Chat Transcript – July 13, 2009
Posted on July 14, 2009
Mark Hello All
trav Where you guys from
Mark Athens, GA
Mark What about you?
trav Asheville, do you have any rentals
Mark Yes, but only one…it’s a 4/3 house.
trav nice
Mark I’ve got a fire damaged house (through the roof) that I’m trying to fix up.
Mark That’s going to be one of my questions tonight.
trav right, good idea
Mark Hey Mike.
trav Hey Mike
Mike_Summey Hi everyone
sj hey mike
Mike_Summey Looks like you beat me here.
trav I’ve been looking forward to this
Mike_Summey trav, glad to have you. Where are you from?
trav Asheville
Mike_Summey Great
Mike_Summey How about you sj?
Mike_Summey Roger will be joining us shortly.
sj Monroe, Louisiana
Mike_Summey sj, great place.
Mike_Summey Hi eric
ericbonner hello
Mike_Summey Anyone bought anything since the last chat?
sj Been Here before?
ericbonner nope
Mike_Summey sj, yes several times, but not in the past few years.
trav Hey Mike, I’ve new to this and I’ve read the past chats and seen where your boys have bought rents, i was wondering what they did about the down payment,
Mike_Summey Which Mark do we have tonight?
Mike_Summey Hi madmike
sj Love to have you for a speaking engagement!!!!!
madmike hi, made it this week
Mark Mike, (Mark in Athens, GA here) I’m self employed with an 800+ credit score and not a lot of assets. We’re trying to build those!! But, I can’t seem to get financing for a house that I got (literally) as a fire sale…fire burned through roof, and I got it for the price of the land. However, banks don’t seem to want to touch anything that is investment…any suggestions??? Help! It’s just sitting there not producing any income, and has really good potential.
Mark Need money for repairs.
Mike_Summey sj, I’m not doing a lot of speaking right now. The market is so good for buying that I’m spending most of my time doing what I talk about….Much more lucrative! 
Mike_Summey mark, about the only way you will be able to get financing is to repair the house and get a renter in it. Then you shouldn’t have any problem.
Mike_Summey Mark, I realize that might be sort of a catch 22, but that’s how it works in today’s climate.
Mike_Summey Mark, do you have anyone that would loan you money to repair the house and then pay them back when you get it financed?
Mike_Summey Hi free
Mark I haven’t had any luck with that either. I’ve already got another house that I don’t owe anything on. Has a renter (1 1/2 year lease). Wanted to finance and use equity for repairs on other house, but they want to give me 50%-60% LTV…not enough.
ericbonner Eric, (from Raleigh NC) new to real estate, read you book and figured i would sit back and listen.
Mike_Summey Theeeere”s ROger
Roger Dawson Hi everyone. Sorry that I’m late.
Mark As far as loans from family, they are all tapped out because of the collapse of the stock market.
trav Hey Roger
sj hey Roger
Mark How do I find private money sources?
Mike_Summey eric, just jump in anytime. We’re all friends here and the purpose of the chat is to help our readers.
ericbonner ok
free2choose Thanks for keeping me on the list. Good to check in. Will listen for a while, then I have a question or two.
Mike_Summey Mark, you should be able to find a bank that would loan you at least 70% of the appraised value on the house you own free and clear.
trav Mike, I’m new to this, I don’t have cash for a down payment I do have great credit, I know its time to buy, I was wondering what the best way to buy a property is without any money down.
Mark Mike, you would think, but there’s the rub. The combination of few assets and self employment seem to outweigh a good credit score.
Mike_Summey Mark, anyone with money in bank CDs is a good prospect for private financing. You could secure the loan with a first mortgage and pay them sever times what the banks are paying and it would be good for both of you.
free2choose same situation as trav
Mark Mike, hmmm, that sounds like an idea. Any suggestions on how to locate those people?
Mark Any organizations that put people together like that?
madmike Mark I have the same problem, being self employed makes it nearly impossible to get loans. I have tried to refinance my own house and have a good credit score. My company is even incorporated, but the bank considers all my company debts as my debts because of the personal guaranty. So they don’t want to do it.
Roger Dawson The first person I would talk to for financing would be your CPA or tax preparer. They know lots of people who have money.
ericbonner what do you think about putting a property in your own name rather than my LLC, because i cant qualify for commercial loan but I can get one from residrntual lender.
Roger Dawson Hi Penny!
madmike Roger, I like that idea of talking to a CPA, I never thought about that.
Penny Hi Roger and everyone.
Mike_Summey trav, people have been sold a bill of goods about no money down purchases. They are very hard to find and when you do find one it is usually a problem property that the seller is willing to sell for no money down because it is eating him up in costs. We call those alligators. Several people have made a fortune selling no money down programs, in nearly 40 years I’ve not seen that many deals except for people who have money. If can buy for cash and then finance later, you can make no money down deals , but that about the only way to do it consistently and then you have to buy very cheap.
Mike_Summey Hi Penny.
sj Let’s put Roger to work, please tell me how to compute a blended interest rate when one rate is 8% and the other is 4.64% like the example in your book on page 160.
Mark Roger, sounds good. Sometimes the most obvious answers, aren’t.
Mike_Summey Hi Lon
Lon Hey, Mike, Roger!
Roger Dawson Eric, putting the property in your name is fine, but only apply for an ower occupied loan if you are really going to live there.
trav Mike/Roger get enough hard money to buy the property, then refinance it
Roger Dawson Hi Lon!
Mike_Summey Another good way to find private financing is through a good estate planning attorney. They are working every day with people who have money.
Roger Dawson SJ I don’t know nothing about math. But Mike will answer for you.
Mike_Summey eric, how many loans do you have in your name now?
ericbonner one
trav Mike can you tell me how your boys done about buying there properties
ericbonner the one I live in.
Mark Trav, is “hard money” the same as private financing?
trav Thank you
Mike_Summey eric, you can get up to 4 conventional loans before you have to turn to portfolio loans.
trav I’m new to this
trav Mark not sure
ericbonner how would I protect myself from lawsuit? Insurance policy?
Mike_Summey trav, you have to be very careful if you use hard money lenders. Most of them want very high interest rates and a quick out. If you get stuck with a property and can’t get it financed quickly they can be a real pain.
Mike_Summey Hi Bob
BobCarr Hi Everyone
Lon With the new lending rules, it’s can be difficult to re-fi out of a hard money loan in 30 – 90 days.
madmike Mike or Roger, do you have any suggestions on contacting a person on a house I have spotted. The house is exactly what you talk about in your books. It is overgrown and has been vacant for a while. The homeowner lives out of state. I have gotten the address and phone number. Should I send a letter and then call. OR just pick up the phone and call.
trav So, should I go and get preapproved for a loan
Roger Dawson I think of private financing as getting the seller to carry back financing and hard money as getting it from a third party, usually a loan broker doing it for investors. Count your fingers after you shake hands with a hard money lender to be sure that they are still all there.
Mike_Summey One thing I want everyone to understand…building wealth with real estate takes time. It’s not the get-rich-quick proposition so many gurus make it out to be. Wealth builds as values go up, mortgages pay down and cashflow improves. All the other ways are just speculations that can get you burned when the market turns down as many are now finding out.
trav Mike, I need to figure out how to get my first property so I can start doing that
Roger Dawson I’d give them a call just to see how badly they want to sell.
Mike_Summey sj, on the blended rate question, take the payment at 8% and the payment at 4.6% and add them together. Then calculate the interest rate this total payment would be to amortize the total outstanding balance. Of course, that assums both loans are for the same number of months.
trav Should I start off with a moblie home and get some cash flow going
Penny Hi Bob Carr!
Roger Dawson Mike: Assums. Is that some southen food like chitlings?
sj That’s why you’re da king!
Mike_Summey madmike, Roger is right. Give them a call and find out as much as you can about their situation. They could have inherited the property and don’t want it any longer.
BobCarr Hi Penny … u good?
Mike_Summey Roger, that’s a sign that I’m thinking faster than my fingers can type!!!
madmike Roger and MIke, I have a copy of the tax card and know that have very little. I will give them a call and see what is what. Maybe I can help them and get a good deal. thanks
Penny trying to keep it in the middle of the road these days. Hope you are well.
madmike I meant to say very little invested in the property.
BobCarr As long as U are on the road .. that’s all that counts!
Penny You bet, even if its in a traffic jam right?
BobCarr Mike … anything new that you are seeing … trends??
Mike_Summey madmike, if you don’t have much cash, you might try a technique I’ve used successfully. Get a bank loan for 20-30% of the purchase and ask the seller to carry the balance at terms that will make the purchase work as an investment. It might mean getting a very favorable interest rate or even no interest from the sellers.
madmike MIke, when I make the call, I will introduce myself as a real estate investor. But then how should I ask the questions. Are you interested in selling? How did you acquire the property. etc.
BobCarr We will get thru it … just hold on!
Mike_Summey Bob, I think the market is going to continue to be very soft, maybe even get worse for the next year or longer. We are in uncharted territory as far as getting good deals goes. I’ve never see it like this in my lifetime.
trav Mike/Roger if I could find a great deal like Mike like the one in tonight chat reminder, would the bank finace it at 100%
madmike trav, I have a couple of mobile homes, they can be great for cash flow. But remember they don’t appreciate and don’t last anywhere near as long as a house. Just make sure you get a good deal.
BobCarr I’m still seeing them up here .. just wondering .. taking me longer to rent them it seems.
trav Thanks madmike maybe offer 50 cents on the dollar?
Mike_Summey madmike, I’d let them know that you saw the property and it didn’t appear anyone was living in it. Let them know about the conditions. Ask if they have any plans for it. Find out as much as you can before you even mention you are interested in buying. As far as they are concerned, you could be a neighbor whose concern is for the community.
Mark Trav, that’s the problem I’ve been having…getting ANY financing on properties that I already own with no debt on them. The banks in my area don’t want to do what they call “Cash Out” loans.
Mark I don’t mind moving “slowly,” but no movement frustrates me.
Mike_Summey Mark, are the banks you’ve been talking with the large banks or small local banks?
trav Ya i hear ya Mark, I’m trying to get over the hump on my first property
ericbonner me too trav
Mark Mike, 3 types…national, regional and local.
Mark It’s always two years of tax returns, we’ll give you 70% max and ooohh, you’re self employed…not sure we can help you.
free2choose Anybody: I am heavily in debt due to a rehab (which I had discovered Mike and Roger’s books prior). Monthly payments are eating me alive. If I work extra and paydown debt this month, the monthly payments don’t change, and I am still at redline. So…I need to generate cash to pay down debt, or cashflow to cover the payments. doesn’t matter which. Can I solve these problems with your strategies if I don’t already have cash? Or, is something else more appropriate?
free2choose Meant “wish I had discovered…”
BobCarr Mark … I think that go to school and practice that line!
Mike_Summey mark & trav, I feel your pain. When I started I struggled for a year before I bought my first property. Like anything else, getting started is the hardest part. Unfortunately, most people hit a few obstacles and give up rather than continuing to stick with it until they see success. Learn to view real estate investing as a game that doesn’t end until you win.
Mark The banks really just seem to want plain vanilla loans. You’re employed at somebody elses company, great credit and YOU want to live in the house. Investors need not apply.
trav Mike right but I need to get off the starting blocks, what the best way to do that?
Mike_Summey free, unfortunately you are one of the millions who got caught in the fix-up and flip fiasco. You may just have to take you licks and start over doing things that aren’t speculating.
Mark Oh, I actually had a banker tell my wife and I that we were the “exact kind of people we need to get this economy turned around, hard working, entrepreneural, willing to take a risk…sorry I can’t help you.” Ha! Ha!
Mark Okay, so not to be too negative everybody. We don’t plan on quitting…just looking for answers to this latest road block. Thanks for the good ideas. I’ve already sent an email to my CPA about potential investors. Gotta run…. Good luck everyone…see you next time.
Mike_Summey mark, the 70% max doesn’t bother me becasue if I can’t buy for 70% of appraised value or less, I don’t need to own the property. If you’re going to invest in real estate you have to buy wholesale.
ericbonner Mike/Rodger what do you think of buying from wholesalers
Mark Mike, I mis-typed. It’s more like 50%-60%. See you later.
Roger Dawson Eric, what do you mean by wholesalers?
Mark And, thanks again.
ericbonner other investors
Mike_Summey trav, start making offers that will work for you. Don’t worry if you get turned down 10-20-30 times. I make anywhere from 20 to 50 offers every month. Sometimes I’ll only get one or two accepted. Other times it might be 3-5. The bottom line is that I get turned down many many more time than my offers are accepted, but when one is accepted I know it will make money for me the rest of my life.
trav Mike or Roger if i buy the offer generator and real estate investing cd’s will that teach me some solid ways to buy my first investment property?
free2choose Definately agree with that. I do have a really good rental, and that’s ultimately what I want to do. I still have really good credit, and don’t want to sacrifice that with a bankruptcy, but realistically, not really sure how to get out from under this. Already working 7 days. If I could sell this thing, the picture would change a lot. Is it even sensible to pursue rentals (supposing I could land one) given my situation?
trav Mike I don’t care about rejects, just don’t want to get burned:D
Roger Dawson Trav: Yes, it will. We’re proud of the fact that it’s not a get rich quick program. It’s solid real estate investing advice.
Mike_Summey eric, there’s nothing wrong with buying from wholesalers if you can still buy at wholesale. The problem is, they go do the work to find a wholesale deal and then want to retail it to you. You have to be careful. Personally, I’d rather find the people the wholesalers buy from and make my deals with them.
Roger Dawson Hi Kevin
trav Roger thanks
kevin Hi Roger
trav Mike where near the asheville area is the market ripe for the picking
madmike trav, I have listenend to the cd’s several times, lots and lots of great information.
Mike_Summey trav, the Offer Generator is the best tool an investor can own…bar none. I use it every day. The CD program will teach you how to invest, the Offer Generator will let you use what you learn to make the offers quickly and efficiently. Also, the inspection form that is a FREE download on the website is a great tool. I use it on every home I inspect.
Mike_Summey Hi kevin & justin
kevin Hey Mike
trav Mike thats another question i have, the inspection form is that your finally inspection, or do you get somebody else to like look for termites,mold etc…
Mike_Summey trav, Asheville is still several months away from coming to reality. In each of these downturns, Asheville goes in about a year behind the country and doesn’t usually bottom until well after the rest of the country is well on its way out.
Mike_Summey Hi chessman
Mike_Summey trav, I use the inspection form to evaluate the prospective properties. I always get termite inspections from a licensed inspector.
Mike_Summey Hi sparky
trav Thanks
sparky37 Hi Mike & Roger
Mike_Summey trav, there are some great buy just off the mountain in Greenville, SC.
trav Awesome, Thanks
sparky37 Mike, I know I am late to the chat but I have a question. I am thinking of moving the family to the Carolinas is there a particular place you recommend?
trav I need to get to og and start playing around with it
Mike_Summey trav, houses that people in Asheville are asking $200,000 for can be bought in Greenville for well under $100,000. The rents will be about the same in both markets.
trav Thanks I thought Asheville was overpriced
Mike_Summey trav, it is very simple to use. Everywhere you have to make an entry, you can place the cursor on the label and help will pop us telling you what to enter and why. Some of the rest of you who have the OG tell trav how simple it is to use.
kevin Guys, I’m so frustrated now with the excellent deals out there (i.e. $30-40K HUD/REO homes) and not having enough cash on hand to justify more purchases. I know there are subject-tos, owner financing, and so on but no real way to do traditional financing on HUDs/REOs…That I know of. Of course people like Dean Graziosi [have you seen his latest infomercial 
] say that you *still* dont’ have to put money down to buy these deals. I’m like a caged animal seeing these deals come and go and not being able to capitalize on them. Any suggestions?
Mike_Summey sparky, if you are looking for the best markets in which to invest, you may want to look at Upstate South Carolina.
sparky37 Mike, invest and live, need good schools and nice community
trav ya i need to figure out what i should put in for stuff like vacancy,maintenance, etc…
Roger Dawson In California the low priced (100K to 200K) is really heating up with multiple offers. Higher priced properties are still a slow market.
justin any thoughts on houston, tx
Mike_Summey sparky, I’d suggest you take time to visit several markets. Check on real estate prices. Inquire about the other things that are important to you.
justin i dont think the prices here have fluctuated much
sparky37 Thanks Mike
Mike_Summey kevin, I don’t know Dean Graziosi, but I do know some of the other real estate gurus who paint unbelievably rosy pictures. I’ve asked several to show me their financial statements, but not one has taken me up on my offer.
Mike_Summey trav, we discuss all of those issues in both our books and CD program. The OG prompts you for all of these entries and the pop up help gives you some suggestions.
trav Great, I’m going to get it by the end of the month, does it talk about the method you described earlier to buy properties,for somebody that dosn’t have a lot of cash?
Mike_Summey Kevin, the biggest difference between me and most of the other real estate gurus is that I don’t have time to get on TV and do seminars in order to sell books and tapes. I’m too busy doing what I write about and it’s much more profitable in the long run. Unlike those who come and go to the real estate scene, I’ve been doing the same thing for almost 40 years and have never had a down year. Last year was my best ever and this year is ahead of last year.
kevin Thanks Mike – I was being sarcastic about Dean et. al. Any thoughts on financing for my situation?
ericbonner would you recomend learning on your own or following a mentor?
Mike_Summey It takes time for real estate investments to mature and start kicking off good cash flows. For the first 20 years I was investing, Roger thought I was broke. He’d even offer to take me out for dinner because he felt sorry for me. Thanks Roger!!
Mike_Summey kevin, if you don’t have much cash, your best bet during these times is probably going to make offer that require owner financing. You’ll get turned down a lot and your biggest challenge will be selling yourself.
Roger Dawson My pleasure Mike! You may reciprocate any time!
sj Now you own Roger, is that what you’re saying Mike?
trav Mike, what banks would you suggest for me to start developing relationships with?
kevin ericbonner: I’ve learned on my own (via Mike and Roger’s book) and a couple of other seminars. If you immerse yourself in this for a good year and learn as you invest you can do fine.
Mike_Summey sj, no I didn’t say that, but I can afford to buy my own dinner now.
ericbonner thanks
Roger Dawson I need to leave you now. Good investing! See you next month.
kevin Owner financing doesn’t work too well with HUDs at least…not sure about REOs.
BobCarr someone say dinner?
Penny goodnight all
Mike_Summey eric, the information in our books and CDs is all you need if you apply yourself. We don’t just give you enough information to whet your appetite and then try to sell you an expensive boot camp or coaching program. Everything you need is in the books and CDs if you will devote yourself to learning. You won’t become an expert overnight, but neither did I.
Mike_Summey Wow, this hour has folwn by. I hope I’ve been able to answer your questions, and please join us again next month. The chat will be on August 3rd.
Mike_Summey Goodnight all.
Mike_Summey See you here next month.
trav Thanks Mike
sj Thanks Mike
sparky37 Nite Mike
free2choose Thanks Mike.
trav Goodnight
madmike Good night everyone. lots of great information
justin summey
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