Chat Transcript December 11, 2006
Posted on December 12, 2006
Roger Dawson Hi jwright and sedwards!
jwright hello roger
sedwards Roger Dawson Hello, I enjoy using your techniques From your pwer negotiating course
Roger Dawson I’m here in Southern California where the sun is just setting on a beautifully sunny day.
Roger Dawson Thanks Sedwards. Glad it helps.
Roger Dawson Where in the country are you located?
sedwards I am in Chicago where its cold and rainy
Roger Dawson I hear that Chicago didn’t see the enormous run in prices that much of the country saw.
Roger Dawson Hi Doug
Doug_in_CT Hi Roger
Doug_in_CT Where are you tonight?
sedwards Roger Dawson the suburbs sure did. The banks were giving money away
Roger Dawson I’m home in La Habra Heights CA. Last week I was in Boston speaking to Harvard Medical School and then Springfield, MO.
Doug_in_CT So you were treated to some So. Cal. New England weather then?
KenJ.onAI Hello Roger and everyone
KenJ.onAI Doug, sedwards; good to see you’re back on
Doug_in_CT What do the folks at the Harvard Medical School need to Negotiage? An arm or a leg?
w1099 hello everyone
Doug_in_CT Hi KenJ
Roger Dawson There was a front page article in the LA Times today about how many people have optional payment loans. If you like you can make a half payment and the interest is added to the principal. I in 3 loans here were written that way here last year and it’s a dangerous position for a borrower to be in.
Roger Dawson Hi Mike
w1099 Mikw $ Roger whats up
sedwards KenJ.onAI Thanks - I have alot to learn.
Roger Dawson Hi w1099
Mike_Summey Hi everyone! Sorry I’m late, my computer decided to crash just as I was getting into the chat. Had to shut down and restart.
KenJ.onAI Me too sedwards, me too
Roger Dawson Get yourself a Mac, Mike!
sedwards Mike_Summey hello
Doug_in_CT You gotta hate that, slow rebooting Windows XP.
Mike_Summey I had too many things running at the same time I think.
KenJ.onAI Mike, you just need a bigger computer
Mike_Summey Doug, thanks for the tip on shorting the URLs for the articles. Did it work today?
Doug_in_CT Yeah that happens to me during the business day, just when I need my system to do some work, time to shut things down and often reboot.
Doug_in_CT Yeah Mike, I tried your short URL and it worked fine.
Mike_Summey That’s the first time I’ve had to shut down and reboot in months.
Doug_in_CT It was a good article on the faux pax of flippin’
w1099 Mike and Roger do your guys have another book coming out anytime soon?
sedwards I have justed installed the offer generator today. is there a idiots user guide somewhere?
Roger Dawson Mike, that could be your problem. You ought to restart once in a while to clean up your system
Mike_Summey I talked with a Realtor today about an 8 unit property. We’re going to go look at it Wednesday.
Mike_Summey w1099, yes, we will have Weekend Millionaire Real estate Negotiating later next year.
Mike_Summey Roger, you’re correct about that.
w1099 thats kool
Mike_Summey Hi Greg
Mike_Summey Welcome to the chat
Roger Dawson w1099, we’ve signed a contract with McGraw Hill for “The Weekend Millioniare’s Guid to Real Estate Negotiating” We need to finish it by July 1st, so it will be out in the fall.
GregStoner Hello there Mike, Roger etal.
w1099 Thanks Roger
KenJ.onAI Mike and Roger - That book sounds like a great idea
Roger Dawson Thanks, Ken.
w1099 Now if we could only get your on DVD teaching it would be great to have
Mike_Summey I’m flying to South Georgia in the morning to go quail hunting. Be back tomorrow night. Any hunters in the chat?
w1099 never hurt in my life Mike
KenJ.onAI Did you pack your snake boots? Where in S. GA?
Mike_Summey w1099 the DVDs are shot, just not produced yet.
Mike_Summey Hi cstew
Roger Dawson Mike, you’re the only guy I know who’d fly his $3 million place down to shoot a $5 bird!
cstew hi
Roger Dawson Plane I meant
w1099 short , long its better then nothing LOL
Mike_Summey It’s the fun of flying Roger.
cstew hmmm not sure I want to go flying with u mike
cstew I am in asheville
Roger Dawson ‘Yeah, I remember how much fun we had flying into Tallahasee ahead of that storm!
Mike_Summey I eat the quail we kill. they are very tasty.
cstew so i read your collumn
Mike_Summey cstew, well come on out to the airport in the morning about 10:00 and see us off. I’m taking one of my sons and another fater and son duo.
cstew I have already bought 1 property, besides the one I live in, and have paid off
Mike_Summey cstew, that’s great. Do you have plans to buy more?
Mike_Summey Hi johndeem
Roger Dawson Hi John, welcome
w1099 cstew what do u mean by paid off?
johndeem Hi Al
cstew not sure, not sure if I should continue to pay up on this one, as I am not sure I would pay myself, but have an eye on a couple
cstew my personal home is paid for
Mike_Summey Al Lee is not here tonight. May be because today is his birthday. If he shows up, everyone wish him a Happy Birthday.
w1099 no mortgage? KOOL
cstew just on my personal, mortgage on the rental
w1099 OK Mike
cstew but the rental was a no brainer…. have 2 in college, they both live there, with 1 roommate
w1099 do u get a cash floe from your rental?
KenJ.onAI Mike, I met a local investor/business owner who had two single fam. homes FSBO last week. He had enough after he had to evict a tenant and they left the place a mess. He though his mistake was getting a tenant without a credit and background check. It turned out he couldn’t pay the mortgage the second month. It goes to show, you may be better off using a property manager who you can work with to find tenants for you.
KenJ.onAI thought
Mike_Summey cstew, your personal home could be used to secure a line of credit you could use to buy rental properties with and then after owning them a few months you could finance them to pay off the line of credit. A friend of mine used his house that way to build a $100,000 annual income right here in Asheville.
w1099 That seem to be a good idea Mike
cstew sounds easy, but not sure I am ready for the risk
Mike_Summey Hi Penny
Roger Dawson The LA Times this morning made the point that a lot of buyers in CA having been buying homes they way they lease cars, thinking it doesn’t matter what it costs as long as you can afford the payments. I majority of homeowner loans now are reverse amortizing.
cstew I hate having money owed
Mike_Summey Ken, that’s one of the biggest reasons I recommend using professional management.
Penny Hi Mike and everyone.
w1099 Hello Penny
Mike_Summey cstew, don’t borrow unless the income will make the payments.
cstew I do not have positive cash flow at the moment because I have my 2 sons in the house, only 1 roommate pays
w1099 Ok I understand
Roger Dawson Hi Penny!
Mike_Summey cstew, charge the sons rent. I charge mine rent for the house he lives in on my property.
cstew once mine are out on their own, will be easier not worrying about tuition, mortgage ins, etc
cstew mine are full time student athletes
Mike_Summey cstew, I understand that.
Mike_Summey cstew, where are they in school?
cstew 1 graduates this month
cstew unca and mars hill
Mike_Summey cstew, what sport do they play?
KenJ.onAI Mike, I looked at both of the homes and made some offers using your Offer Generator program. I called him today and presented the offers. Although he was well motivated, he had only been in the properties a couple of years and did not have enough equity to carry most of the mortgage, which is what it would have taken to buy the properties without him coming up with extra cash for the deal. Oh well, I’m looking at another tomorrow.
cstew the house is about 1.5 miles from unca in woodfin, but close to the interstate
cstew baseball
Mike_Summey cstew, mine were football and basketball players.
cstew takes the jr about 15 mins to mars hill
w1099 Hay Corey
cstew so u know the time commitment, the oldest will start to pay rent, but needs to find a job, so may not stay in the area
Mike_Summey Ken, I’d go ahead and make the offers in writing anyway and be sure to put your contact information on them. I’ve had sellers come back to me months later and ask if an earlier offer was still good.
Mike_Summey Hi Corey
Corey Hi Mike and everyone
Mike_Summey Doug, do you have any offers pending now?
sedwards Roger Dawson Any tips on dealing with EXTREMELY stubborn people?
Mike_Summey sedwards, a big stick usually works well.
w1099 Fall back and they may see the light
sedwards Mike_Summey I agree
Roger Dawson sedwards, you’ve got to find there motiviation. What would they do with the money if they sold? If they’re not motivated you’ve got to get them excited about what they could do with the money.
KenJ.onAI That’s a good idea Mike, I’ll follow up with a letter and business card. I told him if finding an owner-occupant doesn’t work out and he needs to sell to give me a call. I left the conversation feeling we both had our say and that we both respected each other. It was a good feeling even though we agreed not to make a deal at this time.
Mike_Summey I will be speaking at a conference in Jacksonville, FL the first week in February. If anyone is interested in attending, send me an email and I’ll forward it to the promoter who is setting up the meeting. Roger spoke there last year.
KenJ.onAI Mike, that’s about an hour from where I live. I’ll email you and check my schedule. I’d like to try and make it.
sedwards Mike_Summey I installed the offer generator today. Getting techno is slow for me, but Im gonna learn
Roger Dawson The conference is called ACES. It’s a great group of people who sell retirement real estate mansions.
Mike_Summey Did anyone encounter problems getting into the chat tonight?
w1099 This is what i mean Mike u need a video crew recording this and make big bucks frome it LOL
Corey no problems logging in for me mike
cstew If son stays here, I would like to help him buy a house instead of renting, so HE may be my niext project
w1099 No problem here
Mike_Summey sedwards, every place where you have to enter data has help. Just place the cursor on the lable and help will pop up telling you what you need to do. It is very simple.
Mike_Summey Hi asimmons
Mike_Summey Hi hottie
sedwards Mike_Summey no problems loggin in.
asimmons hello.
Roger Dawson Hi Hottie
hottie Hey Mike, Roger
cstew phone, be back later
Mike_Summey I’ve received several emails from people who had problems logging in after we upgraded the chat program
hottie i didn’t have a prob. Just site looks really different
Mike_Summey Hi tyrone
sedwards Mike_Summey Roger Dawson should i focus on fsbo or realtors
hottie ok, now i just got kicked off and i had to log back in
Mike_Summey sedwards, there are deals from both. Don’t limit yourself to just one area.
w1099 Everybody game right Mike?
Roger Dawson Sedwards, both approaches work but I think you can better deals from FSBOS. When I sell (something Mike never does) I’d always use Realors because the key is to expose the property to the most potential buyers.
Mike_Summey I’ve bought properties from owners, through Realtors, from banks, at auctions, etc. etc.
sedwards Roger Dawson Mike_Summey thanks - i am trying to get off on the right foot. it seems endless where to look.
Doug_in_CT Mike, I was moved into a little cautionary mode while prices were sliding backward, but I am starting to sense that the timing is getting close to right. I think our little dip in prices here may have begun to ride its course. I think by Spring we will be back in a rising market.
w1099 I see in this business u use whatever is out there to help u , you just have to be smart about what u are about to do
Mike_Summey Doug, when prices are falling is the best time to buy. I’ve found that sales prices and rents don’t necessarily follow each other. Many times when prices are falling, rents are rising.
Doug_in_CT I am with ya.
Mike_Summey w1099, that’s correct.
Roger Dawson Doug, my guess is that the buyer’s market will last for a couple of years. There was a lot of speculating going on.
Mike_Summey Personally, I think we are a long way from seeing a seller’s market again.
asimmons Doug, what will trigger your entry strategy??
w1099 That sound good to me Mike
Mike_Summey I look forward to the next 2-3 years. I think long term investors will really benefit during this period.
Doug_in_CT I am sensing from my realtor contacts, that they are the Maytag repair folks, just hanging around waiting for something to happen.
KenJ.onAI I hope you all are right about the market
KenJ.onAI I’ve found realtors are much more likely to work with investors like me right now
w1099 Kenj.onAI the market is like life its always changing
sedwards Mike_Summey I have been running numbers on 15 different listings in my area. the generator is about 45k different from the asking prices on the listings. do i offer on that wide of range?
KenJ.onAI true 1099
Roger Dawson Hi Zert
Doug_in_CT Hey Zert.
zert good evening everyone,
w1099 hay Zert
Mike_Summey sedwards, you can use the OG to creat offers that adjust the terms to meet the asking price if you want, but the bottom line is that unless you can buy wholesale, you’re better off not buying. I’ve never seen anyone lose their shirt on a property they didn’t buy, but I sure have on ones they did.
Mike_Summey Hi zert
Mike_Summey Did everyone die?
cstew reading back
KenJ.onAI sedwards, most of my offers end up more than 45K off the price. I’m just sticking to what the NOI can afford to pay after all of the “costs”. To me those are really what they call “asking prices”.
hottie no, still here.
Roger Dawson I’m not dead yet!
w1099 Me either
cstew lol, I couldn’t offer that much off
KenJ.onAI One foot to heaven, the other is firmly planted on the ground Mike
Mike_Summey Ken, I once made 50 offers that were all rejected before one was accepted. Then 6 of the next 10 were accepted. It’s a numbers game.
cstew my price range is 90-150
sedwards KenJ.onAI thanks
KenJ.onAI I just made number 20 today Mike, I would think I should get a pretty good deal if I could make it all the way to 50. Man, you must have a lot of patience.
cstew I know I need to look into the offer generator, but looking at a place, has been on the market for over 6 months
w1099 Mike or Roger Real Estate Law is important what should we be learning as investors about some of the RE Laws?
sedwards cstew its 150-180 here for 80k houses
Mike_Summey cstew, don’t put a price range on yourself. A $1,000 NOI will make the payment on a $100,000 mortgage for 15 years at 9% or a $180,000 mortgage for the same 15 years at 0%. What’s the difference if you plan to hold it long term.
KenJ.onAI cstew have you talked to the owners about the place?
cstew not yet
hottie W1099, I took a real estate class that was based on real estate law.
Doug_in_CT asimmons, I find that your investor “mood” moves around a lot, some days you want to buy anything for sale, others your feeling like you want to go defensive. I am convinced that “mood” should not be your driving force, but it is sometimes hard to overcome “the mood.”
Mike_Summey 1099, that’s why I use professional managers. Let them keep up with the laws.
Mike_Summey Hi wps
w1099 how was it hottie?
Corey Mike the other night I was watching Warren Buffet on tv and he keep stressing patience and I kept thinking of you
Roger Dawson w1099, I use to teach real estate licensing school 30 years ago. You need to know things like how to take title to property but don’t get carried away. Your real estate agent, title officer and real estate attorney knows all that stuff.
Mike_Summey Warren has done quite well with patience.
w1099 I know Mike but u must know some Laws not everything?
wps good evening just stopping in to see what is going on 2nite
hottie W1099, it was a good class, but I don’t know if it is just Mississippi, but we are real lenient here. I was trying to find out about rental codes and eviction type stuff. Didn’t learn much about those things
asimmons I agree. What is your method to remain ojective?
cstew phone again, how late do u guys stay on?
Mike_Summey Patience is the one virtue that few investors can bring themselves to demonstrate. They want to buy something so badly that they can’t wait until the right deal comes along.
hottie W1099, still can’t find any law here that says how soon you can evict a tenant. I just put it in their lease that if rent isn’t paid by the 10th, eviction papers will be filed
KenJ.onAI cstew you may want to ask the owner some questions to try and uncover his level of motivation. What does he want to sell the property for? If you could meet his asking price, would he be willing to take back any of the mortgage?
Mike_Summey asimmons, my rule is simple…if I can buy a property with the NOI I buy it. If I can’t I don’t!
w1099 when am at that point i will have a real estate atty to take care of that part of the business
cstew that is the stuff I have to learn, have to go.
hottie W1099, I have discovered that we make about $50-100 per month on tenants that are late. We have 3 properties
hottie W1099, but we have yet to file eviction papers, knock on wood
KenJ.onAI bye cstew, Mike, Roger, Doug and bye everyone, enjoyed the chat tonight
w1099 Thats kool
sedwards Mike_Summey just enter the NOI in the payment box of the og and go with that?
Roger Dawson Bye Ken
w1099 Once me and my wife buy this house next year we will be looking for an investment Property hottie
hottie W1099, when i do the lease papers with the new tenants, i make it VERY clear, that we don’t mess around, on the 11th, they will see eviction notice
hottie W1099, good luck
Mike_Summey hottie, I had collection problems with one of my property managers. Finally I told her that if a tenant had not paid by the 5th she should send a 10 notice. If not paid by the 16th, file an eviction. I told her that I hired her to manage my properties, not loan my money. I also told her that I expected her to pay the tenant’s rent if she did not follow that process. As a result, past dues went from over $17,000 to less than $1,500 in 60 days.
Mike_Summey Hi Mike2
w1099 Thanks you have the same idea i have let them know right away hottie
Mike_Summey When tenants learn that they can’t shift their problems to their landlord, they will ride someone else.
hottie Mike, VERY impressive. I have used one of your rules of thumb, I don’t tell tenants that I am the owner, I blame everything on “the company”. The rules are straight forward, rent is late on the 5th, eviction notice on the 11th. Period
w1099 So Mike you are invole in some kind of way to making sure things goes right with your properties?
Mike_Summey w1099, I manage the managers, not the properties.
Mike_Summey Hi oz
w1099 Thats why you’re the man
Mike_Summey Hi shane
Roger Dawson Tenants should realize that paying their rent comes first, even ahead of buying food. Someone will always feed them but nobodies going to give them a free place to live.
shane_Ky Hi Mike
oz Hi Mike
w1099 goid point roger
zert Mike what do you normally charge as late fees and after how long?
w1099 well time has gotten the best of us everyone it was great as always until next week good night everyone.
Mike_Summey I’ve learned that when tenants don’t pay, its usually because they have problems. It may be anything from loss of a job, an illness, etc., but when they don’t pay their rent because of their problems, all they are doing is shifting their problems to their landlord. Do them a favor and hold their feet to the fire. If they ever learn that you will take on their problems, they’ll overload you with them.
Mike_Summey Goodnight 1099
Mike_Summey zert, I don’t know. That’s the property managers job.
mike2 Hi Mike, I made two offers over the weekend and one counter today. I made one of those mistakes you told me not to–I offered essentially my top dollar, then I didn’t have any room to negotiatre up . . .
Mike_Summey Each manager has different policies.
zert anyone have any guidelines?
Mike_Summey mike2, that’s why we tell you to make lots of offers before you buy. You’ll learn a lot more mistakes that you won’t make again by doing that.
Doug_in_CT Zert there are usually some State defined rules about how much you can charge as late fees.
hottie zert, we charge $50 late fee. Rent is late on the 5th. Then, if it’s not paid, 11th we start eviction papers
sedwards Roger Dawson how do i find out about the seller if i tiur the property with a realtor - the seller is not usually there
Doug_in_CT But I think I like Mike’s answer, as investors, we should not even know about these matters.
cstew that is my free with jumping in, late non paying renters or not getting renters for months
hottie Zert, I can’t find anything that states how much and time frame in Mississippi. I just found that here, as long as it’s in writing. But that’s just here.
cstew my fear… not free
Mike_Summey Everyone, here’s something to think about. How about if you set the rent at a rate where it is say $25 - $50 more than what you expect to get and then offer a $25-$50 discount if they pay by the 25th of the month. Then charge a late fee on the full rent if they don’t apy by the 5th.
cstew not sure I would do that
Roger Dawson Sedwards, that’s one of the reasons why you can better deals from FSBOS. People who list don’t expect ot have to deal with buyers. Don’t be afraid to ask the listing agent challenging quesitons, such as When does the listing expire? How many offers have you had? Why did you turn them down?
zert Doug - me too, I am trying to understand if I am managing my manager correctly
mike2 Mike, I sure am learning, I’m liking this stuff though–and I like that last rent charge w/ a discount if paid early!
Mike_Summey By giving a discount for early pay you can get higher rents because the tenants will feel they are never going to be late.
sedwards Roger Dawson sounds good - i will give those a try - thanks
Roger Dawson I need to run. See you next week. Happy Holidays!
Doug_in_CT That is something that I have done, I have described rent as say $950, but when we come to sign the lease, it says $1,000. But then I explain, that I have them covered, viz. there is a $50 discount for payment before the first. I have found this works with 90% of the tennants.
hottie Mike, do people actually get the discount? I tried that once with our second renter, he was always late.
cstew actually that makes since to me
sedwards Thanks evryone - good night
cstew I feel I want a “target” college students
Mike_Summey Hottie, if the full rent is more than you expect to get and the tenant still wants to pay late, you not only get the higher rent, but get to add a late fee to it.
Mike_Summey goodnight sedwards
hottie Got ya. Talk to you next week.. Nite everyone!
Mike_Summey Goodnight all! I’m going to have to sign off too.
mike2 Mike, I had toyed with the idea of a break in December if not late for 6 months, but this $50 “discount” sounds like a winner!
Mike_Summey Got to get ready to go hunting tomorrow.
cstew does anyone worry about having renters?
Mike_Summey mike2, it works…believe me.
zert I worry about NOT having any!!!
oz g/night all
cstew not having renters I mean
zert Mike - I think that I will try your idea - thanks
mike2 Mike, I arrived late. Are you heading out of town to hunt?
Doug_in_CT Good luck with those birds Mike, and watch out for George Bush’s hunting buddies.
Mike_Summey cstew, renters come and renters go. That’s why you should factor in a vacancy factor when you compute the NOI you will use to make your offers. All of that is in the Offer Generator.
cstew I do like that idea as well, but so far with college students, they are getting the money from mom and dad
Mike_Summey mike2, I’m going to South Georgis tomorrow to quail hunt…taking my son Jason.
Mike_Summey Goodnight all.
Doug_in_CT Good night Mike
cstew nite all
zert Good night Mike - thanks
zert anyone still here?
johndeem nite all
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