Chat Transcript - October 6, 2008
Posted on October 7, 2008
santo hi, mike and roger
Roger Dawson Hi Santo
Mike_Summey Looks like we’re early.
Roger Dawson Maybe everyone else in America is out getting drunk
Mike_Summey Or crying in their beer.
Mike_Summey The stock market doesn’t seem to like the $700 B bailout.
santo why, Mcain did not win yet
santo mike, that article says Obama had a bit to do with the mortgage mess–the acorn group is what i am speaking of
Mike_Summey Roger, I bought a new navigation instrument for the plane today.
Mike_Summey Santo, have you read The Obama Nation?
Mike_Summey Hi Joe
Roger Dawson I’ve been talking these past few days to my Icelandic seminar promoter about doing a seminar there later this month. Their Kronur has gone from 50 to the dollar to 150 to the dollar in the last nine months. They are in financial chaos.
Joe Hi Mike
santo mike, not yet
Mike_Summey Roger, I talked with a friend in Germany today and she said the Euro is losing ground against the dollar.
Roger Dawson Mike, what will your navigation instrument do for you?
Joe Mike i bought your weekend millionaire mindset book and it was very helpful
Mike_Summey Roger, everything!
Roger Dawson That you couldn’t do before, I meant.
Mike_Summey Tnanks Joe. Glad you like it. Do you have the other Weekend Millionaire books?
Joe No not yet
Joe i’m workin on it
Joe lol
Roger Dawson Welcome krspack
santo mike, not many people here tonight, they must be out campaining for McCain
Roger Dawson Is there a baseball game tonight?
Mike_Summey Roger, with it I can get complete real time weather while flying. Winds aloft, terminal information for any airport, forecasts, instrument procedures that actually show the plane flying them both horizontally and vertically plus much much more.
krspack1 thanks!
Mike_Summey Hi krspack
krspack1 Mike / Roger, do you have any furnished homes as rentals?
santo mike, like a gps for the plane
Mike_Summey Obama is in Asheville right now. My son has been providing security for him all day.
Roger Dawson Wow Mike, you’ll have to bring it out here to play some golf. Weather’s nice here in the fall.
Mike_Summey I saw him at the golf course yesterday.
Mike_Summey He is here practicing for tomorrow’s dabate.
Mike_Summey Hi john
Roger Dawson Mike, Jason is protecting Obama. Isn’t that like letting the foxes protect the chicken coup?
krspack1 If so, how successful have you been with them and what is the typical percentage markup over unfurnished rentals
Mike_Summey santo, it includes gps also.
johnc1211 Hello
santo mike, sarah palin was in Asheville the other day
Roger Dawson Mike is NC a toss up state?
Mike_Summey santo, no she was not here. She is in Florida.
Joe anybody here invest with self directed ira’s
Mike_Summey Roger, NC hasn’t voted for a Democratic presidential candidate since Carter.
Mike_Summey Hi Bob
Bob Carr Hi Mike
santo mike, NC has only smart voters
Mike_Summey Joe, we had Jim Hitt who specializes in self-directed IRAs as a gust last year. The transcript from that chat is in the chat archives.
Mike_Summey Hi Jack
Joe Cool i’ll have to check it out.I just opend one this yr
Bob Carr Mike … What is a way to get around the old “you have more than 4 property’s” that I keep running into with the banks
Mike_Summey Joe, I spoke with someone this morning who has one and he said it is the only investment he has that has not lost money in the past few weeks.
johnc1211 what’s a self directed IRA?
johnc1211 I can ditto that, Mike. (My real estate that is.)
Joe that is absolutly right no money lost here either.I’m just learning to invest it in real estate and i think i’m gonna start with lease options
Mike_Summey Bob, you can’t. Once you run into that problem, you have to use portfolio bank financing. Those loans are rarely for more than 5 years with balloon payments due at the end. You can get payments based on 15-30 year amortizations and if you make the payments timely you shouldn’t have problems renewing for another 5 years, etc.
santo i[b]
Roger Dawson Krspack: we don’t recomment furnished rentals. The type of tenant you’ll get is far more transient. People who have to move their own furniture into your rental will think twice about moving when you raise their rent.
Roger Dawson Hi Penny!
Mike_Summey john, a self directed IRA is one in which you can hold real estate. That’s about as much as I know about them. Go back in the chat transcripts and find the one with Jim Hitt. You can learn a lot more from reading it.
Mike_Summey Hi Penny
Penny Hi Roger and Mike!
johnc1211 Thanks, Mike. Sounds good.
Bob Carr Mike…Okay…I have been buying them cash,fixing them up and getting loans for 80% which keeps me moving with nothing out of pocket..but the last three this monthj has been a struggle with the banks
Mike_Summey Roger, Jason wasn’t happy about his duty today.
Bob Carr Hello Nurse Penny!
Penny Hello pilot Bob!
Mike_Summey Bob, you can do the same thing with the type loans I’m talking about. That’s all I’ve been using for over 30 years.
Mike_Summey Bob, I’ve bought several properties for cash, gotten them rented and then obtained financing. Many times I have gotten over 100% financing and the properties still cash flow. Buying for cash is a good way to buy for 50-70% of appraised values.
Mike_Summey I wonder where everyone is tonight.
Mike_Summey Hi cjflaherty
santo mike, ballgame on t.v.
cjflaherty hello all
Joe hello
santo mike, O.J. Simpson could get that life sentence he deserves!
krspack1 Thanks Roger. Do you ever make exceptions to that rule. We are looking at increasing a rental from $1800 mo to $2500 mo. furnished. 1800 mo is in a competitive market and was wondering by furnishing if we would have a lower vacancy rate
Joe he will probably get only 5 yrs
santo joe, don’t think so
Joe you may be right
Roger Dawson Mike, what do you think about Krspack’s question. I think he’d have a higher vacancy rate.
santo joe, on the 12 charges, if the judge goes easy on him on every charge, the least time would be 15 years
Mike_Summey krspack, I wouldn’t recommend furnishing a property in that price range. About the only furnished units taht are successful are efficiency apartments that companies can rent for workers on short term projects. Furnished efficiencies can be rented 3-6 months at a time for much less that a motel room.
Mike_Summey Hi Tom
Joe wow i didnt realize that
Mike_Summey Our former sheriff was sentenced to 15 years in federal prison today for his role in gambling corruption while in office.
Tom K Hi
santo mike, for shame on your sheiff !
Mike_Summey santo, the judge has the option to let the sentences on each charge run concurrent with others. That’s how he could get less time.
santo mike, the judge also has the option of doubling the time no each charge
Mike_Summey My son Matt is inspecting a 4 unit building this week. He wants to buy another property before year end.
santo mike, this lady judge is a hard nose
Mike_Summey Has anyone applied for a loan in the last few days?
Joe Is anybody finding it hard to get a loan from a bank for investing or are you using private money to fund your deals
cjflaherty I have not, but other people I know are being turned down
santo mike, i hear you have to have at least a 700 score
Bob Carr Mike … You saying keeping buying cash, get the bank fin and keep rolling…
Tom K I was preapproved at 10%, the bank called back and said it must now be 20% because no one will insure at 10
Mike_Summey Everyone, the days of easy credit we saw 2-4 years ago are gone for the rest of our lives. The old saying, “Once burned, twice learned” is very much in play today.
Roger Dawson A friend of mine is a builder. He told me over the weekend that home buyers are back to 20% down, a good credit rating, and no more than 30% of their income going to the mortgage. That excludes a whole lot of homebuyers.
santo mike, cash will be king from now on
Mike_Summey Unfortunately, many people are learning that home ownership is not for everyone.
Tom K are refi’s any easier
cjflaherty I think owner financing and private lenders are the way to go for now and into the future
johnc1211 Is the 30% take home or gross income?
Mike_Summey Tom, refi’s that you want to pull money from are difficult. If you can buy for cash and then obtain financing later, that type financing is much easier to get.
Joe Personally Mike I belive that people have to look farther than their nose and know more finances before they even think about getting a home
Roger Dawson John, Santo can probably answer that but I think it’s take home.
Mike_Summey Joe, you are correct. I’ve been writing quite a bit about the failure of our school systems to teach personal financial literacy.
johnc1211 Joe, it’s not out there, though. I am financially responsible, and I pay attention to this stuff, but even so, personal finance/budget info is hard to find.
Mike_Summey If the general population understood personal financial literacy, we may have avoided the current problems. Anyone with half a brain could see that we were heading for disaster.
Tom K Mike, I was thinking of paying cash, then turn around and cash back out with a refi.
Mike_Summey Joe, read Weekend Millionaire Mindset. There’s a lot of good information about money management in it.
Joe your right but i believe it starts from home,but you can teach anyone anything it take personal responsibility in order to put practices to work
johnc1211 Agreed Mike. But if the consumer is not financially literate, and the banker stands to make $ selling loans, that’s a recipe for problems.
Joe I read it twice Mike and recommend it anyone
Mike_Summey Tom, right now, if you are in a position where you can do that you can get some super deals.
Penny Gotta head out early tonight. See you all next week.
Roger Dawson Bye Penny
Mike_Summey Goodnight Penny
santo mike, how does this sound, a 4 plex rehab for $10,000—$15,000 rehab cost, sell for $80,000 or $70,000—take that profit, buy two more, keep one, sell one–all cash no mortgage–that would make me a investor/speculator
Mike_Summey Joe, there are a lot of articles on the subject on this website. Look at the archives of the Tips for Financial Success articles.
Tom K It seems like it, but my concern is how will the banker feel about this round about way of getting a loan. Do you think they veiw it differently then if I just walk in with and ask to borrow with 10-20% sown. It seems like the same thing to me.
Joe I will Mike thanks
Mike_Summey Tom, the banks can make a new loan on a property you own free and clear without having to know what you paid for it. You will still only be able to borrow 80% of appraised value, but buying for cash you can often make a purchase for 50-70% of appraised value.
Mike_Summey Hi Sandy
Sandy Hello
santo mike, did you miss my question
Mike_Summey I’m going to try to get a representative from Experion, the credit reporting people to join us in a future chat to discuss how the current situation is affecting people’s credit.
Mike_Summey santo, I must have. What did you ask?
Tom K So clue me in on appriasals - are they just going to come up with what you need?
santo mike scroll back a little you will see it
Mike_Summey Tom, don’t tell them what you need. Tell the bank you want to borrow 80% of appraised value, get their commitment to do this and then get the appraisal. If you bought right, you will be okay.
Mike_Summey santo, any time you have to sell a property to make a profit, you are a speculator, not an investor.
Mike_Summey santo, that doesn’t meak speculating is bad, it just means it is speculating.
Mike_Summey mean
Mike_Summey Welcome back Jack
santo mike, at my age, I have to do this
Roger Dawson Santos, don’t forget to figure in the short term capital gains taxes that you will incur doing that.
Mike_Summey santo, as long as you know what you are doing is speculating and can feel comfortable with the risk, go ahead and do it.
santo mike, what i don’t sell i collect rents with no mortgage
Mike_Summey santo, that definately reduces the risk.
santo rogerif you use the profits for more buys– does that not wipe out the capital gains tax
Joe santo only if you do it in a 1031b exchange
Mike_Summey santo, that would require a 1031 exchange and there are very strick rules that have to be met.
Mike_Summey strict
santo mike, but if i spend the $50,000 profit on more buys within the year, how about that
Mike_Summey Santo, even if you can successfully complete a 1031 exchange, you only defer taxes not eliminate them. Also the value of the new property for depreciation purposes is reduced by the basis you have in the property you exchange.
Tom K There are a number outfiits that will help with a 1031, Wells Fargo for example. What’s you thought on getting a thrid party to assist
Mike_Summey Tom, I believe a 1031 requires a third part to handle the transaction.
Roger Dawson Good night everyone. See you next week.
WNCJack Hi I’m back. Had to install Java u pdate
WNCJack Just in time!
Mike_Summey I’m going to have to sign off too. See you all here next week.
santo nite all
Joe Bye Mike
Joe Goodnight everybody
Tom K Oh, now I know. What is it they do, hold the money?
alphonzawill hello everyone
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