Chat Transcript April 10, 2006
Posted on April 11, 2006
04/10/06 18:57:45 Bob_(vegas): test
04/10/06 18:58:34 Mike_Summey: Hi Bob! Looks like its just you and me right now.
04/10/06 18:58:34 Bob_(vegas): wow
04/10/06 18:58:47 Bob_(vegas): How are you?
04/10/06 18:58:57 Mike_Summey: Doing great! You?
04/10/06 18:59:18 Bob_(vegas): just signed to get an equity line on my house today
04/10/06 18:59:31 Mike_Summey: How did that go?
04/10/06 18:59:38 Bob_(vegas): she was great
04/10/06 18:59:45 Mike_Summey: Hi Eric
04/10/06 18:59:57 Eric_NE: Hey Mike….how’s it going?
04/10/06 18:59:57 Bob_(vegas): someone to have on my team
04/10/06 19:00:30 Mike_Summey: Looks like we’re starting a bit slow tonight.
04/10/06 19:00:38 Mike_Summey: wonder where everyone is?
04/10/06 19:00:44 Mike_Summey: yameen
04/10/06 19:00:48 yameen: hi everyone.
04/10/06 19:00:50 Bob_(vegas): I will close on 2 new homes in houston on the 21st
04/10/06 19:01:00 Mike_Summey: Great Bob.
04/10/06 19:01:17 Mike_Summey: bought two last week and have offers out on 21 more right now.
04/10/06 19:01:38 Mike_Summey: These are bank foreclosures.
04/10/06 19:01:38 Bob_(vegas): looks like they will break even with a 15 year note
04/10/06 19:01:46 yameen: bob, can you give some insight on your strategy of finding houston properties, since you are in vegas?
04/10/06 19:01:51 Bob_(vegas): do you use a service?
04/10/06 19:01:53 Mike_Summey: If they will do that, you have a good deal.
04/10/06 19:02:06 Mike_Summey: No, I find things on my own.
04/10/06 19:02:40 Bob_(vegas): realty trac.com tracks this stuff
04/10/06 19:02:51 Mike_Summey: Our market here has been like many others…too hot to handle.
04/10/06 19:03:07 Eric_NE: In regaurds to seller financing. Can’t homeowners get a one time tax break of $250,000 (or something around that amount) when selling? If so, doesn’t this kind of take the benefit of the seller financing our offer since they won’t take a big tax hit anyway?
04/10/06 19:03:11 Mike_Summey: Thereeeeeess Roger Dawson
04/10/06 19:03:17 Bob_(vegas): out here the banks list the homes with a realtor
04/10/06 19:03:18 Mike_Summey: Hi Joshua
04/10/06 19:03:52 Joshua: Hi…first time in the chat room
04/10/06 19:04:20 Roger_Dawson: Welcome Joshua
04/10/06 19:04:24 Bob_(vegas): yameen I went to houston and met with a realtor that was refered to me
04/10/06 19:04:31 yameen: has anyone heard of gilliland real estate network? they had a booth at a home show in Pasadena this weekend. Claim to find you propertied to invest in.
04/10/06 19:05:10 Mike_Summey: Eric, many sellers don’t want or need all the money at once. If the seller is looking for an income stream, a zero or very low interest note may be just the ticket. With zero or very low interest the chance of it being paid out early is remote.
04/10/06 19:05:13 yameen: bob, i’ve seen many listings in houston that seem promising - did it take you a long time to find your properties?
04/10/06 19:05:21 Bob_(vegas): no
04/10/06 19:05:23 Bob_(vegas): one day
04/10/06 19:05:32 Joshua: I have read all three of your books, well I have about three chapters left in the FAQ book. All of these books have been very inspiring! My wife and I looked at our first three properties this past Saturday and are now crunching the numbers in preperation to make some offers.
04/10/06 19:05:34 yameen: wow - then not a lot of negotiating?
04/10/06 19:05:49 Bob_(vegas): they were new homes
04/10/06 19:06:13 Mike_Summey: yameen, there are numerous outfits that claim to be able to find good investment properties. I’ve never heard of Gilliland.
04/10/06 19:06:26 yameen: new homes that work, in 15 years? i need to meet your realtor.
04/10/06 19:06:42 jeff_the_farmer: hello everybody
04/10/06 19:06:47 Eric_NE: Mike, wouldn;t there be less risk to them if they just took the money, without taking a tax hit, and put it in a CD or something returning that little bit of interest?
04/10/06 19:07:00 Mike_Summey: Joshua, be sure to get the Offer Generator software program from the website. It does all the calculating for you.
04/10/06 19:07:13 Mike_Summey: Hi Jeff, Bryant & Penny
04/10/06 19:07:21 jeff_the_farmer: What is the difference, if there is any, between seller financing and them carrying back a second mortgage? Seems like they are the same. Is seller financing possible if they still have a mortgage? I’m thinking that the small mortgage from the bank would be to give the seller enough to pay off their mortgage, pay the commission, and extra cash at closing. Is this how you would go about doing seller financing?
04/10/06 19:07:24 Penny: Hi Mike and everyone!
04/10/06 19:07:24 Joshua: Mike. I started playing with the demo version today.
04/10/06 19:07:28 Roger_Dawson: Hi Penny
04/10/06 19:07:50 Eric_NE: Jeff…..yep.
04/10/06 19:08:34 Mike_Summey: Eric, yes there would be less risk for the sellers if they took cash, but you may not be willing to pay anywhere near as much for the property as you could if they financed it at zero or very low interest.
04/10/06 19:08:41 Penny: Good evening Roger. Hope you are doing well!
04/10/06 19:08:55 Eric_NE: Thanks Mike….that makes more sense to me.
04/10/06 19:09:28 Roger_Dawson: Hi Penny. Spent most of the day in a dentist’s chair, but apart from that, everything’s fine.
04/10/06 19:09:34 Mike_Summey: Jeff, that’s correct. Seller financing and them carrying back a mortgage are the same thing.
04/10/06 19:09:45 Penny: Ouch.
04/10/06 19:09:48 jeff_the_farmer: thanks for clearing that up, through me off a little bit
04/10/06 19:09:59 jeff_the_farmer: Is it possible for a family member to apply for the loan and put my name on the deed as well? Since two names are on the deed, would this half the amount of rent available to me when I try to use that as my income to secure another mortgage? If so, is it possible for them to apply for the the loan, and put only my name on the deed? If that isn’t possible,is it possible for them to drop their name on the deed after a day or so after closing so that I am the sole owner of the property? Any problems associated with doing it this way?
04/10/06 19:10:32 yameen: Thanks Bob!
04/10/06 19:10:51 elba_NY: hello everyone
04/10/06 19:11:10 Eric_NE: Is there any visual diagrams (chart, graphs, etc…) that we can use to physically show the seller the benefits of seller financing versus taking all cash and having the tax burden? I think it would be nice negotiating tool to show them in black and white how it would benefit both parties. It’s harder to explain the benfits as well as a simple picture could show them…instantly.
04/10/06 19:11:17 Mike_Summey: jeff, there is a lot of problem with that. I recommend that you talk to a local real estate attorney and seek advice that way.
04/10/06 19:11:22 Mike_Summey: Hi elba
04/10/06 19:11:35 Eric_NE: Hey Elba….
04/10/06 19:11:47 jeff_the_farmer: ok, will do first thing tomorrow
04/10/06 19:12:00 elba_NY: hi Mike I heard breifly your chat with Al yesterday
04/10/06 19:12:09 elba_NY: Hey there Eric
04/10/06 19:12:17 Roger_Dawson: Jeff, the seller could drop their name off the deed but they’d still be on the loan, so they wouldn’t want to do that.
04/10/06 19:12:29 Eric_NE: Is that chat between Mike and Al recorded somewhere?
04/10/06 19:12:31 Mike_Summey: Eric, I don’t know of any specific graphs or charts that do that.
04/10/06 19:12:35 jeff_the_farmer: when should you use a buyers agent and when should you not?
04/10/06 19:12:36 Joshua: Mike, One of the properties I looked at this past Saturday was built in 1951. It is still occupied the original owners and is free and clear. I am concerned, though about the condition of the house. It needs a new roof, paint, carpet removed and hard wood floors refinished. All of the things are easy to calculate and get in best condition. The thing that scares me though is the plumbing. While I was looking at the house water was backing up in both bath tubs with sediment in the water. Also, when I tried to flush the toilet water ran all over the floor. Where do you draw the line, and what caution signs do you look for in older homes?
04/10/06 19:12:53 Mike_Summey: Elba, I’m glad you got to listen in. Did you enjoy it?
04/10/06 19:12:56 elba_NY: I think it will post on Al’s website by Wednesday
04/10/06 19:13:24 elba_NY: No I did not. I only got the last 3 Mins. of it
04/10/06 19:13:36 elba_NY: Ill hear it again this week
04/10/06 19:14:01 Mike_Summey: Joshua, I would recommend that you have the house inspected by a professional home inspector prior to buying it. Make you offer subject to an acceptable inspection.
04/10/06 19:14:06 yameen: has anyone heard anything about the market in las cruces, New Mexico?
04/10/06 19:14:23 Bob_(vegas): My tax guy wants me to have an llc. Any thoughts on number of properties in an llc?
04/10/06 19:14:30 Roger_Dawson: Joshua, that sounds like a problem property to me, but I’m not a plumber. Get an inspection before you go ahead. You can make your offer subject to inspection.
04/10/06 19:14:42 Mike_Summey: yameen, that’s a long way off from me. I’m in NC so I’m not much help there.
04/10/06 19:14:56 jeff_the_farmer: can you ask the seller to pay for the inspection or do you usually pay for that?
04/10/06 19:14:58 Eric_NE: Good……85 degree’s and sunny the whole time!
04/10/06 19:15:28 yameen: thanks, mike. i heard something about a military base being built there, so a good potential renter market.
04/10/06 19:15:32 Joshua: What would you recomend as far as preparing the offering and considering upfit cost?
04/10/06 19:15:48 Mike_Summey: jeff, you can do it either way. Personally, I ask for the seller to pay for everything in my initial offer. Then I can negotiate paying for some things in exchange for them paying for others.
04/10/06 19:16:07 yameen: mike are you familiar with the market in the d.c. area?
04/10/06 19:16:16 yameen: or anyone else, of course
04/10/06 19:16:43 Mike_Summey: yameen, not really. I’m more familiar with NC & SC where I invest.
04/10/06 19:17:05 jeff_the_farmer: When do you recommend using a buyers agent and when not to? I remember reading that it’s usually a good idea to talk to the sellers agent since they know more about the person selling the property
04/10/06 19:17:48 Mike_Summey: Joshua, once you calculate how much it will cost to put the property in acceptable condition, then calculate the NOI and make your offer one that will work with the NOI minus the cost of the upfits.
04/10/06 19:18:33 Roger_Dawson: If you can find an buyer’s agent who wants to work with an investor, it’s fine.
04/10/06 19:18:38 Eric_NE: How do you keep the books straight with your houses? IE: Do you have a seperate account for the maintenance fund, insurance and tax fund, etc. on each house? Basically, how do you keep all the money straight?
04/10/06 19:18:55 Mike_Summey: jeff, I like using buyer’s agents. Yes, the sellers agents know more about the person selling the property and they have a fiduciary duty to look after that person, not you.
04/10/06 19:19:17 elba_NY: good question, Eric,
04/10/06 19:19:29 Roger_Dawson: The listing agent does know the seller better but they are sometimes reluctant to take them a low offer for fear of upsetting the seller.
04/10/06 19:19:36 Eric_NE: 
04/10/06 19:19:59 jeff_the_farmer: so if you find a property listed by another agent on your drives… go through your buyers agent. So all offers listed by agents go through your own buyers agent?
04/10/06 19:20:06 Joshua: Mike. Suppose I figure the upfit cost is $10K and figure the NOI minus the upfit cost and then get a proffessional inspection that reveals than an additional $5K to $10K is required to get the property in prime rent condition. Do I walk away then? or can I renegotiate the offer?
04/10/06 19:20:23 Mike_Summey: Eric, I treat each property as a profit center. I maintain an annual file on each one and I keep up with income and expenses separately for each one. You have to do this to prepare the Schedule Es on your tax return.
04/10/06 19:20:42 Roger_Dawson: Eric, rule number one is never mix your personal funds with your business funds. Set up a separate account, even for the first $100.
04/10/06 19:20:56 Mike_Summey: jeff, that’s correct unless you just want to work with the selling agent.
04/10/06 19:21:14 Eric_NE: So when you reach Mike’s level do you just have hundreds of bank accounts?
04/10/06 19:21:53 Mike_Summey: Joshua, if you make your offer subject to a satisfactory inspection, if the inspector finds problems you didn’t find, you can renegotiate based on this new information.
04/10/06 19:22:44 Mike_Summey: Eric, you can use one bank account for your rentals, but you must keep accurate records of income and expenses for each property.
04/10/06 19:23:18 Eric_NE: Any recommended software?
04/10/06 19:23:24 Mike_Summey: Hi oz
04/10/06 19:23:42 oz: hi mike
04/10/06 19:24:11 Bob_(vegas): Is anybody using llc’s??
04/10/06 19:24:16 jeff_the_farmer: when presenting your two offers. One low all cash and the other with seller financing… isn’t your seller financed offer going to be the most that you can pay? Or with the seller financed offer, you work it out so that you still have some room to negotiate up?
04/10/06 19:24:57 Mike_Summey: Eric, I’m simple! I use Quicken for my investments accounts and excel spredsheets for each individual property. Nothing sophisticated, but it works. I also use the Offer Generator program to evaluate properties.
04/10/06 19:25:18 oz: mike, how is chase to deal with, regarding short sales?
04/10/06 19:25:19 Mike_Summey: Bob, I hold all of my properties in llcs.
04/10/06 19:25:23 Mike_Summey: I BOB Carr
04/10/06 19:25:23 yameen: Bob - Al Lee had a radio show a few weeks back re: why not to use llc’s. I didn’t hear it, but i believe that was the gist of it. you can check it out on his site.
04/10/06 19:25:28 Bob_Carr: Hello everyone
04/10/06 19:25:50 Mike_Summey: oz, I don’t know. I’ve never dealt with them.
04/10/06 19:26:11 elba_NY: Hello Bob
04/10/06 19:26:38 Bob_(vegas): hmmm…
04/10/06 19:26:40 oz: thanks mike.
04/10/06 19:27:07 elba_NY: Bob Carr. and yes Hello to you too Vegas
04/10/06 19:27:28 Bob_(vegas): Mike do you have 1 property in an llc?
04/10/06 19:27:29 Joshua: Mike, thanks for your insight. I have one more question. I live in the Raleigh, NC area. I was getting Insurance estimates today on the house built in 1951. When I told the agents that I would likely hold the properties under an LLC as opposed to just owning them under my own name, the rate doubled. Were they trying to pull one over on me, or is this the case in NC, and why?
04/10/06 19:27:35 elba_NY: Has anyone heard from Bozo lately?
04/10/06 19:27:40 Mike_Summey: I hold my properties in llcs for estate planning purposes.
04/10/06 19:28:04 Mike_Summey: elba, bozo was with us in the last chat a couple of weeks ago I believe.
04/10/06 19:28:22 oz: has anyone experienced dealing with chase on a short sale?
04/10/06 19:28:24 elba_NY: Thanks, Mike.
04/10/06 19:29:17 elba_NY: Oz, I have yet to deal with chase on Short sales, but Im planning to open my investments accounts with them.
04/10/06 19:29:40 Mike_Summey: Joshua, I’ve never heard of that. I have my insurance with nationwide and when I transferred my properties to llc a few years ago, my policies didn’t change. the policies name me and the llcs as insureds.
04/10/06 19:29:45 Roger_Dawson: Oz, are you buying from someon who needs a short sale to get rid of the property?
04/10/06 19:29:51 elba_NY: Oz, regardless of the bank Short sales are a long process.
04/10/06 19:29:56 Doug_in_CT: Mike, I saw the story in the Asheville Citizen Times. It didn’t mention your new weekly column but that will be interesting to see that when it comes out.
04/10/06 19:30:04 jeff_the_farmer: when presenting your two offers. One low all cash and the other with seller financing… isn’t your seller financed offer going to be the most that you can pay? Or with the seller financed offer, you work it out so that you still have some room to negotiate up? Or do you usually find that sellers want something in the middle ground?
04/10/06 19:30:28 oz: thanks elba, appreciate the reply.
04/10/06 19:30:35 Eric_NE: This is the first time I’ve heard people talk about short sales on this site……
04/10/06 19:30:40 elba_NY: your welcome Oz\
04/10/06 19:30:42 Joshua: That’s interesting, I also have Nationwide as my insurance agency.
04/10/06 19:30:45 Mike_Summey: Doug, the cloumn was mention about halfway down the article. just before the questions.
04/10/06 19:31:03 Eric_NE: Mike, do you get many of your properties through short sales?
04/10/06 19:31:34 elba_NY: Eric, it is just another way to invest in real estate. It is also one that takes loooots of practice and patience.
04/10/06 19:31:43 Doug_in_CT: Oh yeah, I see that now.
04/10/06 19:32:05 oz: yes, roger, I am looking at a duplex that needs to be shortsaled to make worth while.
04/10/06 19:32:09 Joshua: Mike or Roger you guys speaking in the Raleigh, NC area in the near future?
04/10/06 19:32:14 Eric_NE: Have you attempted any yet Elba?
04/10/06 19:32:19 Mike_Summey: Eric, I don’t do much with short sales.
04/10/06 19:32:33 Roger_Dawson: Eric, shortsales are when the bank is owed more than the property’s worth. It might be worth their while to write down the loan if the owner can find a buyer. Not many cases of short sales into today’s market because of the high appreciation.
04/10/06 19:32:53 elba_NY: Eric, I submitted an offer on a property that was in that financial condition. It was not pretty.
04/10/06 19:33:08 Eric_NE: lol
04/10/06 19:33:26 Mike_Summey: Joshua, I spoke there to treia about a year ago. No current plans unless they want to invie me back.
04/10/06 19:33:37 Roger_Dawson: Joshua, I’m not speaking in Raleigh but if you’re near Bogota or Nigeria, I can get you in.
04/10/06 19:34:04 elba_NY: Mike where is Ralph Roberts.
04/10/06 19:34:41 Mike_Summey: Elba, Ralph is leaving us.
04/10/06 19:34:54 yameen: has anyone gotten any benefit out of the larry goins stuff?
04/10/06 19:35:17 elba_NY: Sorry to hear that. Hope his future becomes brighter where ever he goes.
04/10/06 19:35:24 Mike_Summey: Hi slaurain
04/10/06 19:35:34 jeff_the_farmer: do you recommend mortgage brokers or sticking with banks only?
04/10/06 19:35:37 slaurain: Hello
04/10/06 19:35:39 Mike_Summey: Same here Elba
04/10/06 19:36:36 Mike_Summey: jeff, there are times when mortgage brokers can be very helpful, but most of the time they are just middle men who have to get paid for their services
04/10/06 19:36:51 elba_NY: Jeff, I use both. Right now, my brokers appraiser is giving me trouble on my current offer.
04/10/06 19:37:16 jeff_the_farmer: ohh ok, so go for banks… than if they cant help… go for the mortgage broker?
04/10/06 19:37:27 Mike_Summey: Mortgage brokers typically package and sell loans to institutional lenders, but occasionally you will find one with access to private funds and can make a good deal.
04/10/06 19:38:04 elba_NY: Sure, each have their benefits. Mikes point is why I use brokers from time to time.
04/10/06 19:38:27 jeff_the_farmer: so you’ll have to ask around to see who you like working with like banks
04/10/06 19:38:40 jeff_the_farmer: makes sense, thanks for the help
04/10/06 19:38:56 elba_NY: your welcome.
04/10/06 19:39:14 Mike_Summey: The mortgage broker I had in the chat as a guest last fall, John isgrig, is a good broker who has several options. I may invite him back again soon.
04/10/06 19:39:18 Mike_Summey: Hi Sandy
04/10/06 19:40:26 elba_NY: He was a great guest Mike.
04/10/06 19:40:46 jeff_the_farmer: i remember reading a past chat with him in it
04/10/06 19:40:50 Sandy: Hi Mike…took me a while to log on. Used a new browser and it didn’t work. Back to ie
04/10/06 19:40:50 Mike_Summey: I think we are going to start seeing more and more deals as the interest rates continue to creep up. Just wait until the people who financed with arms start getting their first increasses.
04/10/06 19:41:11 Mike_Summey: Sandy, well at least you made it.
04/10/06 19:41:41 Mike_Summey: jeff, John is very knowledgable when it comes to financing investment properties.
04/10/06 19:41:48 Sandy: Yep……also tried your new calculating program. Have questions…..do I email your programmer?
04/10/06 19:41:50 Doug_in_CT: Yameen, I listened to a recording of Larry Goins with Michael Gerber, you can hear the replay at www.BrainPickaPro.com. Lary was very excited about the conversation. But I didn’t hear too much except that you can attend a seminar with Michael Gerber for a mere $3,000.
04/10/06 19:42:22 jeff_the_farmer: do you recommend I go through him for some offers? or find someone locally?
04/10/06 19:42:42 elba_NY: Roger, Mike or anyone else what if any are your experiences with newly built homes?
04/10/06 19:42:46 Mike_Summey: jeff, where are you located?
04/10/06 19:43:08 Sandy: Sorry I missed on the mortgage lender conversation. That is an area I need to learn’
04/10/06 19:43:10 Mike_Summey: elba the two I bought last week are just 4 yeas old.
04/10/06 19:43:18 jeff_the_farmer: vestal, ny
04/10/06 19:43:45 Mike_Summey: Sandy, we will be having some bankers and mortgage brokers in future chats. Just watch youe email notices.
04/10/06 19:43:58 Doug_in_CT: Who did you buy them from Mike? The builder or the first owner?
04/10/06 19:44:02 Sandy: I’ll look forward to that.
04/10/06 19:44:02 Mike_Summey: jeff, you would probably do better with a local broker.
04/10/06 19:44:05 elba_NY: From people not able to afford them any longer? or otherwise.
04/10/06 19:44:29 Mike_Summey: Doug, I bought them from the bank when the owner got in trouble.
04/10/06 19:44:37 Mike_Summey: Hi Theo
04/10/06 19:44:43 Theo_SC: hi Mike
04/10/06 19:44:45 Bob_Carr: Hey Theo
04/10/06 19:44:49 elba_NY: welcome Theo
04/10/06 19:44:56 Theo_SC: Hello all
04/10/06 19:44:59 Doug_in_CT: Did the Bank bring them to you Mike, or do you go looking for them at the bank?
04/10/06 19:45:06 jeff_the_farmer: what are some qualities to look for in a good mortgage broker?
04/10/06 19:45:15 Theo_SC: I am late, had to download Java update
04/10/06 19:45:31 jeff_the_farmer: and services that they should offer to make one better than the other?
04/10/06 19:45:40 elba_NY: Theo the theme tonight is better late than never.
04/10/06 19:45:41 Sandy: Theo…..that was my problem also. I was late too.
04/10/06 19:45:56 Mike_Summey: Doug, I contacted the bank to see if they hand anything I might be interest in buying. They told me about these two houses on Monday. We looked at them on Tuesday and clsoed the deal on Thursday.
04/10/06 19:46:22 Theo_SC: I am glad was not the only one
04/10/06 19:46:50 elba_NY: Jeff that is a good start.
04/10/06 19:47:10 Mike_Summey: jeff, a good mortgage broker should be more than just a loan originator. He or she should have access to numerous sources of funds and be very knowledgable about investment financing.
04/10/06 19:47:40 Theo_SC: Mike, did you get a chance to read my review of the book?
04/10/06 19:47:42 jeff_the_farmer: so I should ask what sources he has available and if he has experience with investors?
04/10/06 19:47:45 Doug_in_CT: So Mike did you use the Offer Generator software to write an offer to the bank?
04/10/06 19:48:17 Mike_Summey: Yes, Theo I did. Thank you. I haven’t seen Virginia’s yet though. She email me and said sh wrote one too.
04/10/06 19:48:30 elba_NY: Make sure that they meet the ideas of your goals. If not try to assess if they could be trained.
04/10/06 19:49:09 Mike_Summey: Doug, I used the one in my head. We didn’t even write a contract. Did the whole deal on a handshake.
04/10/06 19:49:11 Sandy: Mike, do you have a laptop that you can take the Offer Generator….or do you say, “l’LL get back to you on that?”
04/10/06 19:49:17 jeff_the_farmer: thanks elba, i’ll keep that in mind. I find myself explaining my plans/goals so much I have it done to a science =)
04/10/06 19:49:47 Mike_Summey: Sandy, yes I have the program on my laptop and I use it in the field occasionally.
04/10/06 19:49:48 Doug_in_CT: My experiences with Mortage Brokers has been that they tend to be very busy and are interested in adding points to the loan.
04/10/06 19:50:44 Mike_Summey: doug, that’s what most broker do. If they think you need them to get a loan they will pad the fees to make more money for themselves.
04/10/06 19:50:56 jeff_the_farmer: so like property manangers, you’ll have to interview a few of them
04/10/06 19:51:02 Doug_in_CT: I worked with a Mortgage Broker to purchase several houses, he was able to close each loan, but he always wanted 2 points on the loan because, “I am good at what I do.”
04/10/06 19:51:27 Mike_Summey: jeff, that’s true
04/10/06 19:52:08 Bob_Carr: 2 points add’s up
04/10/06 19:53:20 Roger_Dawson: I think that mortagage brokes are just like RE salesperson. Some of them want the build a business by treating you well and some want everything they can get out of each deal.
04/10/06 19:53:25 Doug_in_CT: When I finally purchased a property with owner financing, I was amazed at how inexpensive the transaction could be. There was no $495 orgination fee, $495 broker fee, $495 overnight fee, $495 some more stuff fee, etc.
04/10/06 19:53:35 Mike_Summey: I just did six loan with a new bank in January. First time doing business with them. I got $1,400,000 in total loans with -0- points, -0- fees and prime plus -0-. I think they wanted to do busienss with me.
04/10/06 19:54:15 Bob_(vegas): looks that way mike
04/10/06 19:54:22 Mike_Summey: Doug, when you can get owner financing it is always better.
04/10/06 19:54:24 Theo_SC: Wow!
04/10/06 19:54:35 Sandy: I haven’t been able to think in terms of your numbers Mike. I dream of the day when…..
04/10/06 19:54:52 elba_NY: sorry my son unplugged me.
04/10/06 19:55:02 Eric_NE: damn KIDS!!!!!!!!!!!!!!
04/10/06 19:55:11 Eric_NE:
04/10/06 19:55:20 Mike_Summey: I just made the last payment this month on a property I bought 10 years ago using owner financing at 0% interest.
04/10/06 19:55:39 elba_NY: Doug I share your sentiment
04/10/06 19:55:41 jeff_the_farmer: must be a good feeling knowing the next month it’s all yours
04/10/06 19:55:50 Mike_Summey: jeff, it is.
04/10/06 19:55:59 Mike_Summey: I like it when they pay off.
04/10/06 19:56:07 oz: Mike 0% interest is hte best availalbe ;}
04/10/06 19:56:10 Mike_Summey: Cash flow improves dramatically.
04/10/06 19:56:48 Mike_Summey: oz, I paid the sellers asking price, which was too high, but I got 0% financing which made the deal work.
04/10/06 19:57:11 Doug_in_CT: I am still very glad I made the purchases through the Mortgage Broker, the cash flows to me each month and the properties have appreciated greatly. But I think you have to work you way toward the deals that Mike is doing, slowly and surely.
04/10/06 19:57:20 oz: Mike, htat’ll work ;}
04/10/06 19:57:32 elba_NY: My 1st purchase: with bank closing cost where $7100. With owner financing $126. These were before the $7k Downpayment.
04/10/06 19:57:35 Theo_SC: I am talking with a seller about a similar deal
04/10/06 19:58:08 jeff_the_farmer: you find that for new investors that owner financing is ony the best ways to purchase your first home?
04/10/06 19:58:17 jeff_the_farmer: especially if they have low income
04/10/06 19:58:22 Mike_Summey: Doug, you are right. When I first started, I had to do like everyone else and take what I could get. It took years to get to where I could negotiate with the banks. As they say banks love to lend to people who don’t need the money.
04/10/06 19:58:28 Eric_NE: $7,100 for closing costs? That seems kinda high…….am I missing something?
04/10/06 19:58:29 elba_NY: Jeff absolutely.
04/10/06 19:59:04 elba_NY: Eric, is all about the fees.
04/10/06 19:59:44 elba_NY: The brokers fee alone was 5%
04/10/06 19:59:46 Mike_Summey: jeff, many people own their homes outgright. Some have very small mortgages. These are teh people you have to find to get good owner financing.
04/10/06 19:59:56 Bob_(vegas): well everyone…..great chat and good night
04/10/06 20:00:01 Eric_NE: What are typical closing costs? As a percentage of Purchase price….
04/10/06 20:00:06 elba_NY: Good nite Vegas
04/10/06 20:00:07 Doug_in_CT: Lots of time, the fees at closing include pre-paid items, like a year of taxes or a year of insurance. But sometimes the first payment doesnt come up for a couple of months.
04/10/06 20:00:27 jeff_the_farmer: ohh ok, thanks. I didnt know your first purchase was a seller financed one
04/10/06 20:00:51 Mike_Summey: I’m going to have to leave early tonight too. I have a movie I want to watch that starts at 9:00
04/10/06 20:01:01 Theo_SC: Sorry not much from me tonight, I got a call from a seller who I sent an offer to 2 weeks ago
04/10/06 20:01:09 Doug_in_CT: What is the movie Mike?
04/10/06 20:01:12 elba_NY: Nite Mike. Thanks again\
04/10/06 20:01:27 Eric_NE: See ya Mike…thanks again!
04/10/06 20:01:30 Mike_Summey: Doug, The Ten Commandments.
04/10/06 20:01:38 Mike_Summey: Goodnight all.
04/10/06 20:01:39 jeff_the_farmer: thanks for the help mike, roger, and elba
04/10/06 20:01:46 Mike_Summey: See you next week.
04/10/06 20:01:48 Theo_SC: talk to all next week
04/10/06 20:01:48 Roger_Dawson: Got to run, see you next week.
04/10/06 20:01:54 elba_NY: Come back Jeff.
04/10/06 20:02:03 Doug_in_CT: Oh Yeah, that sounds good. I a big fan of those commandments, they help a lot in real estate.
04/10/06 20:02:03 oz: G/night all
04/10/06 20:02:20 Doug_in_CT: Good night all.
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