Chat Transcript - December 17, 2006
Posted on December 18, 2007
Roger Dawson Hi Santo. How are you today?
santo okay, today don’t know about tomorrow yet
Roger Dawson If forgot where you live. Have you been in the bad weather?
santo in nyc small snow amount
Roger Dawson I’m in Los Angeles where it has been beautiful. Your weather has been the lead story on the news all week.
Roger Dawson I’ll give Mike a call and see if he’s forgotten us.
santo maybe upstate it’s bad
Roger Dawson Hi Mark. Welcome
MarkNC Good Evening everyone.
broadway Hello Roger and all
Roger Dawson Hi Broadway
Roger Dawson there’s Mike
santo hi mike
Mike_Summey Hi everyone
broadway hello Mike
Mike_Summey Sorry I’m late & didn’t get out a notice today, but I’ve had some problems.
Roger Dawson Nothing serious, I hope.
Mike_Summey I flew to Enterprise, Alabama to help my son get moved in for flight school at Fort Rucker and my wife fell and broke her arm while we were there.
Mike_Summey We just got back in from the airport a few minutes ago & I almost forgot the chat.
MarkNC Sorry to hear about that. Is she OK
Roger Dawson That’s terrible. How is Linda/
Mike_Summey She will have to have the arm set tomorrow and possibly surgery.
MarkNC Wow, That’s too bad
broadway OH wow, sure hope she will be ok! That’s painful
Mike_Summey She rode down to Enterprise with Matt in the Budget Rental truck and missed a step last night and fell out of it.
Mike_Summey I took her to the emergency room and they xrayed it and put it in a splint, but said she would need to wait a couple of days for the welling to go down before it could be set and put in a acast.
Mike_Summey Okay, so much for her, anybody got any real estate questions tonight.
MarkNC I have a question for you. I am looking for your new book as a Christmas gift and I will be in Asheville this weekend. Any idea of a place there where I can find it?
Mike_Summey Matt just bought his first house and he will live in it while her is in flight school.
Mike_Summey Mark, it should be in the book stores and at Sam’s Club.
Mike_Summey Hi Bob
Roger Dawson Hi Bob
Bob (vegas) greetings from sin city
MarkNC Thanks, I haven’t been able to find it in Boone but we aren’t overwhelmed with bookstores.
santo Mike, i recorded 2 one hour shows on video tape—the fellow that owns trademark properties in south carolina, i will send that tape to you tomorrow–hope your wife feels better soon—-Richard Davis is the fellows name
Mike_Summey Mark, if you can’t find it, you can order it from the website. We have received the book and it is now available in our online store. Books ordered from the store are autographed.
Mike_Summey Hi MikeF
Intromaster (MikeF) Hi all!
Bob (vegas) Is there a free excel spread sheet to keep track of rent received available anywhere on the web?
Mike_Summey My son Matt just bought a house in Enterprise, Al using the Offer Generator and the inspection form that is a free download on the website. I went with him the day before Thanksgiving and we inspected 6 houses before lunch, made offers on 4 using the OG and had an accepted offer by 4:30 that day. He closed last Friday on the house and we helped him get moved this weekend.
MarkNC Mike, If I order it tonight will I get it by this weekend?
hobbes hello everyone
Mike_Summey Mark, yes you should. It will go out via US mail tomorros.
Mike_Summey Hi hobbes
Roger Dawson Santo, Richard Davis is famous for his Flip This House show on A&E television.
santo yes Roger
Mike_Summey Roger, I just flew in from Enterprise at 7:15 tonight. It has been a hectic day. I was at the emergency room until 3:30 this morning.
hobbes if you had a choice between a nice property in a nice neighborhood where you get decent cashflow, compared to a decent property in an OK neighbothood with higher cashflow, which would you choose?
Bob (vegas) where is enterprise? AZ?
Roger Dawson Wow, Mike, that’s a tough day. Gisela is trying to call Linda now.
Mike_Summey hobbes, I’d probably buy both.
Mike_Summey Bob, Enterprise is in South Alabama
Roger Dawson Hobbes, I’d go for the nicer neighborhood every time. Better opportunity to raise the rent.
hobbes I was thinking that too, also it will probably appreciate faster in the long run
Mike_Summey Sorry about not getting out a chat notice for tonight.
Intromaster (MikeF) I was just watching the Carleton Sheets video course on DVD. He has alot of good information too.
Mike_Summey For those of you in the chat tonight, we will not have another chat until January 7, 2008. We’re taking off for the holidays.
Intromaster (MikeF) ok
Mike_Summey MikeF, which course do you have? If it is the Wealth and Empowerment course, you’ll get a 2 hour video of me.
hobbes currently, my credit card company is offering 4.99% for balance transfers into a checking account. Would it be a good idea to use that for downpayments instead of pulling from a high interest HELOC? Or will it affect my credit score?
Intromaster (MikeF) I have the no down payment course.
broadway A couple of weeks ago, we touched on property managers. You all have almost convinced me to start that. I’ve come up with some that advertise 10%. Is that a decent fee? Do you think there would be any chats with a property manager in the future?
Intromaster (MikeF) Wealth & Empowerment just came in the mail today. Cant wait to see you on it!
hobbes oh, and 4.99 is for the life of the loan
Mike_Summey hobbes, I’d not use the credit card no matte how low the rates unless you have a guaranteed way to take out the debt later.
Intromaster (MikeF) that’s the reason I bought the W&E course…too see you
Intromaster (MikeF) I remember you saying in one of the chats that you were on the W&E course
Mike_Summey broadway, I’ve had my property managers in previous chat and if there is enough demand, I’ll arragne to do it again.
Mike_Summey MikeF, that video was shot about 10-15 years ago.
Intromaster (MikeF) really? wow!
Mike_Summey The principles I discussed then apply just as well today.
broadway ok thanks. For me, it would be a help I know. I’m even having a hard time getting them to return calls!! Poor customer service from the start!
Bob (vegas) No Al tonight?
Mike_Summey broadway, have you read the chapter on finding a property manager in our real estate book?
Intromaster (MikeF) the information is still relevant today because I plan to buy and hold anyway
Mike_Summey Bob, Al may have thought I died since I didn’t send out a chat notice.
broadway Yes, I’ve refered back to that a couple of times so far.
Mike_Summey 
Intromaster (MikeF) I’m looking for income not really quick cash (if any) from selling/flipping
santo broadway, my property manager–who is also the real estate broker i buy my houses from, charges me $40 per unit no matter what the rent is—and he does a better job than the last property manager i had that charged me 10%
Mike_Summey MikeF, building a strong income stream comes from buying right and then having patience to let is mature.
Bob (vegas) I think he may be upset with me…
hobbes what’s are some good ways to get cash at closing using conventional loans? I am thinking of using the cash as a 3 month safety net, in case anything happen.
broadway UNBELIEVABLE santo, I’m still interviewing then!
Intromaster (MikeF) yes, i agree. And I really dont care if it cash flows right now because like you said earlier, the tenants will be paying off the mortgage anyway
Mike_Summey 10% seems to be about average for property managers, but as you acquire more properties you can negotiate that down a bit. Just keep in mind that the property managers need to make money too, so don’t try to squeeze them too much.
MarkNC Mike, I ordered the book from your web site. I llok forward to reading it. It is also part of my wife’s Christmas present. She has taken a sudden interest in RE investing.
Mike_Summey Mark, would you like it personalized to her? If so send me an email to mike@weekendmillionaire.com
Intromaster (MikeF) santo - does your property manager deal with properties in Rochester?
MarkNC Thanks, I will.
broadway Mike, I agree. I only have one property so far and working toward my 2nd. I’ve just handled it myself so far. I can do 10% but 6-8% seems fair after collecting rent monthly.
santo mike my property manager handles 78 units now, and he is on top of everything
santo mikeF just buffalo n.y.
Intromaster (MikeF) and you are very satisfied with him? I am looking for someone to manage a property I’m buying in Rochester.
Intromaster (MikeF) ok, thanks santo!
MarkNC broadway, I am up to six units now and looking for a manager. It is starting to take too much of my time.
Roger Dawson Interesting article in the LA Times about loyalty oaths. These are agents who only represent buyers, not sellers, but need the buyer to sign a loyalty oath that they won’t buy from any other realtor, or the buyer will owe this real esate agent a commission.
Intromaster (MikeF) Does the 10% fee include snow removal/basic lawn care?
broadway marknc, I can understand that especially with a full time job. I’ve gotten pretty frustrated trying to just contact some of these, it makes me think I should be in that business. I could clean house with good customer service
hobbes Mike, what are some ways to get cash at closing using conventional loans? I plan on using the cash as a 3 month reserve.
Mike_Summey Mark, you can be an investor or a property manager…not both.
Roger Dawson MikeF: the property manager will get the snow removed but bill you for the work. No work is included in their fee except locating and clearing tenants and collecting the rents.
santo mikeF, call 716-445-2325 vinnie might know someone in rochester
broadway Mike, I know if I had a choice, I’d take the investor every time.
Intromaster (MikeF) Thanks Roger!!!
Mike_Summey hobbes, I don’t know too many way to get cash at closing using conventional financing. It usually takes creative financing. I’ve used a small 1st mortgage from a conventional lender combined with a large second from the seller to accompliah that.
MarkNC I have some friends who have management companies. They mainly manage propoerty they own though so I have shied away from them. The one who is most a mentor to me though recommends self managing until you have about twn propertied. I have decided six is close enough to ten. So Mike, any advice on going with a manager who owns most of what he manages. I think they own about 350-400 of the 600 units they manage.
Mike_Summey Mark, I’d stay away from people who manager their own properties. You can bet they will put the best tenants in their own units.
Intromaster (MikeF) so the background/criminal checks on tenants are included in that 10% or do I have to pay separately?
Mike_Summey MikeF, those are included in the management fee I pay my managers.
Intromaster (MikeF) got it!
Intromaster (MikeF) do you recommend asset protection or basic homeowners insurance?
MarkNC That’s what I have always thought Mike. Unfortunately, the two best management companies here are both run by people who own their properties. Even though they are great friends of mine I just can’t see signing up with them.
Intromaster (MikeF) I just dont want to get sued and lose everything
Intromaster (MikeF) that’s my biggest fear right now..
Mike_Summey MikeF, I require my property managers to carry Errors * Ommissions Insurance along with liability insurance with me as a named insured.
Intromaster (MikeF) so does that mean you are protected if someone tries to sue YOU or the property manager?
broadway mike, can you tell us what amounts of E & O and liability they should have?
Mike_Summey MikeF, I also carry a large umbrella liability policy. The coverage is cheap compared to getting sued.
Roger Dawson Mike, I’ve never been sued and I’ve never sued anyone other than tenants that didn’t pay their rent. Is the risk that great?
hobbes how many properties do you think someone should have before making an LLC?
Mike_Summey broadway, that’s up to you and your comfort level. I employ managers who are suppose to keep up with the landlord/tenants laws and not do things a landlord shouldn’t do. I don’t want to keep up with those things, which is why I use a manager.
Mike_Summey Roger, I don’t think it is. I’ve been at it a long time, as you know, and I’ve never been sued either.
Intromaster (MikeF) no, I just want to cover all areas. I am considered a new investor and these are questions that I have….just like a new mom who has her first child and goes way beyond making sure her newborn is safe. (no, I am not a female)
broadway mike, that makes sense.
Mike_Summey hobbes, personally I don’t think an LLC gives you any better protection than good insurance. I use LLCs for estate planning purposes, not for liability protection.
hobbes mike, curious to know. How is your building project coming along? Is it a first for you?
hobbes just noticed it on the main page
Mike_Summey MikeF, there are speakers who are strong advocates for LLC and other liability protection methods, but in my opinion, ost of them are selling people on certain products using scare tactics. If you do things right the chances of being sued are minimal and can be covered by insurance.
Intromaster (MikeF) do I need to ask for E*O insurance? Do you recommend it for new investors or wait until we have a few properties first?
Mike_Summey hobbes, nothing new to report, but I didn’t expect much for a while.
Intromaster (MikeF) ok, thanks
hobbes mike, i remember you saying you have other properties over 100mi away. What extra steps do you take when overseeing and looking for properties that are not in your immediate area?
Mike_Summey MikeF, ask yourself what is your net worth? That’s what you are protecting with insurance. Even if someone sues you, they can’t get more than you are worth.
santo hobbes, all my properties are 400 miles away
Mike_Summey hobbes, I have a group of properties in Anderson, SC. I visit them a couple of times per year just to be sure the manager is doing a good job. Other than that, I don’t do anything else unless I find a problem on one of my inspections.
Intromaster (MikeF) ok, just dont want a judgement against me for 2 million and wind up destitute trying to pay it all back 
hobbes how often do you conduct those inspections?
hobbes santo, how often do you visit your properties. And how do you find new ones?
Mike_Summey MikeF, don’t be afraid of being sued. YOu’ll only get a judgement against you if someone can prove that you are at fault. Do what’s right and don’t worry too much about it.
Mike_Summey hobbes, I usually visit the properties a couple of times per year.
hobbes ahh I see, so when you go there. Thought you had a company make the inspections. Thanks!
Intromaster (MikeF) anyone finding it even easier to buy properties now since the mortgage lending slowdown and sellers having to hold onto their properties longer?
Intromaster (MikeF) ok, Mike_S, thanks!
Mike_Summey Here’s a prediction!!!!!
santo hobbes, my property manager speaks to me on the phone everyday– i visit twice a year—and i find new houses from my property manager, who is also my real estate broker– he sends me pictures on the internet all the time
Mike_Summey I think there will be more deals over the next 2 years than I have seen in my lifetime.
Intromaster (MikeF) that’s a bold prediction!!
MarkNC Mike, why do you say that?
hobbes thats nice of him santo, does he steer you clear of bad neighborhoods as well?
hobbes hard to tell from pictures whether the the area surrounding it is nice
broadway Mike, were you involved in rentals when prime was 18% back in the early 80’s? If so, how was the market at that time?
hobbes mike, do you prefer single family homes to 2-4 unit homes?
Mike_Summey MikeF, I know, but that’s honestly how I feel. I’ve been through 4 of these real estate cycles and I believe this one will be outstanding for long term investors. Of course, like all predictions, only time will tell for sure.
hobbes even if the cashflow is maybe around $100 difference
santo hobbes, he steers me away bad areas—-and bad houses
Mike_Summey broadway, when the prime hit 21.5% it was a very good time for me. I bought several properties from individuals who financed the purchases and were happy to do so.
santo nie all
hobbes gnight santo
MarkNC Good night Santo
broadway I can see how that would be the case. Of course at that time, there was not a variable rate on mortages so I can see why you would predict what you are over the next 2 years.
Mike_Summey broadway, there were variable rate mortgages at that time. I uses several of them, but there were also mortgages that could be assumed without qualifying.
Mike_Summey I’m going to have to sign out also. I’m very tired tonight.
hobbes thanks for the help Mike
broadway I did not realize variable rates were back then. Maybe they were not where we lived or just not marketed. I was in a very small town then
broadway Thanks Mike
Mike_Summey I hope everyone has a very Merry Christmas and a Happy New Year. I’ll see you back here in the chat on January 7th.
hobbes you too! gnight!
broadway Hope all has a super Xmas and new year too! good nite all
MarkNC Good night all
hobbes night roger, looking forward to readin your new book!
Roger Dawson Merry Christmas everyone!
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