Chat Transcript February 5, 2007
Posted on February 8, 2007
Zoe Doxa Hello Everyone
Dean Hi Zoe and all
chad Hi Zoe
Zoe Doxa Hello Chad
chad Mike and Roger must be late
chad So how’s real estate going?
Zoe Doxa Yes, They emailed me this morning to inform us that they were going to be here from thier trip
chad Ohhhh …..
Zoe Doxa Haven’t baught any properties yet but am doing negotiations
chad Are planning to buy and hold?
chad Are you …
Zoe Doxa Absolutely, 15K monthly income from 20 unit Multi-Family Commercial Building
chad That’s going to be your first property?
Zoe Doxa Yes, and I am looking very carefully at all areas of this transaction
chad Don’t you want to start with something smaller first?
Zoe Doxa Yes, I also have been negotiating with Tri-Plexes, and 4-Plexes with owner financing
chad Weekend Millionaire recommends starting out with SFHs
chad Which maes sense
chad makes sense
chad Of course I wish you luck if you buy a 3-plex or 4-ples
chad How did you find your leads?
Zoe Doxa Yes, nothing has been concrete yet for the 20-plex.
elizabeth Zoe sounds great! What area of the country are you in?
Zoe Doxa Most of my leads came from foreclosure.com, and driving around
chad I’m not familiar with foreclosure.com
chad Is it any good?
chad Has anyone here done any flipping?
Zoe Doxa I am from the state of Alaska where the average market is SFH’s in the 150K’s to 5M
ken Chad I tried flipping I lost $8,000
elizabeth We’ve got one on the market that we bought from a wholesaler and rehabbed.
elizabeth Hasn’t sold yet.
chad Ken: ouch!
ken now is the time to buy and hold
ken lol yeah
elizabeth Why do you say that Ken.
Zoe Doxa Chad the site has a 7 day free trial with option to subscribe
Pscherer ken why did you lose 8,000, what did you learn
elizabeth ?
ken I guess it depends on the area your in
chad Thanks, Zoe, I’ll check it out
elizabeth Zoe are they houses that have already been foreclosed on?
ken Pscherer I didn’t do my homework 100% retaining wall and other structure damage that the inspector didn’t pick up
Zoe Doxa Chad there’s also Real Prospex.com
Pscherer Ouch, yeah homework is extremely important.
chad Hi Mike
Mike_Summey Hi everyone.
Mike_Summey Sorry I’m late.
elizabeth Hi Mike. You come highly recommended by our local REIA president.
Zoe Doxa Yes Elizabeth, but they also have (Pre-Foreclose, Tax Liens, & Bankruptcy)
Mike_Summey I have an older laptop with me and it wouldn’t let me in the chat until I downloaded the latest version of JAVA.
elizabeth Ohhhhhhhh….
Mike_Summey Who would that be Elizabeth
Mike_Summey Hi hottie
elizabeth Larry williams in Raleigh NC
Mike_Summey I see we have several new people tonight.
Zoe Doxa Hello Mike it’s David from Alaska code name Zoe Doxa
hottie Hey Mike and everybody
laurimcclain Hi Mike: This is Lauri from Wyoming
chad Hi, Hottie
Mike_Summey I’ve spoken a couple of time to the group in raleigh. A good group.
Mike_Summey Hi David
Mike_Summey Hi to you too Lauri
elizabeth Yes it is. Come again sometime–I’d love to hear you!
chad I >ve decided to try some other strategies to supplement my income while I m building a portfolio of rental properties the Weekend Millionaire way.
Mike_Summey I’m in Jacksonville, FL speaking at a conference of the best real estate sales people in America.
Mike_Summey Hi Corey
Corey Hi Mike
laurimcclain Mike: What words of wisdom do you have about investing during an oil and gas boom?
Mike_Summey Chad, where are you from?
chad B-More
chad Baltimore
chad I lve been listening to Roger s Power Negotiating CDs. Great stuff, and it will come in handy if I try techniques such as wholesaling properties.
Mike_Summey lauri, if you buy right, the ups and downs of the slaes market have very little effect on rentals.
elizabeth Mike do you manage your own properties?
Mike_Summey chad, you make money when you sell, but you build wealth when you buy and hold.
laurimcclain Have you seen what happens when all the oil companies leave and the vacancy rates are high?
Mike_Summey elizabeth, no I’ve never managed the properties myself. From the beginning I wanted to be an investor, not have a second job.
Zoe Doxa Mike, what is your take on assumable deals?
Pscherer Lauri where are you located re oil and gas
chad I know, Mike, but I jsut moved back to the States, and I don’t have a job.
Pscherer question
Mike_Summey lauri, I can see that that could be a problem. Have you thought of looking at other less volatile areas?
chad I have some money saved because I had my own business in Japan
Mike_Summey Zoe, in the numbers work there’s nothing wrong with them.
Mike_Summey if the numbers work
laurimcclain I’m in Pinedale Wy and have property that I’m thinking of putting a duplex and a 4-plex on,,,but am a bit nervous about the long-term impact of this decision.
elizabeth Mike do you own mostly SF or multi-units?
Mike_Summey lauri, have you done much research on the markt there?
Pscherer I don’t manage my own properties either I would rather pay the 8% of collected rents
elizabeth Pscherer how many properties/units do you own?
Pscherer 8 properties
Mike_Summey elizabeth, I started with all single families, but I gradually migrated into multi-family, commercial and other types of income properties. I still buy sfh’s though.
chad That’s a great idea, Pscherer. My plan is to acquire a few more rentals befor I start using a property manager.
chad Is there anyone you recommend for flipping or foreclosure courses? I lm thinking about either Joe Kaiser or Steve Cook.
elizabeth What kind of cash flow do you recommend on a SFR?
Pscherer It’s much too much hassle to manage yourself for the small dollars you pay.
Mike_Summey Chad are you figuring the deals so that you can pay a manager and they still cash flow?
Mike_Summey elizabeth, all you can get, but any deal that at least breaks even in the beginning will ultimately make you money.
Corey Mike why do you buy sfh instead of focusing on larger and larger properties. I of course know of the large project you are working on. I would think you wouldn’t even mess with sfh anymore
Zoe Doxa Mike due to my current financial situations I have decided to go with Multi-Family properties and manage them myself to cut cost down due to rent rolls in the area. Do you recommend this?
laurimcclain They say 30 years but if history repeats itself, the boom is over before anyone knows its coming. and I’ve seen seasoned investors loose big when thisw happens. However, this time seems a bit different…developers from elsewhere are entering the market and putting lots of new developments in
chad Mike, I add in $100 to $200 a month cashflow, plus something for the property magt — not always 10%, though.
Mike_Summey Corey, because sfh’s still make money.
Mike_Summey Corey, it’s easy to get greedy and put too many eggs in one basket. Doing that can put everything you have at risk.
chad Hi Roger
Mike_Summey Zoe, NO I don’t. You are either and investor or a property manager. It’s hard to be both.
Zoe Doxa Greetings Roger
Zoe Doxa Thanks Mike
Mike_Summey Hi Roger, did you have trouble getting on tonight?
Roger Dawson Hi everyone. Sorry to be late. I’m in Costa Rica on vacation and got confused on the time zones.
chad Zoe, I think your time can be put to better use than dealing with tenant complaints
elizabeth Mike how do you do the majority of your financing? Traditional, interest only, seller finanacing . . . . ?
Corey Mike there is a group in Houston that teaches to buy apartment buildings and increase value 20% sell move to larger property and keep doing this. Whats your opinion?
Pscherer Zoe I pay 8% of collected rents that’s extemely cheap to do what the manager has to put up with from some tenants, plus they have experience you do not and generally make wiser decisions regarding tenants
Mike_Summey chad, I put the management cost in the NOI calculation and then work the deals with what is left.
chad Is Costa Rica 30 minutes behind EST?
elizabeth Hi Hack!
Mike_Summey lauri, I’m not familiar with your market so I’m not a good one to ask.
chad Thanks, Mike.
ken COrey we had a guest on the chat a few months back the guys name was mat that is how he started, bought an apartment complex then sold and bought bigger
Roger Dawson Chad, no Costa Rica is on central time. I got confused after drinking margeritas on the beach.
Mike_Summey Roger, I had trouble getting in the chat because this laptop I brought with me did not have the latest JAVA downloaded to it.
Zoe Doxa Yes Chad I agree. I just wondered if I could exhaust all my talents to bring the leases to be more appealing if I did that. “Rookie in the House”
chad Roger, you shouldn’t drink and chat
Roger Dawson Chad, are your forcing me to choose?
Pscherer chad thats chat not drive
chad No, please stay and chat
Mike_Summey elizabeth, I use praqctically every type of financing you can imagine.
Zoe Doxa Hey Roger I guess that’s one of the perks when you are in your position!
Mike_Summey Hi Jack & Intro
INTROMASTER Hi!
chad Is there anyone you recommend for flipping or foreclosure courses? I m thinking about either Joe Kaiser or Steve Cook.
Mike_Summey Hack, not Jack…sorry
Roger Dawson Pscherer, we have a good friend in Zurich Switzerland whose name is Theor Scherrer.
Mike_Summey chad, I know nothing about flipping. I’ve never sold a property. Someone else may have an answer.
Pscherer Lots of Scherer’s in Germany and Switzerland
chad Anyone???
Hack Sells Hi Mike – my first time here.
chad Bueler???
elizabeth Hey Hack.
Hack Sells Hi Elizabeth
Zoe Doxa Mike is the “Offer Generator” anything similar to Carleton’s Business Tool Kit?
Mike_Summey Hack, we’re glad to have you.
Roger Dawson Chad, we’re buy and hold investors but foreclosures may be big soon. I don’t anyone who has a current course.
Hack Sells Thank you
elizabeth Mike, what do you recommend if one is in need of cash? Due to injury, my husband is out of work on WC; not sure if we could get anymore loans.
chad Thanks, Roger.
Mike_Summey Zoe, NO! The OG is nothing like Carleton’s Toolkit. If you check it out in the shopping cart, there is a tour you can take that shows you what it does.
chad I want to build a portfolio of rental properties the Weekend Millionaire way …
chad But in the meantime I have to try some other strategies to supplement my income
Zoe Doxa Thank you Mike, I am building my knowledge library like a fortress
chad Roger, I ve been listening to your Negotiating CDs. Great stuff, and it will come in handy if I try techniques such as wholesaling properties.
Mike_Summey elizabeth, earning money and building wealth are two different things. You can earn money flipping, rehabbing and some of the other quick turn techniques, but that is speculating not investing.
Roger Dawson Chad, thanks for the endorsement. Help me spread the word.
Roger Dawson There
Roger Dawson There’
chad Hey I sent a testimonial to you (which you posted)
Mike_Summey chad, I worked a job in advertising for 30 years whild building my real estate protfolio. I lived off the income from my job and kept pouring the income from my properties back into more.
INTROMASTER Mike, what is the most important tip/piece of advice you have for hiring a good residential property management company?
Roger Dawson There’s a lot of people out there telling you that you can buy without any cash and make a fortune but we’re skeptical.
chad I know, Mike, but I can’t stand regular jobs.
Mike_Summey Intor, have you read that chapter in our real estaqte book?
Zoe Doxa Mike, I have a deal right here in my neighbourhood that is on a NOD with the Muni and am wondering if doing a Tax Lien purchase with this deal wise
INTROMASTER I have your first book…
elizabeth Mike do you pull the equity out of your acquisitions in order to purchase more properties?
Pscherer Roger, the only one of my properties not cashflowing is ano money down and while it has appreciated greatly it bleeds a couple of hundred monthly
Mike_Summey chad, I understand. I was just telling you what I did. Everyone has to do what makes them comfortable.
ken Intro interview them, I had to fire my first one. a realtor recommended them so I just hired them
Mike_Summey Intro, there is a whold chapter in that book on hiring a property manager. I don’t know that I can give you much more info that what’s there.
chad I know, Mike, and I love the Weekend Millionaire method. That’s ultimately the way I want to go
INTROMASTER Thanks Ken! any specific questions I should ask. That is my problem, I dont knowhat questions to ask.
INTROMASTER OK, I will re-read the chapter!
ken Intro send me an email I will send you a list I made up ken@kenhicksjr.com it’s basically what mike and roger have in there book
chad Ask them if they are going to steal from you
INTROMASTER Thanks Ken! Appreciate your help!!!
Mike_Summey elizabeth, yes, I will quite often pull equity out to make new purchases. I usually do that by asking the bank to bring a loan back up to it’s original amount after it has paid down a bit.
Pscherer How much do you charge to rerent?, who does repairs, is your fee based on collected rents are rent in general, who pays advertising etc
Mike_Summey Pscherer, is the cash flow shortage more than the principal portion of the mortgage payment?
Pscherer No Mike,
elizabeth Mike, are any of your loans interest only?
Mike_Summey elizabeth, the only interest only loans I have are lines of credit I use to make purchases that I ultimately put on amortizing loans.
Corey Mike when you ask the bank to take the loan back up to the original amount are you refinancing or using heloc
Pscherer I can easily refi and bring my monthly expenses to a breakeven point, but the costs would be more than the savings right now
chad I was going to ask the same thing, Corey
chad Good question
Mike_Summey everyone, Ken gave us a very nice testimonial. It is posted under the testimonails button. It’s a great read. Thanks Ken!
Mike_Summey Hi Sol
Roger Dawson Heloc means home owners line of credit. A line of credit against your home equity that you only use when you need it.
Sol (Cali) Hi
ken pscherer I was faced with the same deal on refi one of my properties. I just hounded the bank then they refi for me for fee 
but if I sell within 4 years it will cost me
ken a problem mike
ken Its kinda a heloc but its fix
ken not a problem
Mike_Summey Corey, if you set the loan up correctly in the beginning, you can draw the principal back up to the original amount with a simple loan modification and avoid expensive refinancing costs.
Pscherer Mike, so you set it up from the beginning?
elizabeth Mike, what would you call that?
elizabeth Do all banks do that?
chad loan modification?? How would we know if it”s set up right?
Zoe Doxa Roger can a heloc be used for a fixer upper to your basement?
Corey can you give the details on that mike or is it to much for here
Pscherer Zoe heloc’s can be used for anything
chad I want to know, too. That sound sperfect for the situation I’m in!
Mike_Summey Pscherer, yes, be sure the mortgage or deed of trust is set up to allow future advances.
Zoe Doxa Thanks Pscherer
Pscherer I had one before but haven’t seen one for awhile.
Roger Dawson Zoe, you can use it for any purpose but the government has a great program for fix ups. Ask your loan broker about it.
Pscherer Zoe the local gov usually has better rates too–sometimes one percent
Zoe Doxa Thank you Roger
Mike_Summey If you set the loans up to allow future advances, you will probably have to put them on floating rates rather than fixed, but if you ask for floating rates with fixed payments this typ loan can give you a lot of inexpensive options.
Zoe Doxa Thank you Pscherer
Pscherer Zoe, you can usually call the housing authority to find those loans.
chad Mike, so if the loan is fixed-rate it probably doesn’t allow for future advances?
elizabeth Mike, is this like a revolving account, like a credit card?
Sol (Cali) What methods do some of you use to keep track of the properties you are interested in when you go scouting? Excel? Yellow notepads..? Etc.
Mike_Summey Roger, I have an interesting story to tell you when you get back. This conference is really a good one & Terry does things right.
Mike_Summey chad, that’s correct unless rates are falling.
Zoe Doxa Pscherer, I think our housing authority is hooked up with HUD
chad Sol Cali, I print everything out on the computer and have a set of papers for each property
Mike_Summey elizabeth, not the future advances are only allowed occasionally not every few months. You have to pay the loans down enough to before it’s worth your time or the bank’s to readvance.
Pscherer Zoe that’s correct. They will lend at very low interest rates but run out of money as they get near your states fiscal year.
Roger Dawson Mike, give Terry my best regards. He’s a good guy.
Zoe Doxa Thank you
Sol (Cali) Chad, do you collect it and print it out from excel or something?
chad No, I don’t use exel
chad I jsut use Word and keep a list of al the important info
Mike_Summey Sol, I keep a separate file on each property and make a new one each year. In the file I keep all of the receipts, check copies and anything else that is going to eventually flow to the Schedule E’s on my tax return. Every dollar that shows up on my tax return has a document to back it up.
chad Mike and Roger, I know you don’t advocate flipping, but it seems to me that the skills you teach for evaluating properties could also be used for properties to flip
Pscherer Chad that is true but flipping is more dependent of market conditions
Mike_Summey I use a combination of Quicken Home and Business and EXCEL. I wa audited this past year and the IRS agent said I had the cleanest records he had ever audited.
Pscherer and less on your ability to pick property
chad I see
Sol (Cali) Mike, that sounds like a good idea for the properties you have, but I’m finding that when I go scouting for new properties (weekend 2), I have a lot of houses to go back home and compare. I’m trying to organize the “potentials”…
ken mike what would you use excel for?
Pscherer Quicken also makes a rental property application but it is only good to 10 properties
Roger Dawson Chad, we just believe that creating a cash flow, however small, is more important than a one time gain.
Mike_Summey Sol, you can eliminate some of them by making offers on them. Don’t try to work too many at one time.
chad I know, Roger, but is there any reason someone couldn’t do both at the same time?
Mike_Summey ken, I have EXCEL sheets set up for each property with the same info that flows to my Schedule E. I transfer the consolidated infor from Quicken to the appropriate line on the EXCEL sheets. My EXCEL sheets have a column for each month of the year and a yearly total.
chad I need some quick cash sometimes, and I’m not a JOB kind of guy.
Roger Dawson Chad, it’s just a matter of philosophy. Would you rather have $30,000 now or $100 a month for the rest of your life?
ken Mike does quicken walk you through setting that up or is that somthing you learned your self?
Pscherer Chad–you think flipping isn’t a job???
chad Yes, but it’s my own job.
Mike_Summey chad, there’s nothing wrong with flipping a property now and then if you need quick cash. Just understand that won’t build wealth, but it will keep food on the table if you’re successful doing it.
Zoe Doxa Mike & Roger, I guess what I need to do is study the WM$ books more before I Participate on this chat!!!
Mike_Summey ken, it is something I developed myself.
Roger Dawson Zoe, don’t feel that way. You’re welcome here!
elizabeth Mike, do you use just one Property Management company for all your properties, or several?
Mike_Summey Zoe, there are no dumb questions, just dumb people because thay won’t ask questions.
chad Yeah, Zoe, I usually don”t understand anything that’s going on
Pscherer Zoe you will learn a lot ust by reading
elizabeth LOL
Pscherer Ask lot’s of questions it stimulates everyones thinking
elizabeth Mike, what is your offer criteria as far as percentage of ARV? 70%? 80%?
ken zoe somtimes i write my questions down during the week so i don’t forget
Mike_Summey If any of you haven’t read the Weekend Millionaire books, you’re missing some of the best investing information you will ever find. the books are written so everyone can understand them and if
Mike_Summey If you do have a question, Roger and I are here each week to help.
hottie It was educational listening to everyone, but I need to run. Thank you and good night!!
Pscherer We give the WM books to our friends–
Roger Dawson Bye Hottie
Zoe Doxa Thank you Roger, and I do feel welcomed but I like it when my questions are beneficial to everyone and not only myself. I will certainly pepare myself
hottie Bye Roger and Mike!!
Corey Mike and Roger thanks sooo much for doing this chat for all of us.
Sol (Cali) I second that. I really appreciate you guys being available to everyone!
Zoe Doxa Safe trip back Roger, and thanks Mike for the knowledge
elizabeth Mike are all your properties in the Asheville area?
Roger Dawson Our pleasure Corey. We remember how scary it was when we got started
Mike_Summey elizabeth, I only have one criterion, whatever offer I make must cash flow. Price is only one part of value. Terms is the other. The Offer Generator show you how to balance them to create dozens of different kinds of offer for any given property that will all cash flow.
Hack Sells Thank you all, I have to leave but will be back for future chats.
elizabeth OK–thanks! I’ll have to check it out.
elizabeth Bye Hack.
Roger Dawson Bye Hack
Mike_Summey Zoe, feel free to help yourself. You’ve be surprised how may others it helps too, but they won’t ask.
Zoe Doxa Thanks Mike I will certainly jump on that purchase for the “Offer Generator”
Roger Dawson I’m staying with friends on the beach in Jac, Cost Rica and I need to get back to them now. See you next week.
Mike_Summey I’m going to have to sign off also. I have to get ready for tomorrow. I’m the opening general session speaker.
elizabeth Thanks Mike and Roger.
Zoe Doxa Blessings to everyone until next week
Mike_Summey Goodnight all. See you next week.
chad thanks, everyone.
chad Goodnight
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