Chat Transcript August 21, 2006
Posted on August 22, 2006
SORRY TO ALL WHO JOINED THIS CHAT EXPECTING TO TALK WITH ROGER. HE HAD A TECHNICAL PROBLEM THAT WOULDN’T LET HIM RESPOND TO YOUR QUESTIONS!: Special thanks to our collegue Al Lee for keeping things going!
Al_Lee: Hi, Roger
Al_Lee: Hi, Krone
Al_Lee: ROger, you still there?
Al_Lee: I am not getting any response from anyone.
Al_Lee: Hi, 1099
1099: Hey there Al
dabeindan: Hi, this is my first chat
Al_Lee: Howdy,
1099: Hello Roger and everyone
Al_Lee: Hi, dabeindan
dabeindan: Hi Al
sparky37: hi al
The_Krone: greetings all
ken: edger My duplexes that i purchased are $1400 a year and i purchased them at $30,000 taxes in pa are crazy for the dollar
Al_Lee: Welocme back, Krone
The_Krone: thanks
1099: hello The Krone
hottie: “hey” to all
The_Krone: hiya 1099
1099: Roger are you there?
The_Krone: liked that Sheets inverview Al.
Al_Lee: You should not focus on the taxes. Look at the whole package ans see if it will cash flow. Taxes are high in Texas, but prices are so low that you can still make excellent cash flow
The_Krone: checked out the archives
Al_Lee: Krone, I enjoyed doing that. He is a real genuine guy.
hottie: dabeindan, where r u from?
dabeindan: IL, Chicago
dabeindan: and you hottie?
hottie: dabeindan, i was raised in Kenosha, wi
dabeindan: very close
Bryant_CA: Hi, Roger, Al, and all
Al_Lee: Hi
1099: Al what do you say about goverment grants for purchasing a home?
hottie: dabeindan, i now live in jackson, mississippi
Al_Lee: 1099, I am afraid I wouel never qualify for a grant.
Al_Lee: If you can get onw, more power to you.
hottie: dabeindan, what’s going on in the Windy City?
dabeindan: good name for that area (hottie)
Doug_in_CT: Hottie I was raised in Madison, WI.
Al_Lee: Are you thinking of getting a grant to buy or selling to a buyer who gets a grant?
hottie: Doug, really? when did you leave?
Doug_in_CT: Wisconsin is a good place to be from….
hottie: dabeindan, doug, most of my family is still there.
1099: thinking of using it to buy a home AL
dabeindan: To all, how much should I trust appraisals?
Doug_in_CT: I left after finishing College. We were in St. Louis, Philadelphia, and finally settled in Connecticut.
Al_Lee: Good luck. I do not know anythign about getting a grant.
ken: I just purchased a course about grants. They seem next to imposible to get unless your a local goverment, or nonprofit.
sparky37: Doug where in CT?
1099: Thanks any way Al
Al_Lee: I am, though, leasing more and more houses on Section 8 where the tenant gets a “grant” form the government to pay the rent.
hottie: dabeindan, what r u planning on doing with your real estate?
Al_Lee: The Section 8 deals are workign out very nicely.
Doug_in_CT: We live North and East of Hartford about 17 miles. It is a great little corridor in the Connecticut River Valley.
Al_Lee: I haven;t gettten a bad chck from the government as yet and they are always on time.
ken: AL i just got my first section 8 tenant lined up I here good things about that
dabeindan: I want to buy and hold but there is a property that appraised for 240k and is selling for 200k
sparky37: I own a property in stamford and have flipped 2 there
Doug_in_CT: I have just started doing a little Section 8 action and so far so good.
hottie: dabeindan, who did the appraisal?
Al_Lee: The Sectin 8 program is much better than it was years ago
dabeindan: hottie, the buyer did it, not me.
Forrest: Al, since section 8 tenants are subsidized, do they tend to care less about their (leased) home?
burt: any suggestions for negotiating w/ Power of Atty who wants consenses w/ many sibs b4 allowing purchase of property?
Al_Lee: We have no problems form the Sectin 8 tenants, either.
hottie: dabeindan, according to the Millionaire programs, it doesn’t matter what the appraisel is or the selling price. As long as it cash flows
dabeindan: hottie:
Doug_in_CT: I found a tenant with some severe disabilities on Section 8, She like my apartment so much she said she never wants to move.
Al_Lee: Forrest, I am building new houses to lease on Section 8. the tenants are so grateful to have a nice house and theyknow that if they screw this up they will be out on their ear. They do whateve rthey have to to hold on to a good thing.
Gene: I understood that tonight’s topic was to be on negotiation. Can there be something on negotiation?
Forrest: That’s good to hear.
dabeindan: hottie: that’s the problem. It doesn’t cash flow so I am considering a flip.
Al_Lee: Gene, do you have a question?
hottie: dabeindan, have you made an offer?
ken: Negotiation would be nice. I came across a guy that said he would let the property rot before he sold it at the price i asked. the funny think was we were only $12,000 off and he got this place from his parents that past away
Gene: I joined the chat to see what was going to be on negotiation this evening.
dabeindan: hottie: no, just was faxed the appraisal 10 min ago, will have to look into it and do comps after the chat.
sparky37: Is Roger here? He is the negotiatior
Gene: Although there is this going on about Section 8 which is working good for the owners and I see that Al_Lee is building a house specifically to rent to Section 8 tenant.
Al_Lee: Roger is the grand master, but it looks like he is disconnected even though it still shows him logged in. I wonder if he is having technical problems.
Doug_in_CT: He negotiaed his way out of the chat room.
hottie: dabeindan, it looks like a little research will be involved, then the negotations start.
Gene: Where is the house being built? How much is it costing and what will the rent be?
noche911: Doug - I’ve got 2 houses I’m looking at, they both are occupied by Section 8. If I can buy at 60% value, is that enough margin?
Al_Lee: Gene I am actually buildign dozens of houses for Section 8
hottie: Ken, do you get a lot of rude people with some of your offers?
Doug_in_CT: Hi Noche911, You haven’t provided enough information yet.
Gene: Al_Lee in what state or area?
hottie: Hey Corey
ken: not really, this guy is a wholesalers for cars so he knows what i’m doing and trying to play the game. i’ll call him in 2 weeks to see how things go then again at the end of nov. once the cold sets in
Doug_in_CT: Buying at 60% of current value is great, but you have to make sure that the cash will flow in the right direction. i.e. toward you.
noche911: Doug - I want to buy both for a total of $130K. They rent for $995 each per month. Trying to figure out if that’s enough profit margin?
ken: others are begging me to take there property but they own to much
Al_Lee: Gene, Dallas, Texas, $103k, $1050 or higher rent. If you want to look at them, go to http://www.TurnkeyInvestments.net and click on the TI#01 listing.
1099: its your show tonight AL
Corey: Hi Hottie
Al_Lee: 1099, I am honored.
Al_Lee: I bet Roger gets his problem fixed and gets back online
Gene: Thank you Lee. I’ll take a look.
hottie: ken, i had a real estate agent want to explain to me why my offer sucked. I love that stuff.
Bob_(vegas): Al do you do anything up in Allen?
dabeindan: I have been doing some figuring but a 120K property needs at least 1200 in rent to cover all expenses. Am I off on that?
ken: Hottie, thats funny. I just show them my papers and break it down to the abc’s on why I can only offer that much.
Al_Lee: Bob, I have hosues up in that area, but not actually in the town of Allen. Nothng wrong with it, but prices may be a bit high
Doug_in_CT: Noche911, have you taken a look at Mike’s offer generator program? Also Carleton Sheets, real estate tool kit.
Bob_(vegas): there is an OWC on ebay from allen
hottie: dabeindan, have you used the Offer Generator Program yet?
1099: It is a good thing to have three great investors AL, Mike and Roger now we are blessed to have Al holding it down
noche911: Doug - I’ve looked at Offer Generator. You think I should try that before I make my decision?
ken: everyone, i get agents sending me properties all the time but there great NOI doesn’t include vacancies, managment fees or anything else
Doug_in_CT: I got the Sheets, Real Estate Toolkit for something like $69 on Mike’s recommendation. It makes it easy to see if cash will flow.
Al_Lee: Since it is my show tonight 
I want to remind all of you to register for our Las Vegas event. Go to http://www.RentHouses.org and click on the big picture of hte MGM Grand swimming pool
ken: does anyone else get that form agents
Corey: Where is Mike tonight
Al_Lee: Hi Elba
hottie: Ken, I explained to this real estate agent even before she showed me the houses exactly what I was looking for. I don’t think she got it.
dabeindan: hottie: I did the demo version, was a little confused. Does that help?
dabeindan: I am using Carlton Sheets toolkit however
noche911: Doug - thanks. I’ll check Sheets out.
Al_Lee: ken, I have had lots of agents tellme they did not want to present my offer because it was insulting. I told them to present it anyhow–that is their job!
ken: Hottie, your right very few agents do get it. I had one guy tell me he would buy the property if he could get it for that amount
hottie: dabeindan, definitely helps. It took me a little playing with it to figure it out, but once I did, it was easy to figure in all costs and generate lots of ways to offer on the same property
Al_Lee: ken, it is untethical for an agent to buy the property out form under you
Al_Lee: but it happens
ken: Al , i’m not sure but isn’t it the law for an agent to present an offer
dabeindan: hottie: Good to know. Thanks.
Doug_in_CT: Noche911, I think it is worth single, double and triple checking your numbers before you make any decisions. Nothing can sour you on the fantastic world of Real Estate like an Aligator that eats up your bank account each month.
Al_Lee: teh agent is obligated to rpesent any offer, regardless how low or high, to the seller.
ken: Yeah i don’t deal with him to much, i get agents that tell me all the time they deal with investors.
hottie: ken, in Mississippi, an agent HAS to present ALL offers to the seller
ken: I have some fun with them, I made a realtor application sheet for them to sign, so far i only got one guy.
hottie: dabeindan, no problem. I wouldn’t make an offer without the program.
Al_Lee: The agent is working for the seller unless you have a buyer’s agent agreement in place with that agent. He/she must present any offer received
hottie: ken, what does it say on your sheet?
ken: Hottie my agent does present all offers but then he says I need to sign the papers for a contact which is alot out of my time.
ken: Its a big lists
1099: Al how do you deal with a high market if you approved loan is only $250,00 and the home are price 300,000 or better in NJ. You should see what they want for these home and it is no bigger thebn my dog house.
ken: If you want it ken@kenhicksjr.com send me an email and I will send it to you its in word.
dabeindan: to all, I missed the sec 8 string. It seems that you can get higher rent with sec 8 vs regular rent. Is that true?
ken: Debeindan, I think each town has there own fair market value of rents.
dabeindan: ken, is that true in your town?
Doug_in_CT: Dabdindan, I was renting an apartment for $695 and when I spoke to the people at the Section 8 office they told me a two bedroom apartment can get $825 in my area. So I decided to take the extra money each month.
ken: not sure how they come up with it but the duplex is only $350 a month rent but section 8 says it’s $345 not sure how they really come up with the number
Doug_in_CT: Then my building has a four-bedroom apartment and I am renting it for $900. I found out section 8 pays $1100 for this size apartment.
Al_Lee: 1099, I receommed to everyoen that they buy in Texs where $250k buys a small mansion. You can pay about $100k and get $1100/month rent and easy cash flow
dabeindan: Doug_CT, your numbers sounds like my.
dabeindan: Ken, where are you located?
ken: PA
ken: my properties are in Johnstown,
ken: properties are under valued there in some locations
ken: I’m looking to expand to the pittsburgh area
dabeindan: Ken: for a $350/mo property, how much can you affoord to pay for the place?
Bob_(vegas): Hey Al…..How are the vegas sign ups going?
Al_Lee: I think that too many investors are paying high prices and having to resort to risky creative financing to make their numbers. If their adjustable rate loan jumps their payments up above the rent, thwy are in trouble. If the balloon payment hits and rates are at 10%, Wham!
ken: duplexes $350 they are around $30,000 plus or minus a few
Al_Lee: Bob, good, so far. My sponsor is the DFW Real Estate Group and they just started promoting it.
ken: I want to expand to places that rent for 1,000 a month instead of 350
ken: 350 each side
Doug_in_CT: 1099 I recommend that you try to find something “close to home” on your first property. Are you looking for your first property?
Al_Lee: They are going to run ads in Investor Business Daily and on radio
Bob_(vegas): will you promote through our local reia groups?
Al_Lee: Bib, I might. I don’t have much to do with the reia groups, though.
dabeindan: Ken, but a $1000 place in Chicago sells for $180k, I can’t make that work.
Al_Lee: the reia groups here seem to be too focused on flipping, which I do not do.
Bob_(vegas): here too…
ken: dabeindan, your right. I use to live in md and invest in PA 150 miles away
Doug_in_CT: dabeindan, You CAN make that work if you get a little more creative.
ken: has anyone dealt with student rentals
dabeindan: Doug_CT, as in creative financing?
Doug_in_CT: Ken, I have rented to students around the University of Connecticut, Storrs (uconn)
Doug_in_CT: There is a housing shortage at this rapidly growing University, students will drive 25 minutes to find housing.
Al_Lee: I recommend that if you rent to students you get their parents to co-sign the lease.
Doug_in_CT: I have found students to be find people to rent to. I usually get one person to be “on the Lease” that is “on the hook” and he acts as my liason with the other students.
ken: doug how was that
ken: I guess we have to negotiate roger back to the chat
Doug_in_CT: I also found that if one on them is a “graduate student” or a little older that this can be good, too.
Al_Lee: I remember leasign a house to three students. Soonon of them came up shrot on the rent money. The other two decided that since they did not have enough to pay the rent, theymight as well buy beer with the money.
Doug_in_CT: I think like an sub-section of the population, there are good students and bad students, you have to do your due diligence.
Gene: Al_Lee What was the rest of the story?
Bob_(vegas): Al what is the discount for 2 ppl attending the show?
Al_Lee: I evicted them and had a lot of cleaning up to do.
Al_Lee: Bob, teh second person is $85
hottie: i almost rented to 4 students. they couldn’t even get it together to sign the lease. i don’t think i’d rent to any students.
Al_Lee: The few times I hae rented to sutdents after that I got their fathers to sign the lease. That was handy because I usually ended up going to him to get the rent
Doug_in_CT: I have had several groups of students (usually they run in packs of four) looking for a four bedroom house. All of my tenants have been good.
ken: Hottie you got mail, check it out you might have to change it around I just use that as a basic understanding so the realtor knows what to expect of me.
dabeindan: hottie: are you in a college town?
hottie: ken, thanks i’ll check it out and get back to you
ken: there is a 3.7 million dollar forclosure sale coming up with about 25 properties or more in it. Hate to be that guy.
hottie: dabeindan, mostly junior and private colleges
Doug_in_CT: I do find that students are usually not long term renters (they are in for a year) and then out. However I did have a women who was a director of the university museum.
hottie: dabeindan, the universities are about 1 1/2 hours away
Bob_(vegas): anyone have luck with ebay auctions for real estate?
Doug_in_CT: She stayed for four years and asked to have her rent raised along the way.
ken: the town i’m in has different zoning for renting to students and families or even you can’t rent to people in that zone you have to buy
ken: doug what do you get a semester per student
Doug_in_CT: We always require a year lease. If they leave early, the owe one month “early release fee.”
1099: having problems with my computer I am going to call it the night good to all and great job Al take everyone.
ken: al when are you in vegas?
Al_Lee: Vegas event is September 22-23
Al_Lee: at the MGM Grand
Al_Lee: Bob gets free airfare to the event
ken: lol nice deal
Al_Lee: You will actually be able to see propertie sand buy them on the spot. You can also meet the key strategic partners who do the proeprty management, lending, etc.
hottie: so who’s idea was the negotation thing?
Al_Lee: The first 50 registrants get a free copy of my book, too. that makes it all worthwhile by itself !!! :>
ken: al are texas prices holding steady
Al_Lee: ken, tey are rising. The cost of land and materials to build houses is going up. Each buildign project we have done is slightly higher priced than the previous because of land and materials.
Al_Lee: The lots we are building on now are costing about $20k. We woeul have bought those lots for $15k a year ago. Maybe $5k four years ago.
dabeindan: al_lee, I am sorry, what do you do?
ken: al what part of texas
Al_Lee: dab… I am an investor. I also manage an investor club for peopel nationwide who want to invest in Dallas/Fort Worth proeprty. I recently also became a builder. I build only rental proeprties and they are designed for positive cash flow.
hottie: ken, i love your form, I suspect most realtors don’t understand it.
Al_Lee: Almost all of my proertie sare in the Dallas.Fort Worth metro area–the fouth largest metro area in the US now.
Al_Lee: fourth largest
hottie: ken, I had a little check list of what i wanted & give it to realtors
Al_Lee: It is also the fastest growing major metro area in the US
dabeindan: al_lee, I see, and you can build to cash flow in a rental market?
Al_Lee: We jsut srupassed the Philadelphia metro area in size
Al_Lee: just surpassed
Bob_(vegas): Al what are the hours on sat?
Al_Lee: dab… that is exactlyu what I do
ken: Philly is big,
Bob_(vegas): my wife has therapy on sat
Al_Lee: Bob, the event is on Friday form 5-0pm and then Saturday 8-noon
dabeindan: al_lee, how can I contact you?
Al_Lee: ken, d/fw is bigger!
ken: Hottie I just made that most realtors just toss it then i know not to waste my time, this guy that did sign it understands what i’m doing
hottie: ken, how many realtors are you working with?
ken: al i can imagen I avoid philly like the plague
Al_Lee: dab… go to http://www.RentHouses.org and loo for the “emal Al” link. You can also register to come to Vegas there
ken: 3
Al_Lee: look for the “email Al” link
Al_Lee: I need a keyboard with bigger keys or something
ken: most don’t like the idea of me working with other agents but I don’t have time to hear there story. they are all in different cities about 60 miles apart
Bob_(vegas): I hav rooms for rent or you might sleep by the pool
dabeindan: al_lee. thanks
Al_Lee: ken, I greo up in nyc, I am familiar with Philly. I would avoid it too
dabeindan: have to run. thanks all.
ken: I hear philly is getting a done, its a better area not to sure thow
Al_Lee: You do need to register soon because the hotel rooms are getting booked up. The MGM only has 8,000 rooms and with the work getting out that I will be there–well…
hottie: ken, i think they get frustrated with me. i’ve got one that i love and she knows exactly what i am looking for
Al_Lee: Elba, how are you?
Bob_(vegas): but serious…..if there is alot of interest from the folks chatting here I would be happy to host an after party to all…..
ken: Hottie i’m not a fan of realtors, it is what it is then move on dont’ get attached to them its business. others may differ
Al_Lee: Bob will also cover anyone’s losses at the tables, righe?
Al_Lee: ht?
Bob_(vegas): only the $2 tables
Al_Lee: Bob, I don;t recall seeing many of them!
Bob_(vegas): many or any?
ken: night I got to jet.
Al_Lee: Bob, there may be soem in those side-street gambling halls, but not in the hotels
Bob_(vegas): So Al how does 194 k sound for a 4/2.5 in allen tx?
Bob_(vegas): 2600 feet
Bob_(vegas): OWC
Bob_(vegas): 5 % down
Bob_(vegas): built in 93
Al_Lee: Bob, if yo were going to live in it it sounds fine, I don’t like rental properties that are over abuot $150k
hottie: good nite everybody!! nice chatting..
Doug_in_CT: Well my son is calling me to help him with the XBox360
Doug_in_CT: Good night all.
Al_Lee: I need to run, too
Al_Lee: Goodnight, see you in Vegas
Bob_(vegas): see all later
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