Chat Transcript September 18, 2006
Posted on September 19, 2006
Mike_Summey: Hi Ed
Ed: Hey Mike
Mike_Summey: Looks like it’s just you & me for now.
Mike_Summey: Where is everyone?
Ed: I was wander that too.
Al_Lee: Hi, Mike. Ed
Mike_Summey: Hi Al, I was beginning to think Ed & I were going to be the only ones here.
Mike_Summey: Hi Roger
Al_Lee: Mike, you know how us busy real estate moguls are, always on the run
Mike_Summey: Ed, any questions before others get in the chat?
Mike_Summey: Hi oz
Al_Lee: Hi, Roger. It was a great show yesterday
Roger_Dawson: Hi Mike. I had trouble getting in on my Mac so I switched to the IBM
oz: hello mike,
Mike_Summey: Al, I was out cleaning out my truck and almost let the time slip up on me.
Al_Lee: Mac? are thry still around?
Mike_Summey: Hi Bob
Roger_Dawson: Thanks Al — I enjoyed being a guest on your show!
Mike_Summey: Tell him Al.
Ed: Mike when you make an offer for a property what kind of multiples or margin to you look for?
Mike_Summey: Hi ken
Mike_Summey: Hi hottie
Roger_Dawson: I use my Windows so seldom I have to relearn everytime I use it!
hottie: Hi Mike
Bob_(vegas): Grettings from Vegas
Mike_Summey: Ed, I don’t look at multiples of anything. I calculate the NOI a property can generate and then try to structure a deal I can buy it with the NOI.
Al_Lee: Hi, Bob. We are rescheduleing the event to a later date because severl key people had conflicts arise, but I will be at the MGM anyhow
Mike_Summey: Roger, if you’d get a real computer & learn to use it you would be twice as effective.
Ed: I assume alway wanting to keep the cash flow as positive as possible
ken: Mike I got the cassetes and workbook. It’s nice to hear somone talking about the deals. well worth it. I should have gotten the offer generator also.
Bob_(vegas): I saw that
Al_Lee: Ed, positive cash flow is best. Neutral cash flow will become positive over time. Negative cash flow is to be avoided
Mike_Summey: ken, you can still order it! It’s not in short supply and its a great tool.
hottie: Hey Penny
Mike_Summey: Hi Penny
Penny: Hi hottie.
Bob_(vegas): Was going to buy my tickets a few minutes ago and saw the change
Penny: Hi Mike.
Mike_Summey: Al, tommorrow afternoon I’m taking a test flight in a new jet.
Roger_Dawson: Ed, multiples are a very crude rule of thumb because they don’t account for the varying expenses. ROI is a better guage but doesn’t allow for the variations in financing. NOI is really the only way to determine the value of a rental property.
Al_Lee: Bob, one of the people who asked me to reschedule is the president of DFE Real Estate Group, my sponsor. That carries a lot of clout!
Al_Lee: Mike, are you thinking of switching from props to jets?
ken: Mike, How often does your manager contact you? If there is a minor repair needed for the house does she get yoru approval? does she manager contract work also?
Bob_(vegas): Well if you think you might have any time to meet for drinks let me know
Ed: Al, Roger & Mike Thanks
Al_Lee: My daughter, Sydney, wants to see me make a smiley face :>
Penny: Hi there Roger and everyone!
Mike_Summey: ken, I give my managers a $500 limit they can spend on a repair. If it goes over that I want them to contact me for approval. If I have a question, I go look at it.
Mike_Summey: Al, Cessna is trying to convince me I can fly one of their jets cheaper than I can fly a King Air 200.
Al_Lee: Bob I will be at the MGM Fridey and Saturday, so if you call me I will try to meet you. I have a guy form California who registered who said he will come anyhow and have a drink with me. It ain’t hard to convince peopel to meet you in Vegas!
ken: Mike what about projects that cost maybe $4,000 do they manage them also or do you?
Mike_Summey: Hi 1099
Roger_Dawson: Hi Penny! dance
1099: Hey Mike and everyone
Penny: 
Roger
Mike_Summey: ken, larger projects like that I usuall oversee myself.
Al_Lee: Mike, yes. You can come to Dallas and look at a real investor’s market faster in a CitationJet, too.
Mike_Summey: Hi GA Guy
Mike_Summey: Al, but is it as comfortable?
ken: Al I was in waco the other weekend, It was nice. but then they told me they just had 22 days straight of 100 degrees
Roger_Dawson: Mike, I spoke to the manager of a private fleet of planes about you. He’s said you’d move up to one more prop before you went to a jet.
Al_Lee: Mike, Not having to hold yoru bladder as long is comfort in a sense, isn’t it? I had a coffee can on board my plane to deal with that !!!
Bob_(vegas): hey ken try about 100 days straight of 100+
ken: blaaaaaaa
Mike_Summey: Al, a 200 has a flushable toilet on board.
Roger_Dawson: But Waco’s a dry heat. Jump like my microwave oven.
Bob_(vegas): we are having our 4 days of fall this week
Al_Lee: ken, that is right. It is hot. The nice thing is that you don;t have to live here to own property here.
Al_Lee: The property managers can mail you checks anywhere.
Penny: Mike doesn’t your 90 have a toilet?
Mike_Summey: Hi Bob
Mike_Summey: Hi Peter
Al_Lee: Roger, a good comparison.
Bob_Carr: Hi Mike
Peter: Hi Mike
ken: Yes, I owned property 140 miles away I guess it’s no different than 2000 miles
Mike_Summey: Penny, yes it does.
Penny: I thought so.
ken: Al whats a good way to locate properties in the dallas area?
Al_Lee: ken, I own properties 15 miles from my hose that I have never seen and tenants who don’t know who I am. That is the best way. I coudl move to Maui and nothing would change
ken: I like that
GA_Guy: Mike & Roger - I just got a call back from a home owner that I made an offer on about 3 weeks ago. They have found a house that they have to close in 2 weeks and want to unload there house quick! Their house is currently listed at $ 360,000 and they will dump it for $ 290,000. What is the best way to lock them in and put in the least amount of money? Exit strategy is flip it in 3-4 months.
Roger_Dawson: Anybody from Michigan? When I was there 3 weeks ago the median price was $56K and sinking fast. Must be some real bargains now.
1099: Mike or Roger can your get Zig one day on the chat talking about the important of goal setting?
Mike_Summey: I had a long discussion today with a local who has several rentals and is trying to manager them himself. I couldn’t get him to shut up about the problems he was having long enough to tell him to get a manager.
Al_Lee: ken, go to www.findrentproperty.com (one of my websites) it shows projects we are doing. That website is to help brokers who are selling our houses, but you can deal direct with me and save 6%
hottie: Roger, what part of Michigan?
Bob_(vegas): did you say 56K Roger?
ken: ROger I noticed prices going down some also, but i hear that lower fuel cost might start the houseing market back up, who knows
Roger_Dawson: I was in Pontiac, training GM managers to negotiate.
Mike_Summey: GA Guy, I don’t know what to advise you since I’ve never sold a property and even at $290,000 that sounds a bit high for a rental in GA.
Bob_(vegas): maybe you should have been at Ford
Peter: Mike…I have a rental property in Boone with a Property Manger. I went to the Middle East and came back and my the property manager just kept sending my checks to my bank. So I understand the value of a rental manager
hottie: My husband was at Ford
ken: Mike I manage my 2 properties and i’m looking at managers now, I hate the calls, everytime a new tenant gets in i get atleast 5 calls asking questions
Roger_Dawson: Yes, Bob $56,000. That’s the median price for the State. In California it’s over $300,000.
Mike_Summey: Hi David
DavidB: first time
Bob_(vegas): rut ro
GA_Guy: It is definetly something I could not rent. It would simply be something to turn some quick cash for money to use on long term deals.
1099: Welcome David
Roger_Dawson: Hottie. Did the husband leave Ford or did you leave the husband?
Mike_Summey: David, glad to have you. We’re all friendly, so just jump in anytime you have a question.
hottie: Roger, he was training guys there to do Paintless dent repair up there last week. I am still with him, he just travels alot
Al_Lee: GA_guy, I often buy houses form guys who thought they wouel make soem quick cash on a flip. The often end up selling at a loss to get our from under it
DavidB: I am currently listening to your tapes and you talk about not managing your own properties but Carleton Sheets says that you should at first. What is your reasoning?
Al_Lee: They no onger even want the cheese, they just want out of th etrap.
Al_Lee: longer
Mike_Summey: GA Guy, what happens if you buy it for $290,000 and then have to hold it for a couple of years. I feel that we are headed into a strong buyers market which may make selling difficult.
Bob_(vegas): is it a buyers market in Ga too?
oz: roger, they claim THE medium IN CA. IS right AT 600K.
Bob_(vegas): Vegas is prolly at 310K
Roger_Dawson: Oz, that would be high for the whole state but very low in some parts of Orange or San Fran counties.
GA_Guy: things are pretty good in GA and this county is the 3rd fastest growing county in metro atlanta
Mike_Summey: David, Carleton & I differ on that point and we have discussed it many times. I prefer to concentrate on learning to manage the managers rather than learning to manage the properties.
Al_Lee: DavidB, Carleton says you shoudl at first just so you will appreciate what the managers do. You might just accept th elesson without the pain and forego the school of hard knocks
Bob_(vegas): what could you rent the house in ga for?
GA_Guy: i wouldnt try to rent a house in this price range in ga
DavidB: I live on the MS coast and it it hard for me to look at properties the same way. What i thought homes should be going for before Katrina.
DavidB: thanks i prefer to do without the hard knocks
oz: roger I WAS speaking OF THE latest report I SAW from THE greater LA area.
Mike_Summey: Median prices are misleading. All that means is the point at which half the houses sell for more and half for less. Good rentals rarely fall at or nead the median price.
hottie: We just moved and are renting out our old house ($300k), it rented fairly easily because of Katrina. Everyone moved up here
Roger_Dawson: GA guy: Would it make sense for you to live in the new home and rent yours out? There are some serious tax benefits to doing that. If you flip this new house in six months you could be paying 40% of the profit to the irs.
Bob_(vegas): 300 in vegas barely gets 1200 rent
Al_Lee: DavidB. I tlaked about exactly that with Carleton on a radio show and he agrees that you shoud luse a manager. He just thinks it is OK to take a beating for a while so you will respect what the managers do. I did it that way and I really do respect them. Now I just want to cash those checks.
Mike_Summey: Al, from the beginning I wanted to be an investor, not take on a second job that doesn’t pay very well and has a ton of headaches.
GA_Guy: Roger - i thought about it but I don’t think it would work for us.
hottie: I am in the process of finding a manager. The only reason I manage is because i can’t find a manager here.
Penny: good point Roger.
Al_Lee: Mike, I agree with you. What I don;t understand is how you knew that starting out and we had to learn it the hard way 
1099: I see that there is alot of ways that this R.E business can be played
Mike_Summey: hottie, can you find a real estate agent who would like to get into management? You could then train him/her the way you want.
Roger_Dawson: My parents managed my properties for me for years. Mom was a great bookeeper and dad loved to fix things. Bought him a little pickup to drive around in and he was happy as a clam. In return I let them live in an ocean front condo that I owned.
ken: Hottie thats what i’m doing now playing the hunting game.
hottie: Mike, I have taken your advice and I have a prospect real estate agent that says she would like the job.
Mike_Summey: Al, it’s simple! I didn’t have time to fool with management from the very beginning. Also I felt like my time would be better spent putting deals together than unstopping toilets.
hottie: Mike, She just has some medical problems and her husband is also terminally sick. I don’t know if she would work out, but she is really interested.
ken: I learn lots from manageing my rentals, now i’m tired, lots of sleepless nights for little things.
DavidB: would you say that it is best for a new investor to stick to SF homes or jump in with multi units if the #s work
Mike_Summey: hottie, when I first started, I used a real estate agent, but as I kept acquiring more and more properties I eventually had to move to a full time manager.
Mike_Summey: DavidB I recommend sticking with SFHs for the first few until you get some experience.
hottie: Mike, that’s exactly the path I am on. I think she would work out for the time being, but not permantly
DavidB: I would say that I really do not have the time to be a manager. I have an accepted contract for my first.
Mike_Summey: Anyone signed up yet for the Weekend Millionaire at Sea Cruise?
hottie: Mike, We bought our first property from her. She also has had a couple of rentals herself. She got rid of them. She has experience. And I trust her.
ken: al whats that site again, I had to answer the phone and lost it
Al_Lee: http://www.findrentproperty.com
Mike_Summey: hottie, the agent I used in the beginning handled the first purchase I made.
hottie: Mike, Whoaaaa. That’s too wierd…..lol
hottie: Mike as far as the cruise goes, I have to wait on the weather. See what Corey’s work schedule is like.
Mike_Summey: hottie, that same agent managed for me until I had about 30 units and then it got to be more than he wanted to handle and still try to sell real estate.
hottie: Mike, so he went full time for you?
Mike_Summey: I will be making an offer tomorrow or the next day on another house I learn about today.
Mike_Summey: hottie, NO! I had to move to a full time property manager.
Roger_Dawson: When I was in real estate it amazed me how many agents didn’t invest in the product. A lot of them were living from commission check to commission check. They ought to read our Mindset book.
hottie: Mike, just wondering. He must be a really good agent to pass up a deal like that
DavidB: Any suggestions for Real Estate Tax books. Also most of the Real Estate book i read are on the surface. Are there any Real Estate books with lots of meat.
hottie: Roger, I wanted to be a real estate agent, until my husband showed me “The Millionaire” way
DavidB: What do you do if the area you live does not have any managers other than Agents
Mike_Summey: Roger, I can’t say I know anyone who ever became wealthy brokering real estate. Sure some who owned larger companies and benefitted from the work of many agents built wealth, but not the agents.
Roger_Dawson: I can answer the tax book question for Mike. He’s never sold anything so he doen’t know about taxes.
1099: What is the Millionaire hottie?
Mike_Summey: DavidB, I like to think that all of the Weekend Millionaire books contain a lot of meat. You can read them and you don’t have to go toa boot camp to find out what they said.
hottie: 1099, The Millionaire series of books that Mike and Roger wrote.
Mike_Summey: hottie, the lure of the quick buck in the form of sales commission clouded his vision of the steady stream of income he could get from managing.
hottie: Mike, maybe he just didn’t want a regular job.
1099: OK I have to get the FAQ book next I am still reading or better yet studying the other two books hottie thanks
Mike_Summey: Are any of you reading my newspaper articles? I’m putting the link to them in the Monday chat reminders.
hottie: 1099, I got the basics from Secrets to Investing, but Mindset is my favorite
Peter: Yes been reading your articles…really enjoy them
Mike_Summey: The full unedited version of the articles are posted to the website on a one week delay.
1099: Yes Mike they also help me out a lot
DavidB: I don’t plan on selling anything either. I was talking mostly about the tax loopholes, business expenses and such.
Mike_Summey: I’m trying to focus on one single point with each article.
1099: Hottie the Mindset book is off the chain
hottie: 1099. what do you mean “off the chain”?
1099: That means it is one hell of a book hottie
hottie: 1099, thanks, down south I am a little out of it
Al_Lee: DavidB: There are tremendous tax benefits to owning investment real estate and they are not loopholes, but standard provisions in the tax code. What is most importing, in my homble opinion, is that you have a good CPA who knows and keeps up with changes to the tax codes regarding real estate. You do not have to know the code your self.
Bob_(vegas): david how about the book by kiosaki “own you own coorporation”
Mike_Summey: DavidB, you can deduct all expenses associated with rental properties; interest, management fees, plumbing, heating & cooling, grounds maintenance, taxes, insurance, general repairs, etc. plus you get to depreciate the buildings and take that deduction also.
Penny: yes Mike, I read the article in in paper every Friday, then I read the unedited version you post on-line.
Roger_Dawson: David, be sure that you keep a diary of all the trips you take to look at property or meet with anybody about real estate. The current deduction is 48.5 cemts a mile, so it really adds up. You have to keep a record daily. The IRS won’t accept something that you reconstruct if you get audited.
1099: It like real estate it always changing LOL
Penny: I prefer the unedited version.
Bob_(vegas): Mike is the cruise a write off?
Mike_Summey: Thanks Penny. The paper can do some heavy editing at times.
Al_Lee: The best tax book I have read is “Lower Your Taxes-Big Time” by Sandy Botkin. I hav ehad him on my radi show and he really knows his stuff
hottie: Penny, I like the unedited version better, too
Mike_Summey: Bob, check with your tax advisor, but I believe you will find it is structured so it can be a write off.
1099: Can i listen to this show AL?
Bob_(vegas): only if we talk about real estate?
Peter: Al_Lee…how much is reasonable to pay a CPA to do your taxes…I had a CPA do mine for the first time…I have just one rental property so far…and I’m afraid to tell you how much I paid him…what is reasonable fee??
Mike_Summey: Bob, even the shore time will be shown on the iteriery as networking time with other investors.
Bob_(vegas): Mike will you have other speakers? etc???
Bob_Carr: Penny,not a hello or notin!
Al_Lee: You can listen to dozens of my past shows on my website. Go to http://www.RentHouses.org and click on the link for “Streaming Audio”. Then just look over the menu of programs
Bob_(vegas): I like that
Mike_Summey: Bob, it will be just Roger & me for the entire week.
1099: Thanks AL
1099: Thats all you need is M&R
Bob_(vegas): any negotiation on that cruise price Roger?
Al_Lee: I do not remember whether Sandy’s interview is on there or not, but I do recommend his book if you wnat to knwo how to minimize taxes.
Roger_Dawson: I wish I could Bob, but I have this Higher Authority who won’t allow it. YOu do want us to be fair to everyone don’t you Bob? YOu are a reasonable person, aren’t you Bob?
Penny: Hi Bob Carr! So sorry didn’t see you sign on. I stepped away for 5 min. You must have signed on then. How are you!
Penny: Bob Carr, how many properties have you added since you were in Asheville?
1099: Well people have to tune it in good night everyone see your on the same chat time same chat channel LOL
DavidB: Thanks for all the tips
Mike_Summey: We have just been through the biggest seller’s market I’ve seen in my lifetime and now I think we are about to enter what may well be the greatest time for investors I’ve seen in my lifetime. All the stars are properly aligned for the coming years to be a real boom for Weekend Millionaire type investors.
hottie: bye 1099
Bob_Carr: Doing great Penny,hope you are doing grat also.I have bought 9 investments this year.
Roger_Dawson: When you sign up for a cruise like this, you are making a great transition for a consumer to an investor. Consumers say, “What does it cost?” Investors don’t care what it costs, they only think, “How much can I profit from this?”
Mike_Summey: Goodnight 1099
Bob_(vegas): good one roger
Al_Lee: Peter, I do not know a reasonable amount. I pay a lot because I have a very complex tax return, pluys a corporate return, and filings for my LLC and LP.
hottie: Roger, I love your points of view
Mike_Summey: That’s great Bob, you’ve bought more than me.
Peter: ok then..thanks Al
Bob_(vegas): Hmmm….. 5k down on a medium priced home in MI or a cruise for two….
Bob_Carr: Yeah,I need to buy like 987 more to catch you Mike!
Mike_Summey: hottie, what you will learn from Roger alone on the crusie will pay for the trip a hundred times over during your life.
Penny: Thats Awesome Bob. I of course haven’t bought one, still plugging along with my everyday routine. Not a lot of things happening.
Al_Lee: Peter, you might shop around and look at other cpa’s, but make sure they know real estate. I have met many, many cpa’s who do not understand real estate and I do not want them to learn at my expense
DavidB: where can we find info on the cruise?
Bob_Carr: Come on Penny,you have one of the greatest teachers in your backyard!!!
hottie: Mike, I don’t doubt that for a second. I just can’t go on it without my hubby
Al_Lee: Penny, things “happen” to people who make them happen!
Peter: I understand Al…good idea…I’m going to check around…I was in the Middle East when I found this CPA form Oregon…but no I’m back in the USA I can look around more..thanks
Mike_Summey: hottie, Corey needs the trip more than you. Twist his arm.
Penny: That is true Bob.
Mike_Summey: DavidB there is a link to the crusie promoter on the home page of this website.
Roger_Dawson: If any one is in California Email and I’ll recommend mine (RogDawson@aol.com). Your CPS ought to be from your State.
DavidB: Thanks
Peter: Question on the trip…if you are pretty new to investing in rental properties…I have just one so far…do you still recommend the trip or is it more for investors with more knowledge???
hottie: Mike, I don’t have to twist his arm to go. Unfortunately, we still need his income from his work. We aren’t up enough on the real estate investments for him to leave his job yet.
Peter: I’m in Dayton, Oh now Roger…but thanks
Roger_Dawson: Peter: A newcomer to investing has the great advantage of rubbing shoulders with a lot of succesful investors.
Penny: Al, that I am aware of. I just don’t get much encouragement there. I’m still waiting for the right time, still taking care of other obigations.
Roger_Dawson: Penny, I think that if you set a goal of having one positive cash flow property by the middle of next year, you would have it. You would figure out a way to get it.
Peter: That’s true Roger. Thanks.
Mike_Summey: Peter, it will be as helpful to new investors, if not more so, than seasoned investors. We will be teaching the basic principles of real estate investing and they apply to everyone from the first time buyer to the investor with a thousand properties. That’s what so great about real estate investing. You don’t have to be a financial genius to be successful. You only have to know a few basic fundamentals. That’s what we will be teaching and how to apply them.
Penny: Thanks for the positive words Roger.
Mike_Summey: I agree Penny
hottie: Mike and Roger, If it is at all posible, Corey and I will be on that cruise. I know how valueable it will be
Peter: Yes…thanks Mike…I have to give it serious consideration
Roger_Dawson: It would be great to meet you both, Hottie.
Al_Lee: For everyone who buys a house from my company, we will do your Texas State Income Tax return for free ! :p
hottie: Roger, We’d love to meet you.
Roger_Dawson: Hi Mac, where have you been?
Mike_Summey: Hi Mac
Mike_Summey: Click on the blue box on the right side of the home page to learn more about the cruise and then you can contact the promoter for all the details.
Bob_(vegas): night everyone
hottie: Nite, Bob
Al_Lee: Goodnight, Bob
Roger_Dawson: Night Bob
oz: I gotta RUN folks, catch YA later. good chat. g/night
Roger_Dawson: Bye Oz
Penny: Bob Carr, are you still flying?
Mike_Summey: Roger, will you be here next week or is that the week you will be gone?
Penny: your jet?
Penny:
Roger_Dawson: Mike, tell me about your flight tomorrow. Yes, next week I’ll be in Manhatten for a program/
Bob_Carr: A little here in there when I get the time.I need to start spending more time,it is something I really enjoy.
hottie: We’ll miss you Roger
Roger_Dawson: Thanks Hottie.
Penny: Good for you Roger. Don’t you just love Manhatten?
Mike_Summey: I have the president of First Citizen’s Bank’s Western region scheduled for the chat on October 2.
Al_Lee: Goodnight everyone
Roger_Dawson: Penny, it’s a love hate relationship. It fascinates me, but it horrifies me too.
Bob_Carr: Mike,that should be a great one.
hottie: Mike, will he be talking about financing?
Mac: Hi everyone. This is my first chat. I’m an experienced investor who’s done flips and who owns income property. I’m considering investing in fast-appreciating areas out of my home state. What’s the best way to get connected to people that can help: agents, attorneys, mortgage brokers. Should I just figure on flying there and spending a week or so?
Mike_Summey: I’m going to sign off too. Monday night football is coming on. See everyone next week.
hottie: Nite Mike
DavidB: Goodnight everyone
Mike_Summey: hottie, you can ask him anything you want about financing.
Penny: and I know why you are not signing on from there, it cost and arm and a leg from the hotels there!
hottie: Cool, nite nite
Bob_Carr: See you next week Penny.
Peter: good nite mike
Mike_Summey: Mac, join us next week about an hour earlier and lets talk about that.
Roger_Dawson: Mac, the chat goes from 8-9 Eastern time so you got in on the tail end. Join us next weekend and we’ll answer all your questions.
Mike_Summey: Goodnight all
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