Chat Transcript April 30, 2007
Posted on May 1, 2007
Bill L Good Evening….
rshoe hello all
Mike Summey Hi everyone
Brian Hi Mike
Al Lee Hi, Mike. I beat yo uhere today!
rshoe Hi Mike
Bill L Giid Evening Mike
Al Lee Bill type swith an Irish lilt
Bill L I really meant good not giid
Mike Summey Al you have no right to be talking about someone elses typing.
Al Lee Mike, YOu are right about that.
Mike Summey Where’s everyone from?
Bill L Manassas, VA
Brian Mike thanks for the favour regarding the testimonials..much appreciated!
Mike Summey Glad you could join us Bill
rshoe Massachusetts
Mike Summey Manassas is a great place.
Bill L I have read both your books Mike, and really enjoyed them.
Mike Summey rshoe, you’re near where our programmer for the Offer Generator lives. He’s in CT
Mike Summey Bill, which two did you read?
Al Lee Mike, I have a chess game gong with a guy in Asheville who has a neighbor named Summey. Jean, or John, maybe.
Mike Summey g
Bill L Yes we moved here in 86.
Mike Summey Don’t know any Summeys by that name Al.
Mike Summey Wonder where Roger is?
Doug_in_CT Hi Mike, That was a very fine and inspirational article in the Ashville paper this week.
Mike Summey Any burning questions from anyone before it gets busy?
Mike Summey Thanks Doug! I’ve received several compliments on it.
Mike Summey i eplessin
Mike Summey HI
Brian I’m still putting offers in on a weekly basis BUT where I live most single family houses cost $400K and they take in about 1$1750-$2000 our 10 year mtge rate is 5.5% any comments?
Bill L Millionaire Mindset and Real Estate Deals
Mike Summey I’m on a different keyboard tonight and it feels totally different so if I mess up on the typing, blame Al.
Al Lee Hey, Roger!
Bill L Good Evening Roger
Mike Summey Theeeerees Roger Dawson
Roger Dawson Hi Al, Mike and everyone. Sorry I’m late.
Brian Hello Roger
Al Lee Two demerits!
Al Lee If you reach ten demerits yo uhave to caddy for Mike.
Mike Summey I just received the final marketing packets for the new office building I’m planning to build.
Roger Dawson Will he give me 15% of his golf winnings?
Al Lee Mike is a VERY generous tipper.
Mike Summey I played yesterday, had 46 on front 9, then started the back double bogie, bogie and ended up shooting 38 on the back. A real up and down day.
Roger Dawson Front page article about foreclusures in today’s LA Times. A lot of speculators (as opposed to investors like us) are in trouble.
Mike Summey The scorecard looked like 2 different people played the round.
Doug_in_CT We have been actively hunting deals here in the CT area for the last several months. We have been experiencing a pull back in prices after 5 years of double digit appreciation, but the sellers I have been meeting don’t want to let go of any of that appreciation.
Al Lee Brian, if you care to look into cash flowing propertie sout sid eyoru locale, go to www.buyRentHouse.net. We have put a lot of new infor up on the website.
Bill L Roger, Mike, want does the tool kit do? The offer generator look very interesting
Mike Summey I have an article from Saturday’s paper. The headline reads “Economy Slowest in 4 Years.”
Brian Thanks for responding Al…
Mike Summey Doug, it will come. They have to sit on it for a while before they are convinced they aren’t going to get it.
Roger Dawson Al, what does sout sid eyoru locale mean?
Roger Dawson Hi Penny?
Penny Hi Roger?
Al Lee Roger, in Italy it means notta neara you housa
Brian I’ll try this again as I am kind of perplexed…. I’m still putting offers in on a weekly basis BUT where I live most single family houses cost $400K on a god day and they take in about $1750-$2000 our 10 year mtge rate is 5.5% any comments? Roger/Mike..
Mike Summey Bill, the Toolkit has calculators, forms, record keeping tools and more. It is a very good compliment to the OG. Use th eOG to buy the properties and the Toolkit to keep up with them.
Roger Dawson Brian, it means you’re not living in an area with many rentals. You need to look in areas where blue collar workers live.
Mike Summey Penny
Penny Mike
Bill L Thank You, Mike…
Doug_in_CT My take Brian is that you don’t have enough room to make the NOI work with those kinds of rents at those prices, you need to find the $250,000 opportunity in the $400,000 neighborhood.
Brian Thanks Roger…what would you do if you lived in Torotnto….I’ve bought 2 properties using you and Mikes system but things are getting out of reach in the last couple of years???
Roger Dawson Bill, your yellow writing is hard to read. Could you change to another color?
Mike Summey Brian, that is a reflection of the hot sales market we’ve just been through. It will take a while for people to come back to earth. Even in a hot market, there are always deals out there, they’re just harder to find. As the markets cool the deals will become more plentiful.
Mike Summey Hi Penny
rshoe I’m new to investing and I’m actively farming an area in Rhode Island. I made a lot of calls but I’m finding it difficult to find a property manager who manages single family homes. Any suggestions?
Bill L Is this color any better?
Doug_in_CT Hi rhoe, I am your neighbor over here in CT, what is the median price in your farm area?
Mike Summey rshoe, in some areas property managers are harder to find than others. In the beginning you may have to use someone who both sells and manages.
Roger Dawson Rshoe, I think that’s another area that a cooling property will cure. In a hot market agents don’t want to take time with management. Now they’ll need the income.
Mike Summey Bill, it is still very faint. Try a darker color of red, blue, green, etc.
Al Lee Interestingly, Bill’s tyoe is showing a black on my screen. I have the window expanded so I have a larger text area, but that shoud lnot make a difference.
Mike Summey rshoe, in the past 3-5 months I’ve seen several real estate sales people moveto other employment. 3 years ago they were flocking to get into sales, now they’re flocking to get out.
Mike Summey Al, I saw Bill as light yellow and then faint blue.
Bill L How about now, I played with it and becuase the typying shows up as black on my screen I can’t really tell. sorry for the side track.
Mike Summey That’s great Bill
Mike Summey Anyone have any thought on zoning versus no zoning?
Roger Dawson Mike, I played golf on Saturday in a Producer’s Guild of America tournament. I’m going to tell everyone I played a PGA tournament!
Doug_in_CT Mike, have you ever been tempted to get you real estate license? If a guy buys 100 homes at $100,000 and he saves 3%, or $3,000 per purchase, if he does that 100 times it is $300,000. I refer to that as serious money.
Bill L I am still so new to investing that I don;t know what I don;t know.
rshoe Doug_in_CT median price is around $200
Mike Summey Doug, I’ve had my broker’s license for over 30 years, but I keep it in inactive status. I find the liablility of it far outweighs the advvantages.
Mike Summey Bill, that’s why we host these chats. We want our reader to have the opportunity to ask questions and learn.
Al Lee That 3% is what you pay for someone else to do the WORK of finding properties for you. If you do it yourself, you have a JOB, not an investment. My humble opinion.
Roger Dawson Doug, it’s also important to realize that that 3% is cash at closing and can be used as part of your down payment. That’s one thing that Mike and I disagree upon. I think that my broker’s license is a plus.
Mike Summey Hi cstew.
Roger Dawson On the other hand Mike is richer than me.
eplessin42 This is my first session and I am new to the investing, so I’ll take notes and at sometime in the future I hope to participate .
cstew hi all, just going to lurk tonight
Al Lee eplessin, you should go back and read the transscripts on the WM website of prior chats. There is lots of good info there.
Mike Summey Roger & Doug, in NC it is very difficult to act as a broker when you are buying for yourself. The liability issues and state required disclosures cause more problems than it is worth.
Roger Dawson Mike, I’m in favor of zoning because conformity raises the value of property. That doesn’t make me a socialist in your eyes, I hope.
Bill L One of the questions I have is how to set up tracking methods for both offers made and properties
Mike Summey eplessin, we all friendly here, so feel free to jump in anytime. Just remember there are no dumb questions, on dumb people who stay that way because they won’t ask.
Doug_in_CT rshoe, that is a tad higher than here. I think we are more like $180,000 in the farm areas for the entry level 3 bedroom, 1 bath houses here. I find it a challenge to make it work with NOI when I use all the reserves recommended by the Weekend Millionaire program. But I am being patient.
Mike Summey Roger, if you want conformity and increased values, why don’t you just buy in a planned community that has restrictive covenants instead of zoning. Of course if you did that you would have to pay for the protection you want instead of stealing it from your neighbors.
Roger Dawson Okay Mike I got it. Taking this country back one county at a time, eh?
Mike Summey Bill, can you be a bit more specific. What do you want to track?
rshoe Doug_in_CT, I agree. Even before visting the property, given the NOI reserves I know I can spend a max of $145K given the latest 30 year interest rates…so that means I need some unbelievable financing or I have to negotiate down approx. $55K. Not easy to come by but I’m working at it…
Mike Summey rshoe, have you made any offers inwhich you asked for seller financing at 0% or very low rates?
rshoe Not yet
Bill L Mostly I would like to track offer being considered, offers made and pending, porperties owned and being worked, marketing projects and results. I thought that building a database would be a great idea and really wondered if there something all ready developed.
Roger Dawson HiMark!
Mike Summey When I first started making offers asking for 0% seller financing, my buyer’s broker thought I was crazy. After the third one was accepted, he said maybe this really does work and he bought two properties for himself using the same method.
Mike Summey rk
Mike Summey Hi Mark
Brian I’ve just come to the conclusion that one can make a fortune buying 4-6 plexes that are inclusive utility wise. I bought a place 2 years ago using Mikes/Rogers book. The numbers worked and Mike even was kind enough to go over them. The only thing was the utilities, as they were all inclusive. Well when I bought ( it was a 4 plex) the tenants started to move out. I immediately reaised the rent and made them accountable for the utilities….in under 2 years my mortgare broker/agent tells me the my unit has gone from $300K to $410-$425K
MarkNC HI everyone
Roger Dawson Brian, that’s hard to do unless the units are metered separately, isn’t it?
Mike Summey Brian, good for you. I charge a utility surcharge when I have to supply water or other utilities. I adjust it annually and have made adjustments semi annually if costs got too high. To do this you need to have your leases worded so it is clear that the utility surcharge is for utilities and not part of the rent and that it can be increased at anytime if usage go up.
Mike Summey The primary thing I supply in apartments is water, so I call it a water surcharge in the lease.
Brian Roger..the 4 plex is split into 2 pieces (each having a meter taking care of a 2 bedroom and a 1 bedroom) I split the utilities 60%-40% seems to work very nicely…by the way thanks again for helping me out with the testimonials page!
Brian Mike…I NEVER ever thought of that! I will indeed do what you reccomend! Many thanks sir!
Roger Dawson Brian, refresh my memory! Testimonials page?
Mike Summey Doug, check out the Asheville Citizen=Times tomorrow. I have an op-ed piece scheduled to run on the opinion page.
Brian Mike took care of it for me Roger.
Mike Summey Brian, I find that using a fixed monthly surcharge make it easier on the tenants. If they start to use too much, I warn them first and if it doesn’t get better I just increase the surcharge a little to make up for it.
Doug_in_CT I still have my Mike Summey Google Alert set, so I should be notified, but I will keep an eye out. I saw the article your speech about zoning about a week ago.
Mike Summey Brian, a $10 monthly increase in a water surcharge on 100 units amounts to $12,000 per year.
Doug_in_CT rhoe, I haven’t found the single family property manager specialist yet either, but I am still searching.
Brian Mike, you’ve got me thinking.
Mike Summey If you plan to use a utility surcharge, be sure it is a separate line item in the lease in which you fill in a blank for the initial amount of the surcharge and have language that gives you the right to adjust it at anytime throughout the lease. If you just roll it into the rent, you have to wait until the lease renews to make adjustments.
Bill L Mike & Roger, can you recomend a book on setting up an LLC?
Brian Mike…Bless YA
Mike Summey Doug & rshoe, you probably won’t find a single family specialist, but there are many rental agents that handle a mix of single family, multi-family and commercial rentals.
Mike Summey Bill, check out www.sutlaw.com and let them know I sent you if you decide to work with them.
Bill L I will MIke, Thank You…
Mike Summey The primary reason I use a property manager is to put someone between me and the tenants that is licensed and knows the landlord tenant laws.
cstew k, signing off, will read the transcript tomorrow, night all
Mike Summey A friend of mine who was trying to manage 4 units himself was just sued for discrimination because he turned down an applicant without giving them the correct reason for doing so.
Mike Summey Has anyone approached a seller with the idea that seller financing is a way to convert equity into an income stream for retirement?
Mike Summey I just mailed a check today for $1,000 to a seller who financed $140,000 of a purchase for 140 months at 0% interest. Today’s check was the 120th payment.
Doug_in_CT I got a very good appriasal on my personal residence recently and I am trying to decide whether to do a cash out refinace on the first (where I have good rate of 5.875% fixed for 30 yrs) or to go with an 85% LTV on a second at something like 7.25% fixed. The second doesn’t cost the $3-$4,000 that the first does to originate, and the payments come out about the same, the less than $100 difference in payments indicate that it would take 5 years to pay back the origination costs. Which route should I choose?
Bill L That sounds like one of the examples from the Secrets book.
Mike Summey Bill, it is! 
Mike Summey Doug, I’d have a hard time giving up the 5.875% rate and going to 7.25 just to take out some cash.
Bill L I think I will give the OG and the Toolkit a try, I think I will also get the FAQ book at the same time.
Mike Summey bill, I think you will be very pleased. Maybe there is someone else in the chat using the OG who can tell you about it.
Penny goodnight everyone
eplessin42 Mike what type of purchase was the 140k? an what is the OG.
Mike Summey Doug, aren’t you using the OG?
Brian Mike/Roger….thanks very much for the nights advice..good evening.
Roger Dawson Goodnight Brian
Bill L When I read the offer and the negotic tecnique used and knew that very important to understand the seller’s reason for selling.
Doug_in_CT I am using the OG Mike, but are you indicating you could use it to help determine financing on my personal residence?
Al Lee Well, it is time for me to go do family duties.
Al Lee See you all next week!
Roger Dawson Goodnight Al
Al Lee Goodnight.
Mike Summey eplessin, the OG is the Weekend Millionaire Offer Generator. You can check it out at www.weekendmillionaire.com/store Be sure to click on the red button that reads “Click here to see how the Offer Generator works.”
Mike Summey Doug, no I thought you might could tell Bill about it.
Roger Dawson I need to leave. I’ll be in Florida next week, but back with you in two weeks.
Bill L Doug I woul dbe grantful for any tips/advice on the OG
Bill L Roger have a nice trip see you in two
Doug_in_CT Bill, you need to get the Offer Generator and play around with it awhile. You need to remember to save lots of different offers, play with bank and owner financing until you make the NOI work.
Mike Summey eplessin, the 140K seller financing was part of a $200,000 purchase. I borrowed $80,000 on a first mortgage from a thrid part private investor, got the seller to carry back $140,000 at 0% interest. I put $20,000 in my pocket at closing and had the purcase fully financed.
Bill L IN other words practice, practice, practice….
Mike Summey Bill, that’s correct, but the OG make practicing very easy.
Mike Summey Well floks, I’ve got to run also. I’ll see you here next week and will try to have a special guest to fill in for Roger.
Mike Summey folks
Bill L Well Thank You Mike, I will do as you suggested and look forwARD TO SEEING YOU NEXT WEEK.
Mike Summey Goodnight
Bill L GOOD NIGHT
jazztrptaf hello all….
jazztrptaf i guess i missed the main chat….
jazztrptaf anyone here in the lobby?
jazztrptaf guess i’ll try & catch up with the chat next week….. L8R all…
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