Chat Transcript November 27, 2006
Posted on November 28, 2006
Mike_Summey Hello everyone!
Al Lee Hi, Mike
Al Lee made it!
Mike_Summey How is everyone tonight?
Mike_Summey Hi gquick
gquick hey everyone…
Mike_Summey Hi Ryan
Mike_Summey Where’s Roger Dawson
Ryan-NC Hello All
Al Lee Who is Roger dawsonlol
Mike_Summey Hi Mark, I just noticed you’re with us tonight.
MarkCT I was able to break away for a little while. Probably won’t last long.
Mike_Summey Everyone, Mark is the programmer who wrote the Offer Generator software, so if you have any questions about it…heeeees the man!
Mike_Summey Hi Penny
Mike_Summey There’s Roger.
Penny Hi Mike.
Penny Hi Roger.
Roger Dawson Hi Everyone
MarkCT How are your construction projects going Al. Do you have any new ones planed for 07?
gquick hey Roger…
gquick mike, do you remember me talking about a FSBO that I was going to look into?
Mike_Summey Mark, are you close to Plantsville, CT?
Al Lee Mark, they are going great. We have 7 houses under construciton now and I plan to do an average of 10/month next year
Mike_Summey Yes gquick.
MarkCT No. I’m not even sure where Platsville is. Why do you ask?
Al Lee I will soon be announcing a new program that will give an investor a Guaranteed Return rom a property
Mike_Summey Mark, sorry…its Plantsville
MarkCT I’d be very intrested in that Al.
Al Lee from a rental property, that is
gquick well I called the house to get some information. it was already sold. $285000. maybe it wasn’t as bread and butter as I thought. 
MarkCT Don’t know where Platsville is either.
Al Lee Mark, watch the new website buyRentHouse.net and it will be there soon
Mike_Summey Mark, just wondering. A radio station there wants me to do an interview next week.
Mike_Summey gquick, that’s why you should go look first and then make decisions.
MarkCT Will do Al. Can you share a teaser with me?
MarkCT Are all the homes your building in the South Dallas area Al?
Mike_Summey Why is everyone being so quiet tonight?
Al Lee Mark, it is simple. I stole the ide form some commercial TIC investments I own. I will sell you a house (or a bunch of houses) and will lease them back form you immediately on a Master Lease. I have the right to re-lease and if I make a differential, it is mine. You have positive returns with no leasing costs, no vacancies, no management fees.
MarkCT Too full from Turkey
KenJ.onAI Hello Everyone
Mike_Summey Hi Ken
gquick mike, what do you mean by that? contact the seller, contact the seller, contact the seller kind of thing?
Penny Just being quiet as usual Mike. Just watching.
Mike_Summey Al, that does sound interesting. I may have to come to Dallas after all.
MarkCT I own something similar for short term rentals outside of Orlando. I bought the property and the seller leases them back to me at specified rent.
Al Lee I cooked two turkeys this year and we are just finishing off the second one.
Al Lee Mike, you absolutely do have to come here.
Al Lee Land at ADS and I will meet you there
MarkCT Al that is a program that I would definately be interested in.
Bob Carr Al,If I knew that I would have been in Dallas Thursday!
gquick what are some thoughts on pre-construction? are they easy or difficult to get into?
Al Lee Mark, we are just woring out the final details, but it should be on the website in a day or two
Al Lee Bob, never miss a chance to come to Dallas. It is always worth the trip!
MarkCT Very good Al. I don’t suppose you could Email me a heads up when its there.
KenJ.onAI Mike, what do you think of the following prospecting stategy. I’ve been looking into finding more prospective houses in one of my target neighborhoods lately. I’ve got a list of homes that need some attention on the exterior, have researched to find the owners names and am sending out letters to their home addresses. What are some of the best ways to contact these owners?
Penny Hi Bob Carr. Sorry didn’t see you earlier.
gquick hey 1099…
1099 hello everyone
Al Lee Mark, I have a subscriber list. If you go to www.myRentProperty.com and click Subscribe and give me your email address you will be on the list and you will be notified.
Mike_Summey gquick, you have to know something about properties before making any kind of decisions. You can usually get enough information by phone to decide if you want to inspect them and then you have to go look.
Bob Carr Hey Penny,everything good with you?
Penny Very goo, thank-you. Hope things are the same with you and yours.
Al Lee Hi, Penny
Penny good
Mike_Summey Ken, have you tried to talk to any of the neighbors to see what they know about the houses and the owners?
Penny Hi Al.
Mike_Summey Hi 1099
1099 Whats up Mike
Penny 2 turkey’s, now thats a lot of bird.
Al Lee Amen, Penny!
Mike_Summey Hi Mark
KenJ.onAI Mike, you’re saying just knock on the doors or show up in the evening when neighbors are around?
1099 Hey Al what time and day is your radio show on?
Ryan-NC MIke - regarding your comment to qquick - whta info by telephone are you talking about? I assume you are trying to determine their motivation level over the phone?
Roger Dawson A comment on For Sale signs. You’re probably seeing a lot more these days. It’s not because more properties are going on the market. It’s because properties are taking longer to sell and the signs stay up longer.
Al Lee My show is on at 2pm Central time every Sunday. You can listen on the web by going to www.myRentProperty.com and clicking the scrolling marquee link at the top of the page
Mike_Summey Ken, I will often stop and talk to people I see outside when riding through a neighborhood. I will let people know I’m interested in the area and ask if they know of any houses that may be coming up for sale or if they know of anyone having problems I might be able to help with.
Penny Al, I was in Florida visitingmy parents for T Day then on to the beach to spend time with my children. Soooo I didn’t get to eat any leftovers from my Mom’s. I didn’t get my fill of turkey.
1099 Thanks Al
Al Lee Penny, I can send you a carcass with plenty of good meat on it. I will also send a gallon of my famouns giblet gravy
Mike_Summey Ryan, if bread and butter properties are selling for $125,000 to $175,000 and the owner is asking $550,000 that’s a pretty good bit of information.
Penny Al
Mike_Summey Hi Steve
Roger Dawson Hi Steve
Al Lee Roger, how are you?
Steve hi mike, roger, and everyone else.
Roger Dawson Great Al. And you?
Mike_Summey Ryan & gquick, make a list of the things you would like to know about a potential property and use it as a guide when you make phone calls.
gquick ryan, what mike just stated is exactly what I ran into. I thought maybe $150000 or so, but once she stated that house was sold I thought to ask what it sold for and found out quickly that they probably wouldn’t have been motivated sellers anyway.
1099 hay Steve
Al Lee Roger, if I were any better I’d be you.
Mike_Summey I may have a good story for you next week if we get closed this week.
Roger Dawson Today we had the first rain for six months in Los Angeles. My orchard was sucking it up.
Ryan-NC Regarding a seller’s motivation; I find that asking a seller directly why they are selling is a great question. Often they are vague with the answer or lie, but I’m looking for wants to sell or NEEDS to sell.
KenJ.onAI Mike, Okay, I guess I need to be more outgoing when I’m out riding the neighborhoods.
gquick i’m assuming needs to sell, mike?
Al Lee Roger: Drought hits SoCal, minorities and women hit hardest.
Mike_Summey Roger, I flew to Tallahassee for the FSU/Florida football game and didn’t see a single cloud going or coming or while I was there. The weather here has been beautiful for days.
Mike_Summey Ryan, good point.
Mike_Summey Ken, you don’t learn much about things if you ride around with the windows rolled up and don’t talk to anyone.
Roger Dawson I’m speaking to Harvard Medical School in Boston on Friday, so it’s winter drawers on!
Mike_Summey Hi justin
Al Lee Roger, that is pretty impressive
KenJ.onAI Mike, Florida State gave Florida a run for their money eh? That was a loose-loose situation for Florida, not much to gain unless they blew them out.
KenJ.onAI lose-lose
MarkCT Mike would you enter a situation in which you would refinance a property to cash out some equity even though it would produce a negative cash flow for the purpose of buying another property that would be cash flow positive. The net result of the two properties would be a cash flow positive investment (one property loosing and another property making up the difference)?
Mike_Summey Ken, you’re right there. Watch out for FSU the next couple of years. I think they are the youngest division I team in the country this year.
gquick MarkCT… good question.
Ryan-NC Also, I generally ask what the mortgage balance is … what the monthly PITI is etc …. fairly sensitive financial info, but important for an investor. Anyway, if they balk or say isn’t none of my business, I assume they are NOT very motivated. Motivated sellers have no problem with discussing this information.
Mike_Summey Mark, that all depends. Would you have at least as much positive cash flow with the two properties as you now do with the one?
Al Lee Mike, even if he had the saem positive cash flow, he would have more appreciation and more depreciation allowance.
Penny Yes Roger. I believe I’d leave the sunny CA clothes at home for that trip.
MarkCT Yes the net result would be a positive cash flow situation. The downside is that if the second home is vacant the first home (the refinanced home) looses monet every month.
Mike_Summey Ryan, one question I ask is, “If I can meet your asking price, would you be able to finance part of the purchase?”
gquick mike, if we are looking at the long term and we have a positive cash flow, would that really come into play if 2 homes could be owned instead of just one? banking of continuous positive cash flow.
Al Lee Mark, right now if the first home is vacant it looses money every month, too
MarkCT Appreciation is speculative though.
1099 Al is cash flow and equity are these two is what one should consider in when buying an investment porperty ?
Penny Roger, do you alter your your speaking topics for medical students?
Al Lee ith two houses a vacancy is only a 50% vacancy. I would rather hve the two properties.
Penny or do they get the same great negotiating tactics also?
MarkCT No Al the house owned currently produces positive cash flow. Only when I cash out of it will it produce negative cash flow (due to taking on a bigger mortgage).
gquick Al, thanks. that’s what I was thinking, but does Mike agree?
Roger Dawson Penny, I’ve done so many talks in the healthcare industry that I’m familiar with their challenges. The framework of the talk is the same but I tailor it to healthcare.
Mike_Summey Mark, that’s true, but Al is correct in that you are gaining appreciation on two properties rather than one and if one is vacant you’re only 50% vacant whereas if you only have one house and it goes vacant you’re 100% vacant.
KenJ.onAI Thanks for the chat everyone, I’ve got to go and will read on as I’m interested in hearing the chat about two property cash flow.
Al Lee Mark, yes, but if it is vacant it will be negative, right. With two hosues one vacancy is just 50% vacancy. Now one vacancy is 100% vacancy
MarkCT So Al and Mike you would suggest doing such a deal correctA?
Penny thats interesting Roger.
Roger Dawson The biggest problem I had when I spoke to Harvard Medical School before is that they are all so much more intelligent that I!
MarkCT Its what I’ve been leaning towards but I wanted some expert opinions.
Mike_Summey Mark, if you don’t have to give up too much overall cash flow, I’d do it.
MarkCT Thanks Mike.
gquick MarkCT, how long have you been investing in real estate? I’m still wet behind that ears. I’ve bought and sold my primary residence but never actual REI.
Mike_Summey Roger, if you can’t dazzle them with brilliance, you can always baffle them with BS. 
Al Lee Mark, I have done simialr things. I am expecially fond of doing that if current interest rates are low. I use 30-year fixed-rate loans, so I grab all the cheap money I can get. Later on rates will be higher and I will be laughing when I make thow payments.
Penny I doubt that Roger. What I find with a great deal of the medical professionals is they don’t focus on much outside of their field. I’m sure your are much more multifaceted in your knowledge.
Al Lee Mike, is is unkind to give away Roger’s trade secrets.
Steve Mike, is your initial offer your best/maximum offer or do you usually start a certain percentage below your highest offer?
gquick What’s that Al? Mike has trade secrets?
Penny Hi there zert.
zert Good Evening
gquick hey zert…
Mike_Summey Mark, I keep refinancing my properties to consolidate the debt on fewer and fewer properties. I’d rather have mortgages on 5 properties and a bit of negative cash flow on each and have 5 others free and clear than to have mortgages on all ten and have them all cash flowing.
Mike_Summey Hi zert & Raleigh
raleighbound good evening everybody
gquick good night raleighbound
Mike_Summey Mark, assume you start with 10 properties that each have $100,000 mortgages and monthly payments of $1,000. After a few years, you may be able to refinance 5 of them back up to the full $100,000 and only have 5 $1000 payments plus all of the income from the other 5.
Penny Hi raleigh, headed to Duke or Carolina? or just moving to Raleigh?
zert Mike - when do you suggest doing the refinancing? and carrying a negative cash flow?
raleighbound just moved to raleigh 10 mo. ago from ft lauderdale,fla
Roger Dawson Mike, negative cash flow is when you’re paying out more than you’re taking in. I thought you’d be unfamiliar with the concept.
Al Lee Let’s assume that you can get 7% cash-on-cash ROI using yoru cash as down payments to buy properties. that is pretty reasonable.
Penny good for you.wlecome to NC from Fl. Same for me many years ago. Been in NC for 20 years now, I think I’ll stay a little longer.
Mike_Summey zert, there’s nothing wrong with having a negative cash flow on a property or two if you have others that you own free and clear or than have adequate cash flows to cover the shortages. I’d only go into deal that would produce negative cash flow if it was to restructure to improve overall cashflow.
Al Lee sume that you will pay 7% interest on money you owe for real estate. Again, reasonable.
raleighbound i got tired of summer during 10 of 12 mo. of the year
Mike_Summey Raleigh, you’ve moved to a good investing area.
raleighbound i hope so mr summey, one question…
zert Mike - negative cash flow makes me nervous, but I agree with your point thanks
Al Lee If you refinaince a property and netted $20,000 cash that you coudl use to buy more real estate with your cash effect would be zero using an interest-only fixed-rate loan. You woudl then be gaining the apprecaition on the new property your bought as a bonus. You would also have more depreciable assets to use to offset income for your tax return
gquick Mike, Al, everyone else, thanks for the advice and talk with you next week. I’ve got to go…
Al Lee goodnight, gquick
1099 see u gquick
Al Lee When rents go up, as they tend to do over time, you will have two rents that increase, not one.
Penny Thanks Al. I was just trying to figure out wording to ask Mike to clarify.
zert Al Lee - could you say that again, you lost me
1099 Mike and Al and Roger when having a PM taking care of everything do you want to know who the tenant thats living in your renting out your porperty?
Mike_Summey zert, assume you have the 10 houses I mentioned earlier and they all are about break even cash flows with $1,000 payments monthly on the original mortgages. Can you see how you might be able to refinance half of them with mortgages that have payments of $1,200 each and free up the other half. Then you would reduce you mortgage payments from $10,000 monthly to $6,000 monthly, but the houses with the mortgages may have a $100 - $200 negative cash flow.
Al Lee zert, we were discussing whetner you shoudl refinance a property you won to get cash to buy another property. I say, yes. the more propertie syou own the more benefit you get from real estate and the more diversified you are.
raleighbound im renting my house in ft laud,fl for $1400/mo and taxes and insurance went up exhorbitantly after hurricane Wilma last october, i know u dont like negative amort. loans but i think im gonna have to do it to pay some credit cards ($25000) and to buy a lil’ house in or around raleigh for as much cash as poss. +- $80000, u think is a good idea? even hough is neg amort??
Roger Dawson 1099, if you trust your property manager, there’s no need for you to know who the tenants are.
Mike_Summey 1099, I don’t want to know the tenants and I don’t want them to know me. That’s one of the big reason I use propeerty managers. I’m an investor, I’m not looking for headaches.
1099 Kool
zert Mike - got it!! I tend to look at each property individually since I am new but I totaly understand your concept and it sounds good to me
Al Lee 1099, you will normally be given information about the tenant applicant and be given the right to reject or accept any of them. I have a maanger I trust sufficiently that I told her not to bother me with detials like that and to use her judgement. I works well in my case
Mike_Summey Raleigh, the biggest reason I don’t like refinancing to pay off credit cards is because your letting the bank trade unsecured debt for secured debt and what are you getting in exchange?
1099 Ok that seems to be the way to go when you find a good PM thanks guys
Mike_Summey 1099, find a good property manager and then let him/her do their job.
Ryan-NC raleigh - I agree with Mike. However, I understand the motivation of smaller monthly pmts
Al Lee Mike, another reason is because it givew you more buying power and unless you have cured your spending problem you will be back in debt again big-time and with no equity left to bail you out
Mike_Summey Good point Al.
Al Lee Thank you
Roger Dawson 1099, you do have to trust your property manager. If you’ve got someone who’s thinking “I make 15% of the rents so I’m going to rent to anyone who comes along” you’re heading for big trouble.
Mike_Summey Roger, that’s why an investor should manage the manager and let the manager manage the properties.
raleighbound thanks for the advice
Ryan-NC Roger, a good point. I find many PMs have that attitude.
Al Lee PM’s are like doctors, computer programmers, and everyone else. 20% of them are good, 20% are bad, and 60% are mediocre. Find a good one!
Mike_Summey Ryan, managers with that attitude don’t usually last very long. Most investors are not fools.
raleighbound so , in essence, let the possitive cash flow pay for the debt lil by lil instead of paying it all at once
Mike_Summey I recently had a heart to heart discussion with one of my property manager because ceertain maintenance expenses were running 2-5 % higher than what they have run for the past 20 years. I said get the expenses in line or I will find someone who can.
1099 Well Al, Roger and Mike Without action your dreams are worth Nothing. Now where did i hear that from? LOL Everyone take care until next week Good Night.
Mike_Summey goodnight 1099
Al Lee Goodnight, 1099. that sure sounds like sage advice.
raleighbound til next week 1099
Al Lee I also used a lot of sage in the stuffing on T-Day
Mike_Summey Al did you hear about the blond’s mother in law who slipped a cornish henn into the turkey and then stuffed it. When they cut it open the blond said “Oh my gosh, I cooked a pregnant turkey.”
Al Lee BTW- a report came out regarding appreciation in the major US metro areas. ALl fo the Texas areas were positive (up to 9%), while the national average was negative (-1.2%) with 45 of the 150 areas showing losses.
Al Lee Mike, I did hear that. It must have been on the internet!
Al Lee I have been saying that Texas metro ares wouel see up to 9% appreciation while the reast of the country sees declines for the past year or more.
sedwards hello
Al Lee hello
Roger Dawson Why is that Al? Is your population growing?
Al Lee Roger, Yes, and also we are way under-valued statewide. Dallas/Fort Worth is under-valued by 20% according to National City Corp.
Mike_Summey Everyone, just FYI. When I update my financial statement each year I use either purchase price, tax value or certified appraisals as a base and then increase values 3% per year for inflation until I get another tax or certified appraisal. I find that its conservative and the banks totally accept it.
Mike_Summey Hi sedwards
Al Lee Roger, also all the taxpayesr in California are moving to Texas 
sedwards Am I too late to join?
Mike_Summey sedwards, late, but not too late.
Roger Dawson Sedwards, you’re welcome
Al Lee sedwards, you have joined.
sedwards Thank you, this is my first chat
Al Lee Mike, in Texas we get a re-appraisal form the country every year on every property so we do not need to interpolate.
Mike_Summey sewards we’ll be quitting in a few minutes, but if you have a question or two, let’s have them.
Roger Dawson I don’t watch football but I understand the game started at 8.30 so we’ve probably lost a few.
Mike_Summey Al, here we only get it every 4 years and that only happened about 10-12 years ago. Before then it was only once every 8 years.
Mike_Summey Game starts at 9:00 Roger. Kickoff a little after that.
Mike_Summey pamela, you’re being awfully quiet tonight. Just watching?
sedwards Actually i have reviewed your material (book x2 / audio x 12+) I am looking to get back in the market and would like to still learn from ou all. Thanks for the chance
Al Lee Texas figured out that they could increase the tax revenue by re-appraising every year. Our values ordinarily go up every year, so they get more money. The rates were just lowered, so that offset the last year’s increase in values
Mike_Summey sedwards, we’re here every Monday night from 8:00 - 9:00 Eastern. Where are you located?
Al Lee sedwards, the transcript of this dialogue will be posted on the website for you to read any time
sedwards chicago market
Mike_Summey sewards, we start at 7:00 PM your time.
Roger Dawson In California we fired all the county appraisers 20 years ago. The value is what you paid for it plus a 2% increase every year.
Al Lee Roger, now fire the tax collectors and it won;t matter
Mike_Summey I have a problem in NC with the way appeals are handled if you thing the new valuations are too high. The property owner has few options if their appeal is denied.
sedwards Thanks, I have had 4 profitable flips and 1 new construction. Time for me to start planning for the future.
Roger Dawson I need to leave you now. I’ll be on the road next Monday but will join you again the Monday after that.
Al Lee Roger, you have to figure that Texas has no state income tax, so property taxes is the main source of revenue
Mike_Summey sedwards, I don’t do flips. I’m an investor and that’s what we are trying to help everyone else become. I’m not much for speculating.
Mike_Summey I still own every property I’ve purchased for the past 35 years.
sedwards Thats the transition I am making
Mike_Summey I’m going to have to run also. I have a few other things to attend to before bed.
Mike_Summey Goodnight all.
Mike_Summey The rest of you can stay and talk as long as you like.
Al Lee sedwards, you were not yet logged in here, but I mentioned a new program that will offer guaranteed returns on new construcitn rental properties
Al Lee sedwards, look at the beginning of the trnascript or go to buyRentHouse.net - the details of the guarantee are not yet on the site, but will be soon
zert Al_Lee I wasn;t here as well ,
Al Lee zert, than what I said is to you, too. The detaisl of the guarantee are not yet posted, but will be soon. The descriptions of the properties is already there
sedwards I had done the past work to finance the new construction for myself. I am now in the position to hopefully purchase rentals in cash and then refi
zert thanks will check it out
Al Lee sedwards, that is a good way to do it if the appraised value is higher than the purchase price. I have done that often.
sedwards Is there any reason the finance is based on 15 / 20 years instead of 30?
Al Lee sedwards, I always use 30-year and I recommend that
Al Lee where are you seeing 15 / 20 years?
sedwards I had seen those in the material.
sedwards I may have misread
Al Lee are you taliking about Mike and Roger’s book? Mike likes 15-year financing. I use 30-year and have good reasons why. go to my other websites, www.myRentProperty.com and www.RentHouse.org and you will find articles and my recorded radio shows. i often talk about financing.
sedwards thats the material i was refering too (mike/roger)
Al Lee Mike and I have a few differences of opinion on a few things and financing is one of them
Al Lee We agree on 90% of everything, though
sedwards not too be rude, but what is your affiliation with mike
Al Lee we are just frineds and bot are real estate investors
Al Lee both of us
sedwards do you follow his system or your version of it?
Al Lee Mike and I started investin in the mid 1970’s and we each have our own systems and I also wrote a book. you will see it on the websties.
Al Lee We don;t follow one another’s systems, but both work. I just like to use other people’s moeny (the bank’s) as much as possible to make me money. Mike likes to have propertie spaid off. I think the Return on Equity is too low if the property is paid off
zert Al_Lee it seems that you are comfortable with large amounts of debt?
sedwards as i said earlier, i am just getting into the rental market from the rehab market. i am in a highly inflated market and am educating myself for smart long term investing
Al Lee zert, ther is Good Debt and Bad Debt. I have zero Bad Debt. I have millins of dollars of Good Debt. Good Debt is debt that make sme more money than it costs
sedwards debt does not scare me as long as it is balanced with returns
Al Lee I suggest you go to my websties and read and listen to all the stuff I have there for free. You can also buy my book, if you like, but you may not need to.
zert Al_Lee : can your radio transcripts be downloaded to a cd or MP3 player so that they can be listened to in a car or some other location?
Al Lee balanced with returns is a good way to look at it. If I can borrow at 7% and can make 35% return on my money (both are realistic) I will be wise to borrow all I can and invest the money in as many properties as I can
Ryan-NC I can borrow the bank’s money at 7% - but the annual rate of appreciation in NC is about 3 - 5%. So, am I actually making money in this market?
Al Lee Ryan, if you get 7-10% cash return form the rent after expenses and get 5% appreciation and used 80% finaincing, you will have 30-35% overall returns. The appreciation of 5% on a $100,000 property is a 25% return to you if you only paid $20,000 down.
Al Lee I recommend to everyone that they invest in Texas, specifically Dallas/Fort Worth right now. That is regardless where you live.
sedwards Why
Ryan-NC hold on … I’m thinking through those numbers … seems to make sense …
Al Lee There are many reasons. Look at those websites I referred you to. ALso, look at the articles I have written and posted to the myRentProperty.com website
Al Lee not only does it make sense, it makes you R I C H. I assure you it does!
sedwards Texas?
Al Lee Absolutely, Texas.
Al Lee It is the B E S T market in the US. I even have Carleton Sheets saying so on one of my radio shows.
Al Lee Mike Summey also will tell you the same thing
sedwards I am not to sure of Carleton’
Ryan-NC any market that hasn’t had hyper appreciation in the last few yrs - is probably a good market to invest in …
Al Lee Carleton Sheets is really an investor in real estate and really does know a lot about it. Many of the gurus today are just promoters, but he actually does invest in real estate
Al Lee Ryan, that wouel be Texas–especially Dallas/Fort Worth.
Al Lee FW is the fastes growing metro area in the country. It just surpassed Philly as the Fourth largest metro area
Al Lee D/fw, not fw
Al Lee It is the numbe rone corporate relocation destination in the US
Al Lee Housing in D/FW is 20% undervalued according to National City COrporation
Al Lee On and on,
sedwards hoe does one invest somewhere they cannot go?
zert faster than Orlando?
Al Lee The D/FW area adds 365 people a day, every day of the year.
sedwards how does one invest somewhere they cannot go?
Ryan-NC out of state investors uses PM -
Al Lee sedwards, it is explained on the websties. There are property manages, lenders, insurers, etc. all lined up to handle evey aspect of buying and managing properties
sedwards P
Ryan-NC but I’m not a big fan of investing outsiode your local market
Al Lee I have directed hundreds of people form every state in the country to buy many hundreds, or maybe thousands, of houses in the area.
Al Lee Ryan, if you local market is not a good investment area then shoudl you just not invest?
sedwards time to put the kids to bed. these conversations take place mon-sat at 8?
Al Lee I live in the area and I have never seen half of my own properties and never plan to. I have competent professionals to handle everything and I let them do it.
Al Lee Monday only at 8pm Eastern time (7 Central)
kerry My husband & I try to handle it all ourselves and we both work full time. It’s hard!
Al Lee You can log in any time, though, to see if there is anyone else here to chat with.
sedwards Thanks everyone.
Al Lee kerry, you shoudl N O T try to manage yoru own hosues
Al Lee Go listen to my radio shows with Carleton and Mike for our experience with property management.
Al Lee I need to go now.
Al Lee goodnight
kerry We just started 2 years ago. We’ve bought about 10 houses so far. We remodel them ourselves. We get them so cheap! Is anyone left to talk to?
kerry We are still learning.
Eddie-NC yea, still here
zert still here
kerry so where is Mike Summey & Roger Dawson?
Ryan-NC they are here from 8 - 9pm.
kerry I forgot - It’s just now 9:00 here in Alabama.
zert kerry where are the properties located taht you purchased
kerry WE purchased all the properties here in Covington County in a small town called Andalusia. WE have 1, 2, and 4 BR houses - and bought all of them for under $20,000 each!
kerry We rent them for around $350-$400/month
kerry I need lots of advice - but it can wait until another time if it’s too late now.
zert do they all cash flow?
Ryan-NC well - here in NC - you can barely buy a vacant lot for 20,000
Ryan-NC are they in good shape ….
kerry Yes. only one is paid for. The others are only about $160/month each at our bank.
Ryan-NC hard to get a mortgage on a property for less than 100,000
zert 160 / month for mortgage. what are the taxes, maintenance costs
kerry Some needed work - we remodeled them - just new flooring, sheetrock, etc. nothing major.
kerry I just bought a 2BR 1bath last month for $12,000! It rents for $350
kerry Taxes are very cheap -less than $100 year each. My husband does all the maintenence
kerry I’ll be glad when we can do this full time
zert what $$ do you spend in maintenance? and are there any other costs associated with owning and managing the property?
kerry We haven’t spent very much so far - only a few minor things - There are no ther costs - cost of living is less here. I manage all of them - we have no management fees. I also teach 4th grade full time.
zert are they all rented or do you have vacancies?
kerry right now we have 2 vacant - I bought them 2 months ago for $15,000 (for both) they needed some work, so we are still working on them. They are 2BR 1 Bath. It will be a while before they are ready. Are we on the right track? They will all be paid for in less than 10 years.
zert well it looks as though you are. If your rent is 350 and your expenses are are 180-190 (mort+tax+repairs) that means that you are seeing 160 per month in cash which is great. One is paid for and some others are close
kerry We have 60 acres of hunting/recreational land for sale on a river if anyone is interested - $3250 per acre.
kerry All the profits we make every month we use to buy materials to remodel the next house. We never use the $ for personal use.
zert smart move. you could use some to repay the debt or to hire some of the repairs to free up your time.180 per month cash flow with 10 propertuies is 1800/month not too bad
kerry My husband is an electrician offshore - he is only here 2 weeks out of the month, so it takes a while to get one remodeled. We have a guy hired right now to work on one while my husband’s gone.
kerry do you guys have other jobs besides real estate?
zert yes I do
kerry Do you recommend “flipping” a house, or just keep renting?
zert I do not understand flipping well enough, I would like to keep properties for a long time like Mike recommends. Would like to retire and live off of the cash flow
kerry me too. that’s the plan
kerry got to get the little one out of the tub…nice talkin’ to you - thanks for the advice!
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