Chat Transcript - September 17, 2007
Posted on September 18, 2007
Roger Dawson Hi everyone
Mike_Summey Hello everyone!
rosebud Good evening, Mike and Roger
Mike_Summey Hi rosebud, glad to have you with us tonight.
rosebud It’s been a while since I’ve been able to join this chat, but I’ve been reading the transcripts.
Mike_Summey rosebud, well you’re here tonight. Any questions?
Mike_Summey Hi gggggg & TAS
TAS Evening Mike, Roger, and everyone else.
Mike_Summey Where is everyone tonight?
rosebud No; I’m still reading the book, although I’ve received the OG. I’ll probably just listen.
gggggg HI When looking for income property out of my state how can i put a hold on it until I can go and look at it before someone else puts a offer?
Mike_Summey rosebud, listening works better when we’re answering your questions. Also, install the OG & play with it. You’ll learn a lot while doing so.
TAS Have all of the foreclosures motivated the lenders to deal any more on REO properties?
rosebud Thanks, Mike. I’ll do that. I’m anxious to get out there and put these great ideas to work for me.
Mike_Summey ggggg, email a letter of intent and put in the letter that the offer is contingent on the seller granting you time to inspect the propert.
Mike_Summey TAS, lenders are like any other sellers. The more inventory they have the mor flexible they become.
gggggg ok Do I offer a small nonrefundable deposit too?
rosebud And right now they are building a huge inventory, I’m sure. Right?
Roger Dawson In So. California builders are building in enormous incentives (sometimes up to 100K) trying to move their inventory, but they haven’t yet started cutting prices, which gives them problems with earlier buyers.
Mike_Summey gggggg, you can do that if you want. The letter of intent can ask for the time to inspect and include an offer to transfer the information to a formal contract with a deposit following the inspection. That will work unless you ask for an extended time to do the inspection. Then you may have to pay a small non-refundable deposit to take the property off the market for a while.
rosebud I’m primarily interested in duplexes right now, just to start generating some income, then look at single-family homes. Is there a flaw in my thinking?
Roger Dawson gg: I wouldn’t offer a deposit unless they push the issue. They probably won’t demand it.
Mike_Summey rosebud, foreclosures are reaching an all time high, but in my opinion, it will take a few months for lenders to build inventories large enough to become very flexible.
TAS I have seen several foreclosure notices on builders in the area. The slowdown is hitting everyone.
Roger Dawson Rosebud: duplexes make good rentals. Obviously they’re hard to sell than single family, but with our program you shouldn’t be planning to sell.
Mike_Summey rosebud, just be sure to take into consideration that with duplexes, you will have some common area expenses that you won’t with single family. Lawn mowing, snow removal, etc.
Mike_Summey Hi Ryan
Roger Dawson Mike, what’s snow?
Roger Dawson Hi Santo
gggggg Mike/Roger Thanks for the advice.
santo hi roger
Mike_Summey TAS, builders here are just starting to feel the pinch. I think it will get a lot worse for them before it gets better.
Mike_Summey Hi santo & harriety
Mike_Summey Hi CBS
harriety Hello Mike
santo hi mike
Mike_Summey Hi maria
rosebud I’ve been in some of those weekend investment seminars before and one of their suggestions is buying newly constructed homes in a phase that is built out but the developer has not sold all the inventory. What do you think of this?
maria Hi Mike Hi Everyone
TAS For builders in Texas inventories are up and pre-sales are down. In a few months some will have to liquidate just to cover their positions.
Mike_Summey I have the mother of a young man I coached in little league many years ago on her way over to get me to autograph some books for her children.
Mike_Summey Hi alex
CBS Evening all.
santo mike, roger did a great job hosting the last chat, but we all missed you
alex.elsiete@gmail.com Hi
Roger Dawson Rosebud: Run the numbers and see if you can support the payments with the NOI
rosebud Roger, thanks for the tip about the expenses with duplexes. I’ve given some thought to that very thing.
Roger Dawson Thank you Santo
Mike_Summey rosebud, I’d be very careful. If the developer goes under he could leave a mess for everyone else to have to clean up.
rosebud Okay, Mike. Thanks.
Mike_Summey Thanks santo. I knew Roger would handle things very well. He’s a pretty smart guy.
Mike_Summey Hi Penny
Roger Dawson Hi Penny!
Penny hello Mike & Roger
maria Roger I must thank you for your book Secrets of Power Negotiating
Roger Dawson Thank you Maria!
maria I am half way through reading it and it has already paid for itself
CBS Roger, ditto on the cds for Power Negotiating.
Mike_Summey Hi Fred
CBS I can’t stop listening.
Roger Dawson Thanks cbs!
Fred Hello everybody
Roger Dawson Hi Fred
rosebud Hey, Fred.
santo mike, any news on the rates
Mike_Summey CBS, is it because of that funny accent he has?
CBS No, the Winston Churchill joke.
CBS lol lol lol
Roger Dawson Santo, I think that the Feds are bound to cut rates by half a percent when they meet tomorrow.
Mike_Summey I agree with Roger ssanto
Mike_Summey Hi Justin
Roger Dawson Hi Justin
alex.elsiete@gmail.com why?
santo thanks roger and mike
Roger Dawson To make credit more available to try and avert a crisis.
alex.elsiete@gmail.com I am a Renter, what crisis?
CBS So we should wait a little longer before locking in a rate?
Mike_Summey alex, I think the real estate problems are beginning to create a drag on other parts of the economy and it will take some rate cuts to head off a big recession
Roger Dawson Alex, money is tight right now because of the investor losses in sub-prime loans.
rosebud I remember a few weeks ago Bob Roberts predicted declining rates by spring, so maybe we’ll see this start happening tomorrow.
CBS I had a couple of brokers trying to get me to lock in today. Which makes me a little suspicious.
TAS Does anyone know of laws that protect a renter when the property owner is being foreclosed on, or are they just out of luck?
Ryan-NC I think the crisis is here already and not likely to get better for at least the next 18 months
Roger Dawson CBS, I wouldn’t. Wait to see what happens tomorrow.
Mike_Summey CBS, when banks are trying to get you to lock in fixed rates you can bet they believe rates are going down.
Mike_Summey Hi Jeff
Roger Dawson TAS, in California the new owner must honor contracts with renters whether it’s month to month or a long term lease.
santo mike, how long can it take to refinance a property, after you buy one with a 20% down payment, i was looking at a good deal on a four family
CBS My thoughts exactly.
Ryan-NC foreclosure losses and REO inventories at the banks are increasing every month - basically the lending standards have been way too lax for years
Mike_Summey I agree Ryan
Mike_Summey santo, usually the banks will want you to wait 12 months before refinancing.
santo thanks mike
santo mike, by the way that four family is $45,000
Ryan-NC santo - the banks call it “seasoning” - ask them if they have a seasoning requirements or restrictions
rosebud Wow, where is that deal?
Mike_Summey santo, I don’t know how you are finding prices like that.
santo mike, prices are going down where i invest like everywhere else
rosebud Good for you. Just hope I find some of these nuggets.
Roger Dawson Is there any sign that rents are going down too? Usually they don’t.
Mike_Summey Usually when prices are falling and it is difficult for people to buy, rents rise because more people are needing to rent.
Mike_Summey The rental market runs opposite to the sales market.
Jeff W Thats good news
santo mike, my broker just bought a two family for $27,900, rents are staying where they are
Mike_Summey It’s the combination of falling prices and rising rents that eventually stems a down market and gets things started going back up. When the rents can justify the price people start to buy again.
Mike_Summey Hi Zoe
Mike_Summey santo, what condition are the propertie in?
gggggg Mike,with falling sale prices,could I offer 50% off the listing price of a mulifamily?
Zoe Hello Mike, it’s been some time since I’ve been on
TAS gggggg, you an offer anything you want. It is up to them to accept, decline, or counter.
Mike_Summey ggggg, you can offer anything you want. The tougher it gets to sell the more your offers will get attention.
santo mike, needs a few thousand dollars work
Ryan-NC you can offer any price you want - question is: whether the seller will accept or counter
rosebud That still sounds like a good deal, especially if you are handy enough to do some of the work yourself.
Mike_Summey My newspaper article this week will be about the tax complications that may hit people who are foreclosed upon.
Mike_Summey Any debt that is cancelled in a foreclosure becomes taxable income to the person who is foreclosed upon.
gggggg Thanks guys, I just don’t want to get beat out after researching an area for over one year.
Mike_Summey Hi Kelly
Kelly hello all
TAS gggggg, I think Mike and Roger would agree that you should be putting out many offers, and not putting all of your eggs in one basket. When you are looking for creative terms you have a higher percentage of rejection.
Ryan-NC Mike - your’re talking about short sales?
santo mike, i am tempted by these low prices, but i am sticking by my plan of wait until the new year, to build my cash reserves
Mike_Summey Ryan, that applies to short sales also.
Mike_Summey santo, good move.
alex.elsiete@gmail.com What is a Short Sale?
Ryan-NC cash will be king for the next 18 months - a great time to acquire buy and holdproperties
TAS I have to run. Thanks all. See you next week.
rosebud Ryan, what part of NC are you in?
rosebud I’m in the western area myself.
Mike_Summey Ryan, you are correct. Everyone who has been frustrated by not being able to find deals for the past few years are going to find more than they can buy in the next couple.
Ryan-NC short sales - are selling or buying pre-foreclosure properties prior to the auction - generally the seller are upside down with no equity - Rosebud - I’m in Charlotte
CBS Charlotte here too Ryan.
Kelly Mike, last week we talked a little about Duplexes. Do you see much down side to duplexes over single family houses? What about 4 plexes? I know you don’t recommend large buildings for beginners.
santo mike, do you have any of the sub markets where you are, like where i invest in buffalo ny
rosebud Thanks, Ryan. Great location. We lived there for 18 years.
Ryan-NC MIke - I agree 100% percent!
alex.elsiete@gmail.com Ryan-NC thank you
Mike_Summey Kelly, multi-family properties often have common area maintenance and other expenses that single family do not. The reason we recommend starting with single family is so you can gain some experience before moving into the larger properties.
Ryan-NC generally, anything under four units is financed as residential - SFHomes do have the benefit of selling more quickly and generally appreciate faster than multi-units
Roger Dawson But multi-units usually show better cash flow.
santo Ryan-NC, i will be looking for four 4 family homes at the start of the new year
harriety whats your method for locating short sale properties
Mike_Summey Another reason I like single family homes is because they generally attract a higer quality tenant base.
Zoe Mike, I have poor credit but highly motivated to make changes with implementation of the 3 D’s formula in [MINDSET]. Two fairly close friends of mine want to discuss a partnership in RE Investing with me because of the knowledge I have acquired from the materials WM. I appreciate your advice
Mike_Summey Thanks Zoe
santo mike, when is the new book coming out
Mike_Summey Harriety, I don’t usually look for short sale opportunities. I’ve been investing in this area long enough that the ones I buy now come to me rather than the other way around.
Roger Dawson Harriety, a good place to start is the publication of foreclosures. You make a low offer to the seller and the seller takes it to the lender to see if they’ll accept it and write off the deficit.
rosebud Harriety, reading the foreclosure notices in the paper or at the courthouse is one way.
Mike_Summey Santo, the last work I got was that it would be out in December, but I don’t expect it to be in the bookstores before January or February.
harriety thanks
Mike_Summey word
santo mike, can’t wait
Zoe Roger, is the WM CD’s verbatim to the book?
Ryan-NC Harriety - I’m a realtor by day, so I sell short sales as a realtor - on occasion I buy them …. most of my leads are divorcing couples or people currently in Chapter 13 bankruptcy, but unable to afford the bankr. plan paymenst to the court
Mike_Summey Zoe, it is similar, but not a verbatim reading. The same principles are discussed but in audio English rather that written. Plus there is additional material as well.
Roger Dawson Zoe, not exactly, but similar enough. Some people learn better by listening and you can do that while your’re driving around looking for properties.
Kelly I made appointments to see 5 houses last Tuesday. One ended up being bank owned and two were within 3 weeks of forclosure. I found this out when I was in the houses looking at them. The two pre forclosures I made short offers on. one was declined and the other is still out there.
harriety Ryan-NC so the divorcing couples and people find you because you have built a reputation or do you advertise or both
santo mike, what is the new book all about
Zoe Mahalo Mike & Roger
Mike_Summey Zoe, the big advantage of the audio program is that it lets you listen to what you are supposed to be doing while you are actually out in your car doing it.
Roger Dawson Kelly, that’s the way to do it.
Roger Dawson Santo, it’s about negotiating good deals and how to find bargains.
Ryan-NC people try to flip these properties, buy and hold is a better strategy because it is hard to get significant discounts from the bank - 80% LTV is the best case scenario most of the time.
santo thanks roger
Mike_Summey Kelly, banks will not reject a short sale unless they think they can get more money by going through the foreclosure process.
Ryan-NC I have a certain reputation for handling difficult houses and people, but I also advertise - HAVE to market yourself.
Zoe Got it! I have just recently noticed a huge amount of sales of properties in my city both involving FSBO’s & RE-Agents. I wonder why that is?
Kelly Mike, the realtor I am working with told me that banks average 30-40 thousand loss per forclosure. The offers I made would have been less of a loss than that.
harriety Mike-what’s your suggestion to build a reputation so that pre-forclosure opportunities come to you rather than seeking them out (e.g. short sale). Perhaps spelled out in WM book..but still reading. Read about building rapport with lenders but havennt gotten further…yet
Kelly Of course I have no idea if that amount is accurate or not.
Mike_Summey Kelly, why would it make sense for a bank to turn down a short sale that would put money in their hand right now when it takes months to get a foreclosed property through the process and sold?
Ryan-NC HArriety - focus on neighborhoods first, the opportunities will come - that is what realtors do … we call it farming a neighborhood
santo have to go, nite all
Roger Dawson Goodnight Santo
rosebud Good night, Santo. Loved your great deals!
Mike_Summey Harriety, the only way I know to build a reputation is by being fair to people and demonstrating that for many years.
Mike_Summey Goodnight santo
Kelly Mike, that is a good question. Maybe they don’t lose as much as that person quoted me.
Mike_Summey Kelly, when a bank takes a property back in foreclsoure they put it on the books at a Net Realizable Value (NRV) and that takes into consideration their best estimate of time to sell the property and the price it will bring. The loss is taken when the property is put on the books.
Zoe Thank you Mike, Roger & everyone else. Goodnight and take care
Ryan-NC of course, being fair and honest goes without question …
Roger Dawson Goodnight
Mike_Summey One advantage short sales have for banks is that they can put part of the money back to work immediately. They are in the business to rent money not property.
rosebud Good night, all. Thanks for all the good info. I learn something every time.
Kelly My offer is all cash, no contingencies so I was hoping that would be an advantge to get the deal going. We’ll see
Roger Dawson I need to run. See you next week.
Mike_Summey We’re glad to help and hope you will all be with us each week and invite your friends to join in too.
Mike_Summey I have to run as well. See you here next week. The rest of you can continue the chat amoung yourselves as long as you want.
Mike_Summey Goodnight
harriety gnite all. thanks
Kelly Thanks All
Penny goodnight
Ryan-NC kelly - keep us informed of the progress of your offer
Ryan-NC CBS - you here in charlotte
CBS Yes.
CBS Just getting started.
CBS Fast, you missed it by an hour.
CBS 8 Eastern
fastrivers I know, I am very new to this and didn’t know if anyone was still out there?
fastrivers I was wondering what the best way to see properties wheen they are listed with so many different realtors
CBS I would suggest getting a buyer’s agent that will work with you for a LOT less than the 3% they usually want.
CBS Let them do some of the leg work.
Ryan-NC sorry -
fastrivers like half that?
Ryan-NC I locked up …
CBS I’m really new to this as well. I’d say to negotiate what you can.
Ryan-NC hey CBS - check out metrolinaREIA.org - a local real estate investors club
Ryan-NC here in charlotte
CBS Ryan, email me at brent@safritproperties.com. Maybe we can get together sometime.
CBS Thanks for the tip, I’ll check it out.
Ryan-NC will do …
fastrivers antbody else live and trying to buy in very rural areas, where tourism is the main business
CBS Gotta go help the kid with some LEGOs!
Ryan-NC good night
Ryan-NC the realtor commission is always negotiable - but generally the seller pays it … and the price of the house always reflects it … the 3% is real only a concern on the listing side - not the buyers side
Ryan-NC fst - where are you ?
fastrivers so that means there is no need to beat up your buyers agent especially if you expect them to work hard for you?
fastrivers Ryan,
fastrivers rRyan, I am in Bryson City, NC
fastrivers itsounds like you are in Charlotte
Ryan-NC yup …
Ryan-NC Bryson City — white water - right ?
fastrivers That is right. I own a rafting company
Ryan-NC I work for less than 3% - but you are right it really only matters on the selling side
Ryan-NC gnerally, after a deal or two - ask the the agent for a “buyers rebate” - i.e - you want a part of the 3% commission - especially if the work they do is simple or straight forward
fastrivers That sounds reasonable
fastrivers any way to find out rental values in my area?
Ryan-NC hummmm…
fastrivers I could not find aything online or even any for rent that were not vacation homes?
Ryan-NC ask around … but the best way is to call rtentals and ask …
Ryan-NC hard with vacation propertyies
fastrivers Alot of modular and trailers any thoughts on that?
Ryan-NC start with teh newspapper or bigger realty firms
fastrivers good idea
Ryan-NC trailers are a specialty market … and they generally decline in value
Ryan-NC modulars …I like … most people don’t
Ryan-NC welcome back
fastrivers got bumped off
Ryan-NC LOL .. no problem
Ryan-NC happens to me all the time
fastrivers I am less wary about modulars, I definitely am not interested in being a slum lord
fastrivers how is the market changing in Charlotte
Ryan-NC very slow
Ryan-NC the mortgage meltdown
Ryan-NC houses on the market a long time
Ryan-NC the slumlord is not an issue .. if you keep your properties up .. and screen your tenants
fastrivers ok
fastrivers thanks for your info. gotta roll
Ryan-NC me too .. take care
Ryan-NC maybe next week
» Filed Under Chat Transcripts
Comments
Leave a Reply