Chat 2-27-06
Posted on February 27, 2006
GERARDO_BROKER: What do you need to know about mortgages?
GERARDO_BROKER: Anyone there
navig8tr: Hello?
curtish: Hello?
Mike_Summey: Hello everyone!
Mike_Summey: curtish, looks like its just you and me for the moment
curtish: OK
curtish: This is my first time here.
Mike_Summey: Hi yameen
Mike_Summey: We’re all friends, so don’t hesitate to ask anything you want.
Mike_Summey: I’ll help any way I can.
curtish: Is this typically a question and answer session?
Mike_Summey: If either of you have a question, now would be a great time to ask it before the chat gets crowded.
Mike_Summey: curtish, yes it is. Roger will be along shortly and we host these chats for our readers so they can ask us questions about anything that has to do with real estate investing, wealth building or negotiating.
Mike_Summey: Hi Canada1, welcome to the chat.
canada1: thanks
canada1: first time
canada1: Ive read the book you published and I was wondering how it apply’s to Canada
Mike_Summey: For all of you, just remember there are no dumb questions…only people who remain dumb because they won’t ask.
Mike_Summey: Canada, which book?
canada1: weekend millionaire
curtish: What would you say is the best, and by that I mean most direct and quick, way of prospecting for leads?
yameen: hi everyone - 1st timer.
Mike_Summey: Canada, we currently have three books in the Weekend Millionaire series. Real Estate Investing, Mindset and Frequently Asked Questions. Have you read them all?
canada1: secrets to real estste investing
Mike_Summey: curtish, I’ve had the best luck doing two things. One, getting out and talking to people withing the neighborhoods and two, working with a good buyer’s broker who is willing to look for deals for me.
Mike_Summey: Hi Ed & Penny
Penny: Hi MIke.
Ed: Hi Mike
curtish: Do you primarily use convenional financing for most of your deals? Is that what you would reccomend initially for a begginer?
Mike_Summey: Canada, I understand there are some basic differences in how properties are financed in Canada, but the fundamental principle that a property must generate enough income to pay for itself works everywhere.
Mike_Summey: Hi slaurain
yameen: does anyone do their investing with partners? Have a friend who has come into more money than he knows what to do with.
slaurain: Hi Mike
canada1: thanks Mike - when financing youre first property how much personal money should you use?
Mike_Summey: yameen, I’ve never had a partner or an investor, but I know many people who are very successful investors who have never done a deal by themselves. It’s all in what makes you comfortable.
Ed: That is my question as well Mike. I have my own single family home and just purchased a 3/3 townhouse for investment here in south florida area that will have a positive cash flow. The problem is that I am all tapped out financially to do other deals. I would like to know what a beginner can do to educate themselves on the “no money down” principle.
Ed: are they real in todays market?
canada1: I will also be using a partner when investing.
Mike_Summey: Canada, I tell everyone that you should not use any more of your own money than you have to, but also that you need to be careful of No Money Down deals because many of them are deals you can’t afford to own after you buy them.
Penny: Hi Roger.
Mike_Summey: Theeeeerrrese…..Roger!
Roger_Dawson: Hi Mike and everyone. Sorry to be late!
canada1: hi Roger - i’m new here
Ed: Hello Roger, new here as well. It’s great to be able to chat live with you and Mike.
Mike_Summey: Ed, it took me a year to buy my first deal. Just one the first year. Then I bought 21 the second year and 4 the third year. You have to be patient.
Mike_Summey: Hi TT & hypnotx
TT: i
Roger_Dawson: Hi Ed and Canada 1, I’m glad you joined us. We’re happy to help investors and we’re not going to try and sell you a time share!
yameen: is anybody in southern california? understanding that there are deals everywhere, is the l.a. market especially difficult?
canada1: when investing, how do new properties compare to older fixer uppers?
Mike_Summey: We are having several people sign up on our website each day. It’s always good to have new people join the chats.
canada1: Do you have any other chatters from Canada (Toronto) here?
Mike_Summey: Canada, I naturally prefer newer properties when I can find them. They usually have less deferred maintenance problems.
Roger_Dawson: Yameen, the real estate market is crazy here. Propeties that sell for $400,000 are lucky to rent for $1750. It’s very hard to make the numbers work.
Mike_Summey: Canada, we’ve had many people from Canada in the chats.
Mike_Summey: Hi Bob
curtish: Roger, I just wanted to say I am a big fan of your power negotiating series. It has really helped me make a better income in my sales job. Thanks!
Mike_Summey: Careful curtish, you’ll give him the big head!
Roger_Dawson: Are mortgages in Canada still only for seven years and then you have to refinance?
Bob_(vegas): Hello everyone
Roger_Dawson: Thank you Curtish. It’s great to hear that!
curtish: Hi Bob.
hypnotx: Bob… I’m guessing you’re IN Vegas?!?!
Bob_(vegas): yup
canada1: Mortgages here are anywhere from 6 months to 10 years. Depending on how much you put down on the property to make the numbers work.
Roger_Dawson: Hi Bob, spent 2 days at the Monte Carlo Casino last week doing a seminar for Home Depot Supply.
Bob_(vegas): my son was married there…….what a rip off
canada1: Its really wierd because the rtes were low for a while and now thaey are rising a little.
Bob_(vegas): hehe
Mike_Summey: Hi JS
Ed: Roger, I see your going to be here in Ft lauderdale next month with Zig Ziglar, I am hoping to attend.
canada1: sorry about the spelling.
Mike_Summey: Roger you haven’t told me about that.
Mike_Summey: Canada & everyone else…don’t worry about spelling & grammar, just do the best you can and we will too. It gets a bit hectic at times in the chats.
Roger_Dawson: Ed, I’m not aware of that. perhaps you could Email what you read about it. I’m at RogDawson@aol.com
canada1: do you guys plan on comming up to canada for a seminar - or perhaps Buffalo N.Y - it’s the closest city to Toronto.
yameen: what’s the best way to research an out-of-town market?
Bob_(vegas): Mike do you know Richard Travis from the TV show flip that house??
Mike_Summey: Bob, no I don’t know him.
Bob_(vegas): he is out of SC
Bob_(vegas): I think
Ed: Ok, I will find out information from my colleague that I was talking to about your Millionaire series. He was the one who was going to check into getting tickets.
Mike_Summey: Bob, I’m not familiar with him. What does he speak about?
Bob_(vegas): has a real estate company I think Land mark property\
Mike_Summey: Canada, I don’t have any plans to be near you anytime soon, but that could always change.
canada1: that would be great
Roger_Dawson: Canada, I was in Niagra Falls, Ontario in December for three days, doing seminars for M&T Bank, which is a huge chain of banks in New York State. It’s a great place to have a meeting. Don’t have anything coming up in Canada though.
Mike_Summey: I’ve heard of Landmark Properties, but I don’t know anything about it.
Ed: You guys coming to S.E Florida anytime soon?
canada1: roger was that seminar private or could anyone get in?
Bob_(vegas): They do some interesting deals…..greenville…geirgetown
Mike_Summey: Have any of you purchased our latest book Weekend Millionaire Real Estate faq? It has just hit the bookstores.
Bob_(vegas): gotit
curtish: Does the tapes of your first book simply verbally rehash the book, or does it branch into additional info?
Ed: I just purchased it today.
Bob_(vegas): went back with a 30% off for mindset
curtish: I have the new book, but I haven’t broke it out yet.
canada1: I’m not sure if it made it up here yet - but I’m looking out for it/
Bob_(vegas): when will the offer generator be out?
hypnotx: Bob - are there any REI clubs in Vegas or surrounding areas that you know of meeting in the next couple weeks?
Mike_Summey: curtish, the audio program is similar to the book, but not a book on tape. What the audio program does is allow you to actually listen to what you’re supposed to be doing while you’re out in the field doing it. I would urge you to get it.
Ed: is that a fourth in the series?
Bob_(vegas): the one i am interested in is Silverstate
Roger_Dawson: The FAQ book has a lot of solid information in it. We took the most interesting questions that we’ve been asked here, by Emails and at seminars and expanded on the answers.
hypnotx: an REI club in Silverstate?
yameen: Is the “offer generator” software to calculate noi, etc…?
Bob_(vegas): You would need to link from reia
Bob_(vegas): thats the name
Mike_Summey: Bob, the Offer Generator is ready, we’re just waiting on Ralph to get it on the website. He is having a little problem interfacing it with the shopping cart since you will be able to download it and try it out before you have to purchase it.
Bob_(vegas): I am going out to san antonio to look on thursday and it would be nice to have it available
Roger_Dawson: Mike, where is that wascal walph tonight?
curtish: Roger, did you do a tape series many years back called something to the extent of “make your life and adventure”? I heard a snippet of it on an old “the new lead the field”, but I can’t seem to locate it anywhere.
curtish: What is the offer generator?
Mike_Summey: yameen, the Offer Generator Program willnot only calculate noi, it will walk you through how to create hundreds of offers that will work with the NOI and then actually generate the offer letters to the sellers ready for your signature.
elba_NY: good evening everyone.
canada1: After the property is purchased and it is ready for rent - what is the best way to advertise?
yameen: what
Ed: what a great tool to practice and help you get comfortable/knowledgable with the numbers
Mike_Summey: Hi elba
yameen: sorry - what is the best source of raw data to calculate noi? Property Mgmt Company?
Mike_Summey: Hi Pscherer
elba_NY: hello Mike
Pscherer: hello
elba_NY: Hi Roger
Mike_Summey: yameen, we cover that in depth in the real estate book.
Roger_Dawson: Curtish, yes, it was one of my favorite programs “You Can Make Your Life an Adventure” It didn’t sell so we rewrote it as a how to book and we sell it now as Secrets of Power Performance. It’s good stuff. You can see it on my website www.rdawson.com.
yameen: i’m still making in through the book - on the “no money down deals that work” portion.
elba_NY: hey there Penny
Roger_Dawson: Hi Elba! Is it true that Napeleon retired on you?
Penny: hi elba
elba_NY: and had a great retirement/
elba_NY: 
Mike_Summey: yameen, when you finish the book if you still have questions, the FAQ book tracks the real estate book chapeter by chapter and gives you the questions and answers we have been asked over the past 2-3 years.
Roger_Dawson: Very good
Ed: the FAQ book tracks the Millionaries Secrets book chapter by chapter right?
Mike_Summey: Hi Tyfrom NY
Roger_Dawson: Hi Ty!
TyfromNY: Hello guys
elba_NY: where in NY Ty
Mike_Summey: Ed, that’s correct. It is a must have companion to the real estate book.
TyfromNY: Haven’t been in the chat room for awhile
elba_NY: welcome back then
TyfromNY: I am in the Bronx Elba
TyfromNY: and you?
elba_NY: :> C
Bob_(vegas): what media do you all find to be the most effective to fill your rentals??
elba_NY: Brooklyn
Roger_Dawson: There’s a strange phenomena going on in Southern California right now. Demand is very high. Properties are selling faster than ever. But seller’s are freaked by rumors of a slow down so they are taking lower offers than they were a few weeks ago.
elba_NY: News paper for me Bob
TyfromNY: how long have you been investing in real estate elba?
Mike_Summey: Bob, my property managers use the newspaper and the shoppers guides.
elba_NY: One great up and down emotional year Ty.
Ed: so you are completely hands off Mike? did you “graduate” to that level? and were more hands on in the beginning?
canada1: Local newspapers will work?
Bob_(vegas): my paper gets $85 a week for 4 lines….ouch
Mike_Summey: Ed, I have used property managers from the first purchase. I wanted to be an investor, not have a second job.
Pscherer: Roger same in Northern CA, lots of multi offer deals but properties that do not sell reduce to a more realistic value
Roger_Dawson: When Mike started investing he knew where every penny was. Now he’s lucky if he’s knows where every property he owns is.
Mike_Summey: Bob, do you have one of the free shopper newspapers like iwanna?
elba_NY: Ed take it from Mike. Handing over that responsibility to a PM is the best thing I’ve done. Mind you we got our first property last month.
Ed: such problems. LOL
Bob_(vegas): Nifty nickel …..but still cost…..
Pscherer: I use a PM too and they advertise on there website and newspaper but website works best for them
Mike_Summey: Bob, that’s one of the reasons I use property managers. They pay for the advertising out of the percentage I pay them.
elba_NY: Like it says in the book. That way your free time is spent looking for deals not for tenants.
elba_NY: and such.
Ed: congratulations Elba!
elba_NY: Thanks.
Bob_(vegas): well for the last week I ‘ve been painting the inside…
Mike_Summey: The bigger, more well known property managers promote their websites more than individual properties.
TyfromNY: Mike, I am going to see a 2br 2.5bth townhouse in orange nj (rehab special) most properties sell in that area for 235k they are selling for 190K what do you think?
canada1: Guys it was great chatting - but i gotta go - I’ll talk to you next week.
Mike_Summey: Hi m&e I didn’t see you sign in.
Roger_Dawson: Thanks Canada
elba_NY: bye cananda
Ed: so did you hire your first PM from word of mouth? or the good old yellow pages?
Mike_Summey: Canada, thanks for joining us. Look forward to having you back next week.
Roger_Dawson: Ty, what would it rent for?
canada1: thanks - bye all
Pscherer: Hired PM by wodr of mouth from sevral sources.
Pscherer: sticky keys
TyfromNY: I am not sure?
Mike_Summey: Ty, run the numbers. Be sure to add in what it will take to get it ready to rent and then if the numbers work buy it. If they don’t work, don’t buy it.
TyfromNY: thank you Mike
Mike_Summey: Ty, a good property manager can tell you what it wil rent for.
m&e: Hello - I have a question. When you offer to buy and the seller will hold, do you feel it important to throw in some nominal amount of cash, say 5-10K on a 400K deal? I don’t think the seller needs any cash but does it solidify the deal with cash offered as a down payment?
Roger_Dawson: m&e, ask them and find out. what you would do if you were them has nothing to do with it. Gotta find out what their needs are.
Mike_Summey: m&e, if the sell will finance it all and the numbers work, that’s as good as it gets. don’t tie up any more of your cash than you have to. Cash in the bank is always better than equity in property.
elba_NY: Mike. Do you move equity from properties to put money in the bank?
m&e: Yes. Good advice and I’ve had sellers hold for me in the past. It is hard to believe that there ar people out there, usually older and wiser, who will gladly hold paper to insure cash flow for themselves and their families
Mike_Summey: elba, yes I have done that several times to make sure that I always have adequate cash reserves.
Ed: would either of you recommend pulling out equity to fund another purchase if numbers worked?
Ed: from one investment property to another that is
elba_NY: they will say yes Ed
Bob_(vegas): hehe
Ed: Ok
Mike_Summey: Ed, I do that all the time. There is certainly nothing wrong with pulling equity from one property to purchase another.
Roger_Dawson: Elba, that’s right. Pull money out to expand your investments but not to take a cruise.
Bob_(vegas): well…..how do I take a cruise then?
Bob_(vegas): You guys speaking on any cruises?
Roger_Dawson: Find a rich widow Bob!
elba_NY: One will make you rich Roger, the other 
Bob_(vegas): theres an idea
Bob_(vegas): and a tax deduction to boot
Mike_Summey: I’d rether have $20,000 equity in 5 $100,000 properties than own one $100,000 property free and clear.
Pscherer: You are no recommending to pull cash out if it puts you in a negative cash flow position, correct
Mike_Summey: Hi javiernyc
elba_NY: welcome javier
Roger_Dawson: Bob, I spoke for a while for Celebrity Cruises. It was great but then I got busy again and didn’t have the time for it.
Mike_Summey: Pscherer, that’s correct.
Penny: goodnight every one. signing off.
elba_NY: bye Penny
m&e: If I were to ask a seller to hold a note at less than the going interest rates, say 2-4%, would the IRS intervene at tax time and expect the seller to pay the difference in what they called impuned tax?
TyfromNY: did you fing your property in bk elba?
Roger_Dawson: Bye Penny’
Ed: how are prices in NC these days Mike, I lived in the raleigh area for about 3 years back in 89. I wish i knew then what i know now
elba_NY: No Ty. believe it or not TX\
elba_NY: TX
javiernyc: hi folks. i have a question regarding flips. does anyone recomment interest only loans for property flips in case they dont sell right away? i know this is a long term hold group. i’m just curious.
TyfromNY: single family or dulplex?
javiernyc: single family. or does the bank forbid flipping with interest only loans?
Bob_(vegas): not much flipping done here
elba_NY: is a single family, but it is also a duplex because its attached.
Mike_Summey: Ed, it interesting how prices fluxuate from one town to another. Asheville is crazy right now, but Greenville, SC & Knoxville, TN are good markets for investors.
Roger_Dawson: Javier, that makes sense but we’re buy and hold people. If you’re flipping be sure that you don’t get stuck with a huge income tax bill at the end of the year.
Bob_(vegas): what is the mountain where all the basll players have second homes at in SC?
javiernyc: gotcha. thanks RD
Pscherer: Javier, they may have a prepay
Pscherer: penalty
javiernyc: tks Pscherer
Bob_(vegas): million dollar views etc…
Roger_Dawson: Mike that sound like Cashiers to me.
Mike_Summey: javier, I’m not a good one to ask that question. I’ve never sold a property I’ve ever bought.
Bob_(vegas): near greenville
javiernyc: odd MS… recirculating money fasteri would think is more profitable than waiting for the 30 year to be paid up?
Mike_Summey: Bob, I’m not sure which one it is. There are several.
Mike_Summey: Edddie
elba_NY: Hi Eddie
Pscherer: javier, , flippers are paying ordina ryincome tax
Pscherer: ordinary income tax
EDDIE-NC: hi everyone, better late than never
Mike_Summey: Bob, is it Ceasar’s Head?
Bob_(vegas): no
Ed: Roger, I am in sales and although I do well enough, I want to improve and do even better to increase my income so i can purchase more assets. Is there one book you could recommend that could “push” me through my current “ceiling”?
javiernyc: ord.inc. tax is still less than 50% usually.. so the rest is profit. or am i wrong?
Ed: since that is your field of expertise?
Pscherer: Javier you also have cost of purchase, cost of sale
javiernyc: true
elba_NY: Mike, will you make a mass email when the Offer Generator is ready for use?
Pscherer: materials, holding costs
Mike_Summey: javier, a buy and hold strategy can often yield 100% tax free returns.
javiernyc: after how many years MS ?
javiernyc: on average
Mike_Summey: elba, I’ll email everyone…hopefully next week.
elba_NY: Thanks
Roger_Dawson: Ed, my wife and kids would kill me if I didn’t recommend two of my books to you. Secrets of Power Negotiating for Salespeople and Secrets of Power Persuasion for Salespeople. Check my website: www.rdawson.com dance
curtish: Roger, was that using higher authority?
javiernyc: wow, more books. I havent been to this site since your first book.
elba_NY: Persuasion and Salesperson together. Watch out
elba_NY: powerful match
Roger_Dawson: Curtish, you spotted that! We Englishmen are so self-effecing.
Mike_Summey: javier, why not? Don’t you like us?
elba_NY: you’ve missed alot javier
javiernyc: very very busy.
Ed: so thats the ticket. lol
javiernyc: yes i know.
curtish: You gave up your secrets, now you can be spotted. Thanks though!
javiernyc: have had a few kids in past years.. and job changes, etc.
elba_NY: pick up those books and have your children read it.
elba_NY: Thats if they are not too young
javiernyc: i did try buying some foreclosure but in ny, people want market rate or they wont mind going down in flames.
Mike_Summey: I’m going to try to get some guest in the chat during the coming weeks. Bankers, property managers, accountants, attorneys, etc. Any other preferences?
Ed: ok, thanks Roger. will order them asap.
Bob_(vegas): just got a call to rent my home……unfortunately it has hunter green carpet…
elba_NY: I like the Insurance people Mike
Bob_(vegas): they want me to change it
Ed: your kids on commission?
Pscherer: Bankers please
Bob_(vegas): is that worth any extra?
Mike_Summey: elba, I’ll put that one on the list for sure.
javiernyc: i bid on a house that needed tons of work to get it up to code/normal… bid 1/2 the market rate since it needed so much work. he ended up getting market rate anyway.
Bob_(vegas): maybe a longer term?
Roger_Dawson: It’s pouring with rain in S. Cal so I’ve got to go blow dry the dogs.
elba_NY: Mike we defenitely need more banker friends
Mike_Summey: javier, don’t let one or two dissapointments get you down. I once made 50 consecutive offers that were turned down.
javiernyc: wow.
elba_NY: Mike tell javier of the treshold theory
javiernyc: i will try again this spring b/c now real estate here is on the way down.
Bob_(vegas): Mike do you change carpet to suit your renters?
m&e: Mike How about some contractors who can discuss general costs for roofs, boiler replacement, window replacement etc… To get an idea of rehab costs - I know they are area sensitive but …it could be useful for comparison sake
Mike_Summey: Folks, as much as I enjoy this, I’ve had a really long day so I’m going to say goodnight also. See you all next week.
javiernyc: gn ms
Mike_Summey: m&e I’ll try to arrange that too.
elba_NY: Good nite Mike
Bob_(vegas): winding down now…
elba_NY: Good Nite Everyone. ‘Til next time.
TyfromNY: goodnite
Ed: javier how long have you been trying to invest?
javiernyc: 2 years
Ed: any successes?
javiernyc: almost had one.
javiernyc: with patience i waited a month and almost…
Ed: where are u located?
javiernyc: got a house 100k less than asked
javiernyc: NYC
javiernyc: you?
Ed: in the city?
Ed: i live in ft lauderdale
javiernyc: cool
javiernyc: my best friend lives there.
Ed: so you were able to close 100k below asking?
javiernyc: he fixes airplanes
Ed: oh yah? where abouts?
javiernyc: almost closed with the owner but the realtor didnt allow it
Ed: very cool. my first passion is flying.
javiernyc: pal is in Ft. lauderdale
Ed: planes, etc
javiernyc: me too. went to aviation h.s. here in nyc
Ed: very cool.
Ed: what do you do today?
javiernyc: can i ask about your success with real estate?
javiernyc: i do freelance architecture and daytrading
Ed: play with forex at all?
javiernyc: no
Ed: i have flipped two single families in the last couple of years.
javiernyc: looked at it but not yet
javiernyc: what time frame on each?
Ed: and held and sold 1 condo..
Ed: now, i am about to close on a 3bed/3.5 bath townhome in Palm Beach
javiernyc: cool.
javiernyc: is that what you do f/t?
Ed: so now, i only have my own house that i own, and now this one condo
Ed: the biggest regret i have is selling any of my properties…
javiernyc: why?
Ed: i was just too afraid to keep them, thinking i was getting in over my head. but i would have been so far ahead today if i did hold them so never again. im gonna do what mike does, keep everything
javiernyc: interesting
javiernyc: i would imagine that recycling money would be better= flippng
Ed: maybe short term, but im interested in long term. my goal is to create enough passive income to maintain my current standard of living without having to work. once i accomplish that i will reevaluate what i want to do next… ideally take it to the next level.
Ed: what are your plans?
javiernyc: flip and keep flipping
javiernyc: just like daytrading versus long term investing..
Ed: cool
javiernyc: making 10% a month versus a year is alot more return in the end
Ed: i can see your point of view.
javiernyc: i would like to keep some too but mostly flip
Ed: well javier, im outta here as well. im sure ill see you in more chats
javiernyc: ok goodnite. nice talking to ya
Ed: u2
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