenant laws varies state to state and some states favor
the tenants and some landlords? dont know the details thoush
Roger_Dawson: Dave, in California you file a five day notice to pay rent
or quit. If they don’t you take them to court and get an eviction. Then it
depends how well they know their way around the system. Some scumbag tenants can
stretch it out for months. Best advice? Only rent to grade AAA tenants.
DaveNrichmond: I agree Roger….but finding AAA tenants is nearly
impossible lately. They all bought houses it seems.
Roger_Dawson: Peter: each state would have different laws. Mike tells me
that in NC the courts won’t even listen to a lawsuit for a broken lease on a
home.
Mike_Summey: My property managers run credit and criminal background
checks before leasing, but even at that we occasionally get a bad tenant.
DaveNrichmond: I’ve tried everything I can think of to get them in there.
I have an appointment set up for this coming wednesday with a PM. Gonna find
someone to take over. I must be doing something wrong.
Theo_SC: Have anyone done a 80/20 combo loan?
Mike_Summey: Dave, I’ve never managed my own properties even from the
first one.
corey: mike from the little i have been in ashville i haven’t seen a
really bad area. I know you have never sold a property but in jackson,ms an area
that is nice now in 15 years you may not be able to go their in the day time
would you sale in a situation like that
Mike_Summey: Theo, tell me more.
DaveNrichmond: Mike Iknow….and I kept saying I should do that but I
thought I would save money doing the first couple myslef. I have wasted so much
time with people who aren’t qualified to rent a snowblower much less a house.
DaveNrichmond: I didn’t know there were t his many scam artists in my
city.
Mike_Summey: Dave, I think that if I tried to handle my own property
management I’d probably go nuts and sell everything.
Roger_Dawson: Corey, if an area is clearly in decline, you might be
better off to sell. Better still be smart enough to buy only in areas that won’t
decline.
DaveNrichmond: I’m blown away by the amount of people who never pay their
bills.
Bob_(vegas): I wanted a PM but the wife said no
Mike_Summey: I know I’ve bought many properties from people who have had
this happen to them.
Theo_SC: 80% on the 1st & 20% on the 2nd. 2nd is about 13-14%. In
other word, the purchased priced is 100% financed. all you bring is closing.
DaveNrichmond: Mike I am afraid I have to sell one of mine just to stay
afloat right now. Got ahead of myself so I’m selling one to regroup and start
back slower.
Mike_Summey: Bob, ask the wife if she wants to be an investor or have a
second job.
Bob_(vegas): need to get the pants back from her
Mike_Summey: Theo, I find it easier to get 100% financing with a small
bank 1st and a larger seller 2nd.
Roger_Dawson: Be careful of all those no money down books out there. All
too often the only deals that will work with no money down are the areas that in
danger of declining.
Mike_Summey: Bob…NO comment!
Bob_(vegas): hehe
Theo_SC: ok, thanks, I was thinking along those lines
Bob_(vegas): Roger what city do you hail from?
Mike_Summey: Theo, Roger is right. It’s easy to find no money down deals,
but finding ones that you can afford to own after you buy it is something else
entirely.
Roger_Dawson: I’ve lived in the same house in La Habra Heights CA for the
last twenty five years. It’s ten miles north of Disneyland.
DaveNrichmond: Mike I think having a PM will be worth it just so I don’t
have to talk to the potential renters anymore.
Bob_(vegas): I used to live in Ventura County
DaveNrichmond: And PM probly would have filled both units by now.
Roger_Dawson: My daughter live in Montecito in Ventura County. It’s like
the south of France without the French!
zert: Dave, maybe that is your answer so that you won;t have to sell
Bob_(vegas): a nice area
billq: Mike, a small bank first, what percentage are you talking about
50% or less?
Mike_Summey: sorry, I just got kicked out.
corey: does getting a small first to pay off the first mortgage and then
owner second get you around the due on sale clause
DaveNrichmond: Zert….I’d like to avoid selling. I’m sitting down with
the PM this week. I figure I can stay afloat 2 more months without tennants in
these two places. If I fill one in a month I can go 3 months…maybe 4.
Roger_Dawson: Mike, are we going to offer nameplates to buyers of our new
book “Weekend Millionaire Real Estate faq”?
zert: Good Luck!!! let us know
Bob_(vegas): when does the offer generator come out??
Mike_Summey: corey, there is no legitimate way around the due on sale
clause that I know of. All of the gimmick people are teaching border on fraus
and I don’t want any part of that.
Mike_Summey: Dave, you’re right. A PM will take a load off of you.
Rob_FL: is the offer generator primarily for determining various owner
financing alternatives and based on how much money you put down as a down
payment?
Roger_Dawson: Don’t let the due on sale clause stop you from going to the
lender and asking to assume the loan. Lending money is there business remember.
Mike_Summey: Bob, the Offer Generator will be ready by the end of the
month. Theo and Bob Carr have been two of our beta testers. Maybe they would
like to comment on what they have seen of it.
DaveNrichmond: Had someone come in today to look at a rental then he made
me an offer to purchase. 50k down and I hold the note for 3 years. nope!
corey: mike can you only purchase with owner financing then from people
who don’t have a mortgage
Mike_Summey: Hi Rob
Mike_Summey: Roger, we haven’t made any plans to do so.
corey: mike is the due on sale not enforced by banks
Peter: Mike if you need more testers for your program let me kwnow I
would be willing to do that for you
Mike_Summey: corey, an owner can only finance the portion of a property
he owns. The more equity he has the more he can finance.
Bob_Carr: The Offer Generator will be a great tool when you are out and
farming your neighborhoods,you can write and print a offer on the spot!
Mike_Summey: Thanks Peter, but I think we are about ready to release the
program.
corey: ok that answers everything for me. The light just went on thanks
mike
Peter: thats sounds great
zert: I want ralph’s autograph !!!!! :p
Roger_Dawson: The new book has a create section by our webmaster Ralph
Roberts on how to use the internet for research.
Bob_(vegas): anyone using a mortgage accelerator program?
Mike_Summey: The Offer Generator will walk you through hundreds of ways
to make offers that all work with the noi.
Theo_SC: This software lets you generate offers base on the noi. Once the
NOI is determine, you can create offers using a wide range of interest rate
& or terms all center around the “noi”. It’s great. I have already
gotten 2 sellers to response to my offer. One look at a deal, the other may not
work. Seller owes more than it worth. I love this program & I am using it
daily.
Mike_Summey: zert, I’m sure he will be happy to give it to you. He is
author of the Sander Guide to Autograph Values.
Rob_FL: Theo, I know everyone’s statistics are different but about how
many offers do you make before they get accepted?
Rob_FL: Theo, do you have some sort of a laptop with you when you are at
the seller’s house plugging away numbers???
Roger_Dawson: Mike, we should do something special for our chat room
friends. Let’s offer a free autographed bookplate to anyone who buys the book by
the end of the month.
DaveNrichmond: Mike, Roger thanks as always. Gotta go pick up the kid
from school.
Mike_Summey: Roger, that sounds good to me.
corey: mike do you have to disclose the owners second to the banks
Peter: Mike Roger and everyone thanks and have a good night
Bob_(vegas): Roger are you investing in AZ?
zert: I need to go - thanks everyone
Roger_Dawson: Thanks Peter
Mike_Summey: corey, if the first is small enough the banks don’t care.
Mike_Summey: goodnight zert
Roger_Dawson: No, I owned a house there once and it didn’t work out for
me. Everything I’ve owned has been in Southern California.
Theo_SC: No, I prefer to talk with the seller & get a much info &
than due my home work before making an offer. email me & I’ll send you a
list of seller questions that help with asking the right questions. info@jcarealestate.com
Theo_SC: Rob, email me
Rob_FL: ok
Theo_SC: If anyone else would like a seller questions, email me @
jcarealestate.com & I’ll send it to you.
Mike_Summey: Our new FAQ book should be in the bookstores nationwide
within the next week or two.
Bob_(vegas): Mike do you consider the cash on cash return when
purchasing? and what is a good number to look for?
Theo_SC: I look for a 10% return
Mike_Summey: Bob, the cash on cash return can be whatever you are
comfortable with. There is no magic number.
Roger_Dawson: I think that 10% would be great. In today’s financial
market, five percent looks pretty good.
Bob_(vegas): thanks
Theo_SC: Roger, I am reviewing neogiating 101 again, Can’t get enough.
Rob_FL: I’d like to budget about $300 a month on marketing to attract
sellers to call me (since I have a full-time job). How would you effectively
spend that $300 to get motivated people to call you?
Roger_Dawson: Thanks Theo
Bob_(vegas): thanks all and have a good night
Mike_Summey: The cash on cash return becomes more important the more cash
you have to invest. If I can get in with only $1000 I’m not as concerned as I
would be if I have to invest $50,000. Sometimes no return on cash is okay with a
very small amount down and a very large upside potential in the form of
appreciation and debt reduction.
Bob_(vegas): thanks mike
corey: Roger and mike maybe you guys should look into offering your books
on audible.com if you haven’t already that is where itunes gets their books
from. I download business books from itunes alot
Mike_Summey: corey, we’ll check into it.
Bob_Carr: Great idea Corey
Mike_Summey: I’m going to have to say goodnight as well. I have to be
fresh in the morning for flight training.
Mike_Summey: See everyone next week. Goodnight!
Roger_Dawson: Good night and good luck everyone!
Theo_SC: thanks to all a for good chat session…see you next Monday
Theo_SC: rob u there
Rob_FL: y
Rob_FL: I just emailed you
Theo_SC: where in FL?
Rob_FL: Jacksonville
Rob_FL: I really want to get things going this year 
Theo_SC: how is the market there?
Rob_FL: sellers market…good market…lots of competition though
Rob_FL: I know there is lots of potential. Median house price is about
$180K
Rob_FL: Which part of SC are you from?
Theo_SC: Have u tried the HUD site, many good deals there
Theo_SC: Greenville
Theo_SC: Buyer market
Rob_FL: oooh, one course that I have is Larry Goins course where he has
established a flipping machine one of his staff members are buying like crazy
over there
Rob_FL: bout 5 deals a month average of $6000 a month
Rob_FL: flipping primarily
Rob_FL: they don’t see the house at all…everything fax,mail and
internet
Theo_SC: yeah, Larry is good. lots of flipping. I am long term investor
Rob_FL: I suppose in a buyer’s market you can get better wholesale
deals…over here it’s not as easy
Theo_SC: have not sold yet
Rob_FL: you sound like mike summey…you following his same principles?
Rob_FL: using property managers all the way, etc.?
Theo_SC: it take a little time
Theo_SC: have not found a good one yet
Rob_FL: buy and hold will take a while…I just don’t want to work that
long
Theo_SC: mostly home warranty & handyman
Rob_FL: you must be finding all kinds of deals at greenville…
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