Chat Transcript - January 14, 2008
Posted on January 15, 2008
santo hi Al
Al Lee Hi, santo
santo sorry I missed your show yesterday– took my wife home from the hospital
Al Lee santo, I hope she is OK
santo Al, yes, thank you
Al Lee My father-in-law is in the hospital, too. He may or may not need an operation.
santo Al, just got 100% rental on all my houses
Al Lee santo, You are doing great.
Al Lee I hoep everyone can do as well as you have done in only one year.
Al Lee hope
danko santo, how many houses do you have?
Al Lee santo, be sure to tell when you bought yrou first rent house.
santo Al, this year will show a better profit, because i did not close on half of thwm until oct. nov. 6 houses— 12 units
santo Al, bought my first on jan. 29th of 2007
danko santo, very cool.
Al Lee I wonder where Carleton is. Mike called me an hour ago to be sure I did not forget to be here and tell me that Carleton would be here for sure. He may be having computer troubles, connection down or something
santo Al, looking to buy 3 more 3 family houses this year
Al Lee santo, if I were to bet, I’d bet you DO buy them.
santo Al, thanks for having faith in me
Al Lee santo, how are you financing your purchases?
santo Al, regular bank financing
danko santo, are you just buying at deep discounts then?
santo Al, the 80–20 method
Al Lee santo, what is the term of the loan, interest rate, amortization?
danko santo, are you working with partners?
Al Lee santo, that is 20% down and 80% loans?
santo Al, 30 year fixed– no partners
Al Lee Just like I preach on my radio program: 80/20 with 30-year fixed-rate. Excellent!
jason my problem is getting the 20%
santo Al, interest rate went up and down 7 and a half up to 9%—but they all cash floe
Al Lee jason, you can do OK with 10% down and sometimes wtih nothing down (in certain circumstances); but for a long-term strategy, go with the 80/20 rule
Al Lee santo, the beauty of a fixed-rate loan is that the rate will never go up–but you can refi to lower it if rates drop. Ratchet the rate down!
Al Lee I used to have a lot of 9% and higher loans; but when rates dropped I refinanced them. Often taking cash out, too.
danko santo, do you have a lot of upfront cash for these purchases? If you don’t use partners, you must have something to work with.
Al Lee I think that is a smart use of leverage.
danko or do you use HELOCs for your 20%
santo Al, example—3 family 65,000 price 20% down– mortgage $375 a month at 8%
Al Lee you don’t have taxes and insurance escrowed in, do you?
erskine214 what is your source for the 20 %?
santo Al, rent on that 3 family is $1500
Al Lee santo, Wow! that is a home run.
Al Lee santo, are you using yoru savings to fund the down payments?
santo Al, i pay seperate on taxes and insurance
Al Lee santo, you should set up a separate account to accumulate the money in each month so you have the money when tax time comes
Al Lee , Carleton.
Al Lee Hi
carleton_sheets I have been trying unsucdessfully for 25 minutes to get into the chat room and finally tried my wife’s computer and well…made it!
shane_Ky Thats pretty cheap for a 3 family
santo Al, I started with $50,000 cash that I had in a annuity acct. from my job– that was all of the bosses money i did have contribute
Al Lee I think Carleton can tell those of you who are asking about buying though you have little or no cash how to do it.
carleton_sheets Hello eveyone
jason hello
danko Hi, Carleton
Jeff S Hi, This is my first Chat
Al Lee Carleton, can you buy hosues with no money down?
carleton_sheets Well, welcome Jeff
Jeff S Thank you
oz hello Carleton…
santo Al, you can say my former boss paid for the down payments on my houses
carleton_sheets Al, you and I both know you can. People say it takes money and the truth of the matter is that it sure does….it just doesn’t have to be your money.
Al Lee I am asking on behalf of several of the folks who have been asking santo how he bought. Santo does nave soem cash, but some of the oothers do not
erskine214 santo, were you buying thru a sel-deirected IRA?
Al Lee avoid buying real estate in an IRA unless you can pay all cash and the money is locked into the IRA. You lose a lot of benefits by onwing in an IRA.
Al Lee owning
Al Lee santo, I am still looking forward to coming up to NY and riding in that ‘41
Jeff S I heard that you now need 15-20% down for sure if you are buying a non priority mortgage, is this fairly accurate?
oz Al what about a ROTH IRA for buying ?
santo erskine, the money I had in that annuity acct. was from a employer only contribution fund– in 25 years on the job in was $90,000 i left with– all the bosses money– that was the teamsters union
erskine214 Carleton, what are your thoughts on buying via an IRA?
Al Lee You could buy wth no cash down by using alternative financing: weller financing, personal loans, etc. Some people have even bought houses using cash advances on credit cards–BE CAREFUL OF THAT!
Jeff S Right!! I couldn’t imagine on a credit card
danko We have just arranged a HELOC at 7.49% interest only that we will be using for down pymts. Have to figure in the cost of the HELOC into the NOI. We paid off our 30 yr mortgage in 13 years and now want to use the equity
carleton_sheets Jeff, lending standards as you know have really tightened and there may be lenders who will finance up to 90-100% but stay away from them. even though you amy need 20% down today, I repeat, it still doesn’t have to be your 20%.
shane_Ky I took about 28,00 equity 3yrs ago to buy a 12 plex that I used equity from that property to buy the next and have accumated a lot of units thaht way
Jeff S Thanks Carlton, not having bought anything other than my own house i guess i need to think of other ways of getting that 20%
carleton_sheets Great going, shane!
shane_Ky So far so good
santo Al, like they said in the old ganster movies— I will put you in the backseat and take you for a ride
jason shane, so once you get the first deal, you can take equity from that to fund the next and then repeat?
carleton_sheets Jeff S, that’s what I was confronted with when I lost my job exactly 38 years ago next month. I used partners but there are other ways.
shane_Ky Yes, I now have 352 units
danko shane, you started 3 years ago and have 352 units?
shane_Ky yea
carleton_sheets WOW Shane. Congratulations That make me proud. did you by chance invest in my course?
Jeff S wow, nice
danko brilliant
shane_Ky My mother that had passed away had your course
danko I have your black course, Carleton. I learned a LOT from it.
carleton_sheets Did you study it, Shane?
carleton_sheets Thanks, Danko. I’m glad!
shane_Ky yes
carleton_sheets Where are you in Kentucky, shane?
shane_Ky Eastern Ky
carleton_sheets During college, I worked for Ashland IOil Co. Anywhere near there?
shane_Ky I have not bought nothing since July, It made 3yr in Dec.
jason so how do you use a partner to get a down payment? would they be the first mortgage or some other type of agreement?
santo Carleton what is the dvd that you put out with mike summey on it– i think mike said it was 2 hours long
shane_Ky about 90 minutes from Ashland, my grandfather was from close to there
carleton_sheets Why nothing since July, shane. Is your area feeling the pinch like many areas in the US?
shane_Ky Actualy I am looking at 72 units since Nov.
carleton_sheets Jason, the partner with the down payment would be an equity partner but with a preference on cash flow and a preference at the time of sale.
Jeff S If you are using a partner, is it generally better to have both names on the mortgage or is it better to have one name and then have your own partnership agreement?
carleton_sheets Sanot, I’ve done so many videos with and without Mike, I’m going to have to check. I’ll tell him to get in touch with you and I’ll check on availability.
Al Lee Partners can be a good way to get started; but you can have lots of grief from partners later on.
danko santo, I have the video. It is on the Wealth and Empowerment Training. Video #4
santo danko thank you
carleton_sheets You’re sure right, Al. the stronger and more complete the partnership agreement the better. get a lawyer who know partnerships and find one that knows what he’s doing. As a lesson for everyone of you here, one of the best pieces of advice I ever received was: DON’T PAY TO EDUCATE YOUR LAWYER. Find one that knows what he’s dong.
santo shane, do you have a goal in mind for the future– 500 units or maybe a 1000
Al Lee same for your CPA!
carleton_sheets You are embarrassing me me Danko!
shane_Ky 1200-t0 1500 I hope
carleton_sheets Danko, how many different professional managers do you have. I’m not talking about on-site but supervisory?
danko lol…don’t be embarrassed, Carleton. As I have been looking at properties, your materials have been close at hand. You were my introduction to real estate.
danko I think you meant that question to Santo, Carleton
carleton_sheets Thanks, D.!!!!!
shane_Ky Or untill one million per year income
santo shane, so far you left us all in the dust
carleton_sheets Hello, Pineapple!
danko sorry, I meant to shane
pineapple hello carleton!
pineapple hello everyone
shane_Ky I manage all my properties, so I am in the dust
carleton_sheets Sorry, yes to Shane
pineapple carleton, do you have any advice or tips when buying a small package of 2-4 properties?
danko Shane, how to handle all that? You manage all your properties? Do you sleep?
santo shane, i would be happy with 50 units
shane_Ky 2 or 3
carleton_sheets Pineapple, get neighborhood comps, know the realistilc rent rates for the area, do an iln-depth proforma of the income and expenses and dont hisitate to ask the seller for their tax returns for the properties.
shane_Ky I sleep well, I take care of writing all bills and just make sure everyone is doing thier job
santo carleton, i miss the commercials–if you make another you have to put Shane in it
carleton_sheets Shane, how many on-site proerty managers fo you have? How many seperate apartment complexes?
pineapple it seems as thought I am lost in this conversation regarding Shane, cna someone quickly fill me in?
erskine214 Shane, when you say units do you mean SF units or apt.units?
danko pineapple…Shane has bought 352 units and started 3 years ago
shane_Ky 8 seperate properties around 3 or 4 managers
carleton_sheets Santo, I’m glad you brought that up. It’s been a long ride for the last 24-25 years and effective December 1, 2007, no more commercials. We now offer my course FOR FREE on my website. Go to www.PEIU.com or www.carletonsheets.com
shane_Ky Mostly apartment units,
carleton_sheets Hello and welcome, Trav.
Al Lee Carleton, this is like Johnny Carson retiring.
Trav hey carleton
carleton_sheets LOL, Al.
carleton_sheets Where are you Pineapple?
danko Hey, Al, on the plus side…some of us have collector’s items now.
Al Lee good point.
carleton_sheets Again…LOL Danko
pineapple I live in NJ
carleton_sheets Where in NJ?
shane_Ky Carleton, you probably don’t remember, but 3yrs ago I was on this chat line and asked you a question on raising rents just a few weeks after I purchased
Jeff S Do most of you own rental properties relatively near your residence?
erskine214 yes
Al Lee some near, some far
Jeff S I guess that makes it a lot easier, but if you have a good property manager you could go further away?
santo jeff, all my mine are 400 miles away
Al Lee santo, have you gone up to see your properties?
Jeff S ok, thanks. i was considering a property out west and i live in DE, not sure if that was crazy considering it’s my first i’m looking at.
shane_Ky Most of mine are around 130 miles away
carleton_sheets I remember you saying that on another chat, Santo. You’re in Calif aren’t you?
santo jeff, my property manager is also my broker who i buy them from
Jeff S santo, that sounds convinient
santo carleton , no i’am from n,y,c.
Al Lee Carleton, Santo is in Noo Yawk
carleton_sheets Hello Sparky 37, and welcome!
danko Carleton…what are your thoughts about Real Estate Investor Clubs?
sparky37 hi Carleton, got booted out
santo Al, i went up once to see my houses
Al Lee Jeff, where in DE?
carleton_sheets I think they are great, if they are well managed. Good speakers, good networking, potential buyers and sellers and just plain motivation. I used to have a lot of CASH (the first two letters of my first and last name) around the country but I think most of them have disappeared.
sparky37 Carleton, what part of Fla are you in?
Jeff S I live in Newark
Jeff S You know where that is?
santo Al, don’t really have to go there– my p.m. keeps me up to date on everything on the phone
sparky37 Jeff, Newark Nj?
carleton_sheets Sparky, I live on an island about 45 miles north of Palm Beach on the east coast.
Jeff S No, Newark DE
sparky37 Nice Carleton
Al Lee I have a lifelong friend in Odessa
Al Lee DE
Jeff S Go Blue Hens, Ha. Oh yea Odessa is about 20-30 minutes away
danko are there ANY properties left in FLA?
Al Lee My friends name is Sheats, almost like Sheets, but different
santo Carleton it is always great having you here
Jeff S That’s the first time I’ve heard that name
danko Thanks for coming, Carleton
Al Lee Yes, glad you got your wife’s computer to log in.
carleton_sheets Danko, the pickings are many. What a great time to invest all over the US but mainly in Fla, Southern Calif., Las Vegas etc etc.
sparky37 Carleton, great job hosting tonight! You too Al!
Al Lee Thanks, sparky
Jeff S I guess this ends at 9?
danko Thanks, Al. Great chat
Al Lee BTW, 37 is one of my favorite numbers.
sparky37 Mine too
santo nite all
Al Lee both 3 and 7 are important numbers because they have psycological impact.
Jeff S Thanks everyone
Al Lee goodnight, santo
danko night, all
sparky37 I have been called crazy more then once!
carleton_sheets I just looked at the time and how quickly the time went. You all have been so cordial and motivating. thanks for you comments.
Al Lee Goodnight, Carleton
Al Lee have to run now, too.
sparky37 Nite all
shane_Ky Thanks Carleton, Al and others
rockydidonna I was having a hard time loggin
carleton_sheets Good night all. (I’ll remember that about 3 and 7)
rockydidonna is it over all ready
diane hello
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