Chat Transcript December 18, 2006
Posted on December 19, 2006
Avri hello guys
ken avri were are you from
Avri ken, MA
Avri i’m new
ken me to kinda I have 3 duplexes
Avri just picked up the book a few weeks ago and i’m finding it very educational
ken these chats help some its hard to keep up
ken Avri you try there real estate program with the offer generator it makes life alot easier
Roger Dawson Hi everyone!
Avri Not yet, I’ve not even printed out business cards yet, i’m still reading the book
ken hi
Avri ello Roger
Avri I’m trying to understand all the concepts first, get through the book and all - and then take action
ken Avri, get them cards I have cheap ones. I also got a website from godaddy with a good email pretty cheap i think $22 for 2 years
Avri ken, after business cards, what are the next few steps? get a propery manager and real estate lawyer?
Avri hello Mike
Mike_Summey Hello everyone!
Roger Dawson Welcome Mike
ken Its really all a working business.
Mike_Summey Hi Avri, I see you’re already getting some more feedback on the business card issue.
Avri yeah i’m trying to piece things togehter here
ken Avri I guess setting goals will be your next step
Avri Mike, the business card privacy issue i told you through email today is not a big deal, just a small concern i had
Mike_Summey Avri, the best way to eliminate your concern about tenants calling you is to use a property manager. That’s the middel person you were asking aout.
Avri yeah, i definitely intend to use a PM
Avri so starting out, what contacts should I make other than a PM?
Mike_Summey Avri, most of my tenants don’t even know who I am.
Avri real estate attorny? real estate broker?
Mike_Summey Avri, both plus a good appraiser or two and several banking connections.
ken Avri i am finding out the PM is a big source of information. Just ask them questions most will answer great
Avri I thought the PM will be the one going with me to appraise, is that not so?
Avri the PM will tell me how much i can rent for, isn’t that what’s important?
Mike_Summey Roger, your weather doesn’t have a thing on WNC weather the last few days. I played golf yesterday…70 degrees & not a cloud in the sky.
Avri hello Mark
MarkNC Hi everyone.
Mike_Summey Avri, the property manager is the one that will handle all dealing with tenants. Leases, collections, repairs, etc. All of the things you don’t want to do.
Mike_Summey Hi Mark & Oz
Roger Dawson It’s been a perfect day in LA too. Bright sunshine, clean air, fluffy clouds and snow on the mountains around us.
oz Hello mile
Mike_Summey Roger, we don’t even have puffy clouds or snow on the mountains. Just bluebird days and warm weather.
Avri Mike, okay, so when i go on my first viewing of a property, should i take both a PM and an appraiser?
ken Mike thanks for the article about the couple that purchased properties in FL
oz yea, and cold too Roger
Mike_Summey Avri, no you don’t need to take either. Download the inspection form on the website and use it. Wait until you find a property you think you may want to make an offer on before getting a PM to look at it and then only if you feel you need help determining what the property will rent for.
Mike_Summey Ken, that couple’s experience is happening all over the country and is only going to get worse for the next couple of years.
Avri ok, and when does the appraiser come into the equation?
Mike_Summey Avri, you won’t need an appraiser until a contract is accepted and you are applying for financing. At that point, the lender usually hires the appraiser, but you have to pay for it.
Mike_Summey Hi 1099
MarkNC Yeah, that article was pretty scary, makes me more sure that the slow and steady approach is better, even though I have run into unexpected foundation problems lately that have cast about $5000 I still can make things cashflow.
w1099 I can’t stay on tonight so I would like to wish everyone a happy Holiday and a Happy New Year
MarkNC cost, not cast
Avri Mike, gotcha
ken Roger do you think the real estate market will pick up this spring?
Mike_Summey Mark, everyone should read that article and study the mistakes that were made. We recommend the slow and steady approach because it works and has little risk. You won’t get rich quick, but you will get rich if you stick with it.
Avri I reviewed a few previous chat logs earlier tonight and read that NJ has bad eviction laws (from landlords’ perspective) and now I’m wondering how good/bad real estate laws are in my state (MA). Anyone know of problems I may encounter with this weekend-millionaire technique?
MarkNC That’s what I’m counting on, although right now my contractor seems to be getting richer quicker 
Roger Dawson Ken, different areas seem to reacting differently. Areas that have gone through too rapid appreciation will see a slow down and a buyer’s market.
w1099 Thanks Mike and Roger for all your help and in sight looking froward to 2007 to making my move in real estate investing, take care everyone
Mike_Summey Avri, we usually have some people in the chats from MA, but not yet tonight. I don’t know about the laws there, but that’s a good question to ask potential property managers when you interview them.
Mike_Summey 1099, I predict 2007 will be good for investors as will 2008. The worse the market gets for sellers the better for us.
Avri ok
ken Mike i’m counting on that.
ken Mike I get emails all the time from different investment groups offering totally rehabbed properties at 80% Loan to value. I wonder how many people just up and buy them.
Mike_Summey Hi Penny
Roger Dawson Hi Penny
w1099 Mike before I go why do u feel that way?
Penny Hi Mike and Roger and everyone.
Mike_Summey Ken, 80% loan to whose value? Theirs or the value you come up with when you run the deal through the Offer Generator?
w1099 Hi Penny
Avri anyone have a recommendation of an especially good website that will enrich my real estate vocabulary/knowledge, currently i don’t really know all the lingo that I read Mike use in the book and I feel I would choke a little during offers
Mike_Summey 1099, the wors the market is for sellers, the more flexible thay become.
Mike_Summey I can’t seem to type tonight…sorry!
ken Mike Their values. The deals don’t even come close to the offer generators. I don’t buy them
w1099 That ok Mike i know what you mean
Mike_Summey Avri, which of our books are you reading? In the real estate book there is a full glossary of terms in the back.
ken www.biggerpockets.com
oz Mike, I have a continual problem with the lack of typing abilty
w1099 Avri try going to CRE.com
Mike_Summey Oz, my fingers don’t want to work tonight!
Avri Mike, hmm.. I didn’t notice that until now =)
Mike_Summey Avri, I see you haven’t read the entere book yet!
ken every time i read that book i pick up somthing every time or remember something I forgot
Avri Mike, yeah, as I said, I’m really new, I didn’t even think about investing until 2 weeks ago when I picked up your book
Avri i’m about 2/3 of the way through now
Alex_Chicago Hello everyone.
Roger Dawson Hi Alex.
Alex_Chicago Hey Roger.
Alex_Chicago I have a quick question
Mike_Summey Avri, we have two other books also. The FAQ book is a companion to the real estate book and it is a collection of questions and answers that are laid out in the same chapter headings as the RE book. The other book is Weekend Millionaire Mindset, which is about wealth building in general.
Mike_Summey Hi Alex
Alex_Chicago Hey Mike.
Alex_Chicago I have a friend who is trying to sell a house
Alex_Chicago But, its been in the market for a while
Mike_Summey Avri, by the time you finish, I believe most of your questions will be answered.
Alex_Chicago Does he have any other options?
Alex_Chicago Besides selling?
Avri Mike, yeah i think so too, your book is laid out very clearly
Alex_Chicago He’s dropped the price, and its not an ideal renting house.
Mike_Summey Alex, he has plenty of options. He can give it away, burn it down, rent it, etc.
Alex_Chicago LOL.
Mike_Summey Selling would probably be the best option if he needs some money.
Avri oh also.. i read something in the chat transcripts about a certain period of time you have to wait after buying a house before being able to legally rent it? is that correct or did I misunderstand?
Alex_Chicago Well, he bought a different house, he not afford 2 mortgages
Roger Dawson Mike, I’ve just been reading the story you sent out about the Tampa couple. Hard to you believe anyone would buy $1.5 million of property sight unseen!
Mike_Summey Alex, in this market he may have to get realistic and flexible if he wants to sell. The run-a-way price increases are a thing of the past for the forseeable future.
ken Roger, I wonder how they even got loans for those properties
Mike_Summey Avri, there is no wuch period. I think what you read is about the holding period before you can refinance.
Alex_Chicago Ah, ok thx.
Avri ah, ok good, that had me worried
Roger Dawson Avri: that only applies if you got an owner occupied loan. With an investor loan you can rent right away.
Avri what’s an owner occupied loan?
Roger Dawson Where you tell the lender that you’re going to live in the property.
Mike_Summey Avri, Roger is talking about the wait time if you apply for a loan and tell the bank you are going to live in the house yourself. That’s different.
Avri ok, so if i’m not going to live in the house at all none of this applies
ken how does the stock market affect interest rates? I know my money market acounts keep going up
Mike_Summey Alex, I’ve bought properties in the past from people who have gotten in the same prediciment as your friend and the seller has had to bring money to the closing to get out of the property. Not a plesant thought, but it happens.
Mike_Summey Avri, that’s correct.
Alex_Chicago So, you think he should keep dropping his price?
Alex_Chicago He bought it for 800k its down to 600k now.
ken 
Mike_Summey Alex, that is in effect what he is doing each month he makes a mortgage payment that he is not going to recover.
Mike_Summey Alex, how much equity does he have in the property?
Alex_Chicago Im not sure, sorry.
Alex_Chicago If had equity what would he be able to do with it?
Alex_Chicago he*
ken it seems properties in myarea are down 10% if not more
Alex_Chicago Yah, there dropping in my area too.
Avri Mike, I live in a fairly high-priced market (a small 2-4 bedroom house in my area can be aroudn $400k at the minimum) is that a bad/good/irrelevant for me?
Mike_Summey Alex, if he bought it for $800K and has already dropped it to 600K, he may have been able to get 800K if he was willing to finance the 200K at very low or 0% interest. Make a buyer think he is getting a steal.
Mike_Summey Hi shane
shane_Ky Hi Mike
Roger Dawson Hi shane
shane_Ky Hi Roger
ken shane were in KY do you live
Mike_Summey Avri, it’s irrelevant. If market rents will support the purchase fine, if not don’t buy.
shane_Ky Garrett
Avri Mike, ok i guess that’s one of the first things i have to find out.. if these houses rent well
Avri anyone here from the MA area?
Mike_Summey Avri, you’ll learn how to do that by the time you finish the book.
Mike_Summey I think we have a small crowd tonight because of the upcoming holidays. Everyone is probably out shopping.
shane_Ky I have read somewhere that an author tries to make at least a 100 per unit. I find that hqard to do unless you pay a good sum down. any thoughts
Avri how many do you usually get?
ken unless you find the deals before everyone else
Alex_Chicago Which season generally is the best to purchase a house?
Mike_Summey shane, the speakers I’ve heard talk about getting $100 per unit cash flow are usually considering the return on their down payment as cash flow.
ken I’m finding out that breaking even is hard
Mike_Summey Alex, North of the mson-Dixon line winter is uaually best, Sout of it summer is often best.
shane_Ky When you say return of down pay ment what do you mean
shane_Ky Do the count principle pay back
Alex_Chicago Mike, what do you read or watch to keep youself in the market?
Alex_Chicago …Well, up to date.
shane_Ky Avri, was that question for me
Mike_Summey Shane, if I pay $20,000 down on a purchase and want a 12% return on my cash I would have to get $200 over and above the mortgage payment and expenses in order to do wo.
Avri no it was for Mike, but it’s not important.
Mike_Summey Alex, I get tons of information from the Internet. I find that to be the best source of up to date info.
shane_Ky Is that $200 for the year or month
Alex_Chicago Which sites?
Mike_Summey shane, it is $200/mo. $20,000 X 12% = $2,400 or $200/mo.
shane_Ky I see now
Mike_Summey Alex, you can Google any topic you want to know more about and get tons of articles on the subject.
Mike_Summey Shane, if you’re happy with only a 6% return then $100/mo will give you that.
shane_Ky I am not paying much down so my returns have been pretty good
Mike_Summey Everyone, don’t forget to check out our online store. Everything is at least 10% off through December with the full package that includes everything at more than 30% off. Merry Christmas!
Mike_Summey Hi KenJ
KenJ.onAI Hey Mike and Everyone
KenJ.onAI Sorry I’m late. The power has been out here at my home.
Roger Dawson Welcome Ken
Mike_Summey KenJ, where are you? Not in the Northwest I hope!
KenJ.onAI Quite the opposite Mike, down in the southeast. I hear the Northwest has got the worst weather right now.
Mike_Summey Hi zert
Roger Dawson Hi Zert
KenJ.onAI Mike,
zert hello everyone
Mike_Summey I hope the weather hold through tomorrow. I’m flying a cancer patient to Duke University Hospital in the morning.
zert best wishes Mike
zert Roger - I have a question for you. How do you know when to back off a point for the greater good?
KenJ.onAI Mike, I looked at a FSBO last week. The owner was recently widowed and looking to get into an apartment. Her son-in-law was helping her sell the place. I made a three offers using the offer gen. software. He ended up getting an offer from a potencial owner-occupant. I left him with the offers and my card in case their financing fell through.
KenJ.onAI Mike, maybe a strange question. . . . What do you wear when riding neighborhoods? Sometimes I feel a bit out of place in my business casual clothes as I’ve usually just left the office when riding.
Roger Dawson Zert, as part of win-win negotiating I teach students not to take the last dollar off the table. It can cause expensive hard feelings. Also, having made the deal do a little bit more for the other side than they bargained for.
Mike_Summey KenJ, one thing to remember…an investor can never compete pricewise with someone who is going to live in the property when conventional financing is used. What an investor can do is offer options a homeowner may not be able to offer, but that usually takes experience to do.
Mike_Summey KenJ, ask Roger what I wear! 
Mike_Summey Hi cstew
KenJ.onAI Roger, what does Mike wear?
cstew hi
zert I backed off a situation regarding a refridgerator because the deal was good, but I still am upset and feel that I was taken
Mike_Summey zert, a refridgerator is never woth losing a deal over. You can get a used one for $50 - $100.
Roger Dawson He wears his shit-kiccking clothes when he’s serious about getting a deal, not his monogrammed shirts from the Asheville Country Club.
Mike_Summey Roger that’s not very nice.
zert Mike - I agree but I am still mad!
cstew I was at sams today, picked up the book, chapter 21 so far, will be better prepared after the 1st of the year
Alex_Chicago LOL.
Mike_Summey cstew, did you get all three books?
cstew no
KenJ.onAI I knew I had my Mossy Oak hat and steel-toe’s in the trunk for a reason
cstew just secrets
cstew it is a start
Mike_Summey KenJ, I usually wear casual clothes all the time. I only wear a coat and tie when forced to do so. I did that for 30 years and I neither care to nor have to now.
KenJ.onAI cstew, try their FAQ after you read that one. It will help crystalize and clarify.
Mike_Summey Roger is a stuffy onld Englishman who plays gold in a coat & tie.
Mike_Summey golf
cstew I can’t wait to get further along, actually happy I did some things right without reading it, but will know more and hopefully learn to be a better negotiator
cstew I did once buy a 66 mustang for 10 bucks
Mike_Summey cstew, our next book will be Weekend Millionaire Secrets to Real Estate Negotiating.
zert Does he wear the funny pants tucked into his socks?
cstew drove it for 9 years, daily, sold it for 1000
KenJ.onAI Okay, I understand. I definately am targeting blue-collar and wanted to get in with the locals to find the best deals.
Avri cstew did you buy it from your father lol
cstew where I bought is blue colar
Alex_Chicago lol, I was about to say that
cstew no I did not!! lol… actually told him, and he wouldn’t let me bring it home!
KenJ.onAI Roger, who wins at golf, you in your suit or Mike?
cstew needed a tune up and 1 front disc break caliper, then I drove it, daily actually from CT to NC, through College, and untill my 2nd son was born
Penny Goodnight all. Dinner time.
Mike_Summey KenJ, I don’t think what you wear is nearly as important as your ability to deliver on your offers. I’ve never seen money from someone in a pair of blue jeans spend any tifferent than money from someone in a tuxedo.
KenJ.onAI Good point Mike
Mike_Summey Goodnight Penny
cstew the guy next door to my rental brings my college student tenants moonshine!!
zert gotta go everyone - Merry Christmas and Happy New Year
cstew yep blue collar
Mike_Summey Ditto, Zert! See you next year.
Roger Dawson My son’s hear and eager to go to dinner so I need to run. Merry Christmas, Happy New Year and I’ll be with you on January 8th.
Alex_Chicago Night Roger.
Mike_Summey Everyone, this will be our last chat until January 8, 2007.
cstew k see everyone next year!!
Avri Mike, is it possible to get a Linux Demo of the Offer Generator?
Alex_Chicago Okay…Merry Christmas all.
Mike_Summey Avri, the OG work on Linux also.
Avri yeah I’m just wondering if I can get a demo of it before I buy
Mike_Summey Goodnight everyone! Merry Christmas and Happy New Year. See you on January 8th.
oz Happy holidays all, stay safe and enjoy
KenJ.onAI night all
ken night everyone see you next year
Mike_Summey Avri, we no longer offer the demo version. We offerred it as a download for a few months to be sure we had the bugs worked out.
Avri well okay.
Mike_Summey Now it is only available on CD
Avri thanks for all the helpm Mike, it was extremely informational
Mike_Summey AVri, I think you will be very happy with it. It is very easy to use.
Mike_Summey Goodnight
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