Chat Transcript July 17, 2006
Posted on July 29, 2006
Mike_Summey: Hi rrace, I guess it’s just us for now.
rrace123: Hi Mike, Just bouught your offer generator. Looks like a great tool
rrace123: Am I supposed to get a code via email as well as a CD?
Mike_Summey: Thanks! I think you will like it very much. It is a great tool that will keep you out of trouble.
Mike_Summey: You won’t need the code. that was only for the download version.
Mike_Summey: did your confirmation mention that you would get a code?
rrace123: Just made contact with a HUD agent. She suggest I contact her weekly for investment grade homes and pricing. Do you have exp with buyin g below market, fixing a bit and renting thest types of properties?
Mike_Summey: rrace, I’ve bought several HUD properties over the years. The deals come and go as the market ebbs and flows.
Mike_Summey: Hi Ken
ken: Hi
rrace123: What are your thoughts on renting to section 8 folks?
Mike_Summey: So far it looks like we’re going to have a very small crowd. It may be the beautiful and HOT day we’re having. People are out doing other things.
ken: Yes HOT
rrace123: I am in Buffalo and it was 90…that is hot
Mike_Summey: rrace, I’ve never cared much for Section 8, but recently I been accepting more and more tenants from them.
Mike_Summey: Hi elba and justinn.
rrace123: the program looks like it has potential. a bit of prescreening and I think it support a higer rental
Mike_Summey: I think it was around 90 here in the Western North Carolina mountains also. Clear as a bell.
elba_NY: Okay now I made it. Good evening everyone
Mike_Summey: What’s happening Elba?
elba_NY: I could not see you guys for a moment.
Mike_Summey: Hi Jim, you haven’t been with us in a while. Glad you’re back.
elba_NY: Life is good Mike.
Jim_FletcherNC: Hello, Mike
elba_NY: welcome jim
Jim_FletcherNC: It’s rare that I get Monday evening off, sooooooooo thought I’d drop in and say hello
Jim_FletcherNC: Hello everyone………………
Mike_Summey: Jim, did you fly today.
elba_NY: Does anyone now what Loss Mitigation is?
Jim_FletcherNC: Mike…. did you ever sell your Duke???
Mike_Summey: Hi Corey
elba_NY: MIke?
Jim_FletcherNC: Did not fly today…. flew froM Phoenix to Charlotte Sunday AM…. Yexh I hate red-eyes
Mike_Summey: Jim, No I still have it. Want to buy it?
rrace123: Oh oh, pilots… me too. MY skyhawk is getting its annual..sob
Mike_Summey: Hi seattlesun
seattlesun: Hello, Mike and everyone!
Jim_FletcherNC: lol…. I wish I had the means….
elba_NY: hey pgarvey
Corey: Hi Mike
Mike_Summey: Jim, I will fly to Orlando Friday. Roger will be here and will fly with me.
seattlesun: Mike, this is kind of a long question - will do best to keep short!
Mike_Summey: Hi Pgarvey.
Jim_FletcherNC: cool!!
pgarvey: hi all
Mike_Summey: pgarvey, rrace just bought the Offer Generator today. Can you give him your thoughts on it.
elba_NY: Has anyone heard of Loss Mitigation?
seattlesun: Are you familiar with a REI strategy of maximum leverage whereby you refi your primary mortgage - even if a fifteen year w/great interest rate - to an IO loan - to free up $ to buy RE?
Mike_Summey: elba, No I haven’t. What is it?
Jim_FletcherNC: Mike, Are you aware that one can use their ira’s to buy income property?
rrace123: I really like the Offer Generator. In fact, I think its a huge wast of time to not use it.
Mike_Summey: seattlesun, Yes I’m aware of such programs.
ken: Jim i heard that from a ron legrand tape
elba_NY: I’ve been learning about it too Mike. Apparently, Is the method banks “should” use in order to help homeowners that are late in mortgage payments avoid foreclosure.
seattlesun: Great! What do you think of them?
Mike_Summey: Jim, I had Jim Hitt as a guest last fall talking about that very subject.
Roger_Dawson: Hi everyone, sorry I’m late
Mike_Summey: Hi Roger & Penny.
seattlesun: Hi, Roger!
Penny__-): Hi Mikie
Mike_Summey: roger, I thought you had forgotten us.
Jim_FletcherNC: I read a book, “ira wealth” that has some interesting strategies. I don’t think it is for everybody. However, it may suit some investors.
Penny__-): Hi Roger & everyone
elba_NY: method/s. I think they are great seatttle. Unfortunately banks have more people in the collections dept. than their mitigation dept.
Jim_FletcherNC: Hey Roger
Mike_Summey: Jim, I’m not sure you can get financing for an IRA purchase. Don’t you have to pay cash?
elba_NY: Hey Roger, Penny.
Roger_Dawson: Hi Elba, Jim and Penny
Mike_Summey: elba, I’d rather the banks had the people in trouble contact me! 
Penny__-): elba, you beat me in tonight
Penny__-): I’m running slow today
elba_NY: Yeap I did.
Jim_FletcherNC: I am not sure of all the details… I think there is a way to get financing. The key is that everything stays wrapped up inside the ira and is tax-deferred while it is within the ira.
Mike_Summey: Jim, I don’t know too much about self directed IRAs. Maybe I should ask Jim Hitt to join us again soon.
rrace123: How can you get the bank to contact you (me) regarding people in trouble?
Jim_FletcherNC: Mike, is Jim Hill the author of “ira wealth”???
elba_NY: Hey Penny, apparently when loss mitigation does not work people often have to sell in order to save their credit from a foreclosure.
elba_NY: In the WM book, Mike suggest just building a relatioship with the tellers, associates etc
Mike_Summey: rrace, I was only joking. About the best you can hope for is to develop a relationship with your banks that is strong enough that they will tell customers in trouble about you. the banks can’t make the contact themselves.
Jim_FletcherNC: MIke, I am selling all my stuff in California and doing 1031’s to buy properties here IN North Carolina.
elba_NY: welcome shane.
Mike_Summey: Hi Shane.
Shane_Ky: Hi Mike and all.
Jim_FletcherNC: Know of any area I should look at here in the area????
Jim_FletcherNC: Roger, How did you like Africa??
Shane_Ky: Mike I just sent you an e-mail. I have been tied up. make sure that is alright,or I will re do it
Mike_Summey: Jim, that may be a good move. California dollars spend well here. As for areas, any area is good if the numbers work.
Roger_Dawson: It was fascinating Jim. I spent 16 days in Nigeria, where unemployment is 50% and the ones who are working are lucky to make $1 a day.
Mike_Summey: Shane, I’ll check it.
rrace123: I recently met the SVP of a major bank. She is in charge of the REO organization. Any thoughts on how to leverage a contact like this?
Jim_FletcherNC: Roger, We don’t know how good we have it here in the good ole usa!!!
Roger_Dawson: That’s right Jim, not that the few rich people in Nigeria don’t have a great life style.
elba_NY: rrace, thats a great contact.
Mike_Summey: rrace, prove to her that you can be an asset to her bank if she will work with you. the more deals you can bail the bank out of the stronger you relationship will become. My best advice is don’t try to be greedy.
Jim_FletcherNC: Do they have the same Real estate opportunities in AfticA? I would be surprised if they did?
Roger_Dawson: The great thing about American is that everyone gets a chance to be rich. Look at Mike and me. Nobody would us picked us to be winners when we were young.
Mike_Summey: Roger was over there trying to teach the president how to negotiate with the rebels.
elba_NY: rrace keep it realistic.
Jim_FletcherNC: I am not where you and Mike are, but I appreciate what I have been able to do in RE. I am truly blessed.
seattlesun: We just got our first app for our first rental. When checking refs, any “must-ask” questions that will give us good info w/out offending the ref-giver?
Roger_Dawson: I spoke for a bank with 140 branches. They charge 17.5% interest on real estate loans and expect a large down payment. So NOI would be hard to come by.
Jim_FletcherNC: wow!
Jim_FletcherNC: we DO have it good
Shane_Ky: Mike, How does a wrap around work, I am looking at close to 100 units.But dont know if I can get financing. the seller said he possibly could do a wrap around.
Mike_Summey: seattlesun, my advice is to use a professional management company and let them handle that. My management companies get full credit and criminal histories before renting.
seattlesun: btw, Roger, wow. Do you think the prez “got it?”
rrace123: Perhaps we should buy notes at 17% instead of RE
elba_NY: seattlesun, I would ask if they would trust that person with their property.
pgarvey: Roger, with 50% unemployment you would think that interest rates would be better.
Jim_FletcherNC: WEll, I am sorry to be here for so short a time. It was good talking to you all. Mike, Roger, keep up the great work!
Roger_Dawson: Wrap arounds only work if you can assume the underlying financing. Never buy “subject to” existing financing.
elba_NY: Bye Jim
Mike_Summey: Shane, in most cases, a wrap around is not only illegal, but is very risky for you. What if you pay the seller and he fails to pay the first mortgage?
Jim_FletcherNC: Keep your airspeed up, Mike
elba_NY: seattlesun, PM free up your time to get other investment.
Mike_Summey: Jim, sorry you have to go. I haven’t been able to sell you my Duke yet.
Jim_FletcherNC: Roger, take care and I hope I get a chance to meet you face-toface too.
Mike_Summey: rrace, so you’re a pilot also?
Roger_Dawson: Look forward to it Jim
Shane_Ky: So does the mortgage stay in thier name. whos name will the property be in?
Jim_FletcherNC: If you fincnace it for 1.5% over 60 years, I will think about it!!!!
Mike_Summey: Jim, Roger will be here Tue-Fri of this week.
Jim_FletcherNC: unfortunately, I stlll have one of those nasty “jobs”… will be gone then
Roger_Dawson: Shane, their are due on sale clauses in nearly all mortgages these days. If you buy “subject to” and the lender finds out, they can call the loan. Don’t do it
elba_NY: Shane you may want to include a Title Co. or something around the likes to be a 3rd Prty. Keeping the money in a trust acct. They would be impartial.
Mike_Summey: Shane, in most cases, the property is sold on a contract for deed. The seller continues to keep the property in his name until you pay off the mortgage and then it is transferred to you. Very risky and it violates the due on sale clause in most mortgages.
Jim_FletcherNC: bye all………………..
Mike_Summey: bye Jim
Mike_Summey: Penny, what’s with the funky stuff after your name tonight?
Roger_Dawson: I think it reads Penny double under smile
elba_NY: I thought you stepped out Penny.
seattlesun: thanks, elba! good suggestion
Shane_Ky: I may just try to get the financing. I have not made an offer yet, it will be a lot lower than the current asking price. just tring to look ahead.
Penny__-): No, just stepped away from computer to refill glass of wine.
elba_NY: Wine, yummy.
elba_NY: no problem seattle
Mike_Summey: Shane, I just look for your email. Where did you send it?
elba_NY: Bryant, where are you from?
Penny__-): the stuff after my name tonight was a wink & a smile. 
not sure how it came out like it did. Guess I should just stick to plan ole’ Penny
elba_NY: Is great to be different Penny.
Penny__-): good guess though Roger. I think I like that
Mike_Summey: Hi Bryant, I didn’t see you come in. Sorry!
Shane_Ky: I went to you biography. than went to your email.
elba_NY: welcome Bryant. Did you know your name means warrior.
Mike_Summey: Shane, please resend it to mike@weekendmillionaire.com Apparantly the link you sent it to must have gotten broken in the transfer of the website to the new host. I didn’t get it.
Mike_Summey: Roger, where are you tonight?
ken: does anyone do direct mailing?
Roger_Dawson: We spent the weekend with friends in Santa Barbara. There main residence is in Dallas but six years ago they bought this ocean view home on six acres for $3.5 million. Now it’s worth $15 million. All day long I’ve been trying to figure out how long it would take to make $12.5 million without buying real estate.
Mike_Summey: Ken, what type of direct mailing?
elba_NY: :>
Bryant: hello everyone
Roger_Dawson: We cultivate friends who have $15 million vacation homes.
ken: divorces, delinquent mortgages from the court house
Penny__-): cool Roger. Sounds awsome.
Mike_Summey: Roger must have been reading my recent article about making friends with successful people.
pgarvey: Mike, what accounting tool do you use to track your properties?
Roger_Dawson: Great article Mike!
seattlesun: tech difficulties…Aren’t ocean-front property friends nice to have?
Mike_Summey: pgarvey, I use a combination of Quicken Home and Business and Excel. It’s something I developed for my own use.
elba_NY: I think friends with a pool are nice imagine friends with an ocean.
Roger_Dawson: We have a friend who owns a home on a vineyard in Provence, and a friend who owns a home on Lake Maggiore in Italy.
Mike_Summey: Everyone, I’m trying to talk Roger into doing a weekly article on negotiating that we can post to the website weekly. What do you think aobut this.
elba_NY: You do need to surround yourself with people who will inspire you.
Bryant: Mike (or anyone else), do you give any weight to the replacement value of the property in your analysis?
Shane_Ky: Mike I sent it through a different email of mine. It was my fault. Check to see if it got there now.
elba_NY: i.e. all of you guys.
Bryant: Mike, I like the article idea
seattlesun: Any time I can learn more about negotiation, I want to! Used the “flinch” to save $25 on yardwork last week. Thanks
Mike_Summey: Bryant, I don’t. that only matters when it comes to insuring it.
rrace123: To convince Roger to write… I am indiffernt. I believe that is the best postion to take in a negotiation. So Roger How about it?
Roger_Dawson: Bryant, appraisals rarely use replacement value except in uniques properties like churches. The figure the land value by the comparison method and then figure replacement value minus an allowance for the age of the property.
elba_NY: Bryant, long hold investors like us usually do not worry about replacing value but like Mike says insurance a must.
seattlesun: Have to sign out for now, happy investing y’all!
elba_NY: bye seattle,
Roger_Dawson: Bye Seattle
pgarvey: I have to hop off, happy investing all!
elba_NY: bye pgarvey
Roger_Dawson: Elba, was it you that was having some health problems. If so, how are you doing?
Mike_Summey: Shane, I got it! Thanks! Great testimonial. Now send me an email giving me permission to share it with others.
elba_NY: Yes Roger, nothing at all serious just trying to keep it all together. Thanks for the check up.
Shane_Ky: I wrote that in a hurry. Do you want me to tweak it a little bit first?
Roger_Dawson: That’s good Elba
Mike_Summey: Roger, I played golf yesterday with a 16 year old girl. I shot my best round in 10 years (80) She beat me by 6 shots and she played for the men’s tees.
Roger_Dawson: Shane, you could give Mike permission to tweak it.
Mike_Summey: Shane if you want to that would be great.
elba_NY: Ouchy MIke.
Mike_Summey: That’s what I said elba.
Roger_Dawson: Mike, I played on Wednesday and shot 122. So this week you’ve got to give me 42 strokes.
elba_NY: Everyone please say hello to my 7yr old Tyler.
Mike_Summey: Hi Tyler
rrace123: With interest rates at recent highs, do you see softening in asking prices and it more difficult to get cash flow?
ken: Mike, when going to ask for financing is it best to have a business plan? what things would you include on that plan?
Roger_Dawson: Hi Tyler! Are you internet savvy already?
elba_NY: We are teaching Tyler how to take care of his money.
elba_NY: justa little bit
Mike_Summey: rrace, I’m seeing properties stay on the market much longer in my area and I’ve actually stated having some deals brought to me for evaluation. That’s the first time in nearly two years that has happened.
Mike_Summey: elba, do you give him an allowance?
elba_NY: every now and then.
Roger_Dawson: Elba, you should have Tyler read the story of Mike’s early days in Weekend Millionaire Mindset.
Roger_Dawson: Hi Sharon!
Penny__-): Hi Tyler!
Mike_Summey: ken, when I go for financing, I show my bankers the projected income and expenses, the NOI and I show them how I will secure the loan and how I will make the payments. I guess you would call that a plan.
Penny__-): so glad you could join your Mom in the chat tonight.
Mike_Summey: Hi Sharon
elba_NY: Right after he learns about pirates. His favorite subject.
ken: thanks, Yes simple but effective
elba_NY: hey sharon
sharon: Hi, everyone
Corey: Mike what do you mean when you say you show them how you will secure the loan.
elba_NY: how you doing mspenny.
elba_NY: welcome robert
Penny__-): Tyler I am doing great tonight.
Mike_Summey: elba, a small regular allowance is a good way to start teaching Tyler. Make him an offer that you will match what he saves if he will leave it in the account until the is out of school. That way he can double his savings and watch the account grow. It’s a great tool for teaching kids.
Penny__-): Are you enjoying your summer?
elba_NY: His daddy has that deal already.
Mike_Summey: Corey, in my case, I may not secure the loan with the property I’m purchasing.
Mike_Summey: Hi Robert
elba_NY: He will be glad to know you aggree.
ken: Mike do any of your largers apartment buildings have seperate heat for each unit? Here in PA heat will kill a deal fast.
Corey: Mike why wouldn’t you?
Mike_Summey: Ken, I don’t pay heat on any of my units. Most are heated with heat pumps and the heat is part of the tenants electric bill.
ken: Mike here is natural gas, Oil, and few electric.
Roger_Dawson: In California I never worried about paying gas for heating but electricity for air conditioning had to be on separate meters. You wouldn’t believe how much a tenant can spend on air conditioning if they are not paying for it.
elba_NY: Mike you have to understand, eastern cities like ours the owners are responsible for paying heat.
Mike_Summey: Corey, here’s an example: If I own a $100,000 property free and clear and I want to buy a $100,000 property, I can borrow more and get better financing on the property I already own than I can on the new purchase.
elba_NY: north eastern I should say.
Corey: Ok thanks for explaining that to me Mike
elba_NY: Roger my son just asked who you were. I told him you are a smart man that likes good deals on everything.
Mike_Summey: Elba & ken, fortunately I don’t own any units where I have to pay the heat. I do have some where I pay water. The way I handle this is I charge an amount for rent and a separate amount as a water surcharge. My lease give me the right to adjust the water charge during the lease in case usage or rates go up. I adjust the surcharge annually based on the past year’s usage.
rrace123: I am new here tonight. I may be the only one just starting out. How many offers do folks make in a given month, week? etc.
Roger_Dawson: Elba, thanks for the smart man. The lady who runs my company, Lisa Henry, has a four year old son whose name is Tyler.
elba_NY: rrace once you are comfortable with the numbers, the more offers you put out there the better. Once you start getting your 1st deal slown down to take a look at your work.
Corey: Mike if you keep applying for loans for real estate doesn’t the number of inquiries start to bring down your credit score
elba_NY: he finds that funny Roger.
Mike_Summey: rrace, we always have people with varrying degrees of experience which is what makes the chats valuable. Some of us will make more offer than others. the ones who make the most offers usually buy the most properties. It’s a numbers game.
Corey: we had an offer rejected today but that just means we are that much closer to a yes
rrace123: Ok, is a low number 10 per month or is it 25 ? Just looking to understand a pace. I tend to over analyse.
elba_NY: rrace, Im a newby too. We try to do 2 a month.
Mike_Summey: Corey, my banks don’t pull a credit report every time I apply for a loan. I keep them so well informed they don’t need to. They usually only pull a report annually as part of their relationship evaluation.
Penny__-): Everyone I’m saying good night early tonight. Long day. See you all next week. You too Tyler.
rrace123: Seems to me if every offer is just about self funded. 2 per month seems low. Am I thinking about this wrong?
Roger_Dawson: Tyler, why do you think your mommy and daddy named you Tyler?
elba_NY: rrace practice making offers. I suggest getting the offer generator from this website. practice, practice, practice.
Penny__-): Goodnight Mike, Roger, Elba & all
Shane_Ky: Thanks everyone, got to go feed my dogs before it gets much darker
elba_NY: bye mspenny
rrace123: bought the generator today
Roger_Dawson: Bye, Penny
Mike_Summey: rrace, in the beginning if you only do one or two a month that’s not bad. As you get more experience you will be able to do more and have a higher comfort level.
Mike_Summey: rrace, if you make offers using the Offer Generator you will not go wrong.
elba_NY: they wanted a girl named Taylor and when the doctor said it was a boy,they did Tyler. Roger, thats his story and his sticking to it.
elba_NY: rrace, great place to start.
Mike_Summey: I’m going to have to sign off also. I got a bit sunburned today working outside and I’m starting to chill.
elba_NY: Thanks everyone mike Roger. Til next time.
Corey: bye mike
rrace123: good night all and thank you, Bob
Mike_Summey: We will not have a chat next week as Roger & I will be in Orlando for the National Speakers association convention.
elba_NY: Tyler says bye bye
Roger_Dawson: Good night everyone!
elba_NY: Bryant come back
Mike_Summey: Next chat will be on the 31st. Check the calendar on the website for future dates. We’ll try to keep it posted at least 2-3 weeks ahead.
Mike_Summey: Goodnight All!
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