Chat Transcript – October 5, 2009
Posted on October 6, 2009
Mike_Summey Hi qmonty
gmonty1 Hi Mike
Mike_Summey Hi Hawkeye
hawkeye775 Good evening
gmonty1 hello
Mike_Summey Looks like we’re a bit early.
Mike_Summey Anything special on your mind before we get too crowded?
gmonty1 this is my first chat session
gmonty1 working on my 1st real estate foreclosure deal
hawkeye775 Fixing to buy my third investment house
Mike_Summey gmonty, we’re all friends here. There are no dumb questions, only people who stay dumb because they are afraid to ask.
gmonty1 submitted my offer…the bank countered
hawkeye775 closing in two weeks
Mike_Summey Great Hawkeye
Mike_Summey Hi redsox
gmonty1 but added that it would start charging me $50 a day past negotiations
Mike_Summey gmonty, how far apart are you?
gmonty1 is that normal
redsox9 Evening, Mike
gmonty1 about 9k
gmonty1 hey Tasha
Mike_Summey gmonty, it is not unusual for banks to want to charge a daily fee if you fail to close on the agreed upon time, but I’ve never seen one want a charge while you are negotiating.
Mike_Summey Hi tasha
Mike_Summey gmonty, how did you come up with your offer price?
gmonty1 no, they said the charge would come after the close date
Mike_Summey gmonty, that is not unusual. they want out and don’t want you extending the closing date. I’ve seen that several times.
gmonty1 hmm, I see.
hawkeye775 Hi Roger
Roger Dawson Hi Everyone!
Mike_Summey I closed on 7 properties last week. All offers were prepared using our Offer Generator program.
Mike_Summey Hi Roger & Lew
gmonty1 Hi Roger
tasha hi
Mike_Summey tasha, is this your first chat?
gmonty1 how do you factor in repairs…if there are any?
tasha yes
hawkeye775 Mike, do you know of any local banks that would be good to start a relationship with? I need sources for loans, I’ve used up my conventional loan quota.
Mike_Summey tasha, don’t be afraid to jump in at any time. Like I said to gmonty earlier, we’re all friends here. There are no dumb questions, only people who stay dumb because they are afraid to ask
gmonty1 i’m new too Tasha
Mike_Summey Hi Deb
Roger Dawson Hi Deb
Deb hello everyone
gmonty1 hi deb
tasha my main question is regarding incorporating . isnt it beneficial for most ppl, espcially high income individiuals, to incrop their real estate comp or are there some tax benefits to have it come out individual income
Mike_Summey hawkeye, visit the smaller local banks. Interview several of them. Right now they are the ones who are doing business. The large banks are still having problems and don’t have much interest in talking to real estate investors.
Roger Dawson Mike, with those 7 closings did you notice a trend? Are sale prices firming up or are sellers still eager to sell?
hawkeye775 like Asheville Savings Bank or Blue Ridge?
Deb do you know if b of a is lending?
Mike_Summey tasha, I think an LLC might be more favorable than a corporation.
tasha yes, i agree. when i say incorp i meant generally. but i didnt know if there was a benfit of not incorp
Mike_Summey hawkeye, yes! There are also several others. Mountain Bank is one.
Deb hawkeye: from what i have heard blue ridge is not lending at all. they are almost out of business
hawkeye775 I was looking at their checking account anyway, 5%:)
Mike_Summey Deb, do you mean Bank of Asheville or Bank of America?
Deb bank of america
gmonty1 how long should you wait before attempting to pull the equity out of a property
hawkeye775 Is anybody doing equity lines/ refinancing on investment property these days?
Mike_Summey Roger, all 7 of last week’s closings were with individuals, not foreclosures. Several of them were offers I made as far back as April, but the sellers are just now willing to accept what I offerred.
lew mike is that so unusual
Deb Mike does mountain bank lend in SC
Mike_Summey Deb, I doubt you will find it worth your time to approach Bank of America. They are having problems.
hawkeye775 Mike, are any of those properties in Asheville, or still in the GSP area?
hawkeye775 I talked to BB&T today. They sounded like they might be willing to invest in some properties on the retail side.
Roger Dawson Here in California investors are snapping up the low price homes. They might be listed for $120,000, which is half of what they sold for three years ago, and will sell for $160K all cash.
Deb Roger do you have any suggestions on finding private lenders?
Mike_Summey lew, it’s not unusual at all. I’ve bought many properties where my original offers were flatly rejected only to have the sellers come back later asking if the offer is still good.
Mike_Summey Hi scms
Mike_Summey Deb, where in SC
Deb mostly Greenville, Spartanburg. The upstate. I thought they were only a NC bank
Roger Dawson Deb, I would talk to your CPA or tax preparer. They know lots of people who have cash and want a good return on their money.
gmonty1 Is there a minimum suggested wait time before attempting to pull the equity out of a property?
Mike_Summey hawkeye, I’ve found BB&T to be very steady throughout good times and bad. The only negative I find with them is they are a bit pricier than some other banks.
lew mike what of houses did you buy? where they all single family?
Mike_Summey Good point Roger. There are many people looking for better returns than the banks are paying right now.
tasha i am currently renting, will banks even be willing to neg with me ? ‘(i just signed a lease)
hawkeye775 Roger or Mike, on a different note, what real estate books (other than Mike’s, I think I’ve read all of them, all excellent btw) would you recommend? Or business in general?
Mike_Summey Deb, you might talk to Grand South Bank in Greenville. Smaller bank…good people.
Mike_Summey Hi Penny
Roger Dawson Hi Penny!
Mike_Summey lew, yes. they were all single family homes & all but one was already rented.
Deb hawkeye: I have read a ton of books and the all time best book I have read is “Law of Success in 16 Lessons” by Napoleon Hill. Really gets you on track
Penny Hello Mike and Roger, everyone.
gmonty1 [i][b]hi Penny
hawkeye775 Thanks Deb
Deb Mike, Thanks
Deb Roger, Thanks
Mike_Summey Deb, I thought our book was the best you’ve ever read. 
Now I’m disappointed.
gmonty1 Tasha, I had no problems…i’m 2 months into a lease and currently neg. w/bank on foreclosure
scms Hi Mike and Roger,
tasha thanks gmonty
Mike_Summey Hi ryan
Deb Mike, of course yours is the best real estate book. The other is in a different category. All around business/success book.
Mike_Summey Tasha, banks are more interested in whether or not you can pay them back than where you live. Plus there are a lot of other options than just banks…sellers, private individuals, etc.
lew mike since these individuals had called you earlier did you try to renegotiate the second time around?
hawkeye775 Roger, also which of your books would you recommend reading (reading first, of course) 
?
Roger Dawson A friend of mine just gave me a copy of Earl Nightingales classic “The Strangest Secret.” I found it just as great as I did when I first listened to it 40 years. He also has a six CD program called “Lead the Field” that is also great. Check them out at www.nightingale.com
hawkeye775 thanks Roger
Mike_Summey lew, I let 6 months pass and then resubmitted my same offer. What was flatly rejected in April was accepted now.
Mike_Summey Anyone in the chat using the Offer Generator?
Mike_Summey Other than me!
Roger Dawson Hi Hawkeye Thanks for the kind comments. After the four real estate books that I wrote with Mike (the Weekend Millionaire series) I’d suggest my
tasha mike- not yet
Deb Mike, I will be tomorrow
Roger Dawson “Secrets of Power Negotiating” and “Secrets of Power Persuasion.”
scms I listed to your cds on investing and loved them. I’ve wanted to be a real estate investor for some time. I’m self employed, and have just gotten my business up to a decent income in the last year. I have an ok credit score, and no spare $. I currently rent. where do you suggest I start to get financing for investment properties?
hawkeye775 Thanks Roger
tasha mike and rogers fyi: the webpager on offer generator tour has several typos –at least that appear in firefox
hawkeye775 I’m using the Offer Generator
Trav Hey Mike,Roger
Mike_Summey If you don’t have the Offer Generator, you’re wasting a lot of time and probably making offers without knowing for sure whether they will work or not.
Mike_Summey Hi Trav
Roger Dawson Hi Trav
lew mike is the offer generator strictly for single family?
Mike_Summey tasha, that’s the first I’ve heard about them. Would you send me an email letting me know where they are? mike@weekendmillionaire.com
hawkeye775 The offer generator is a nice program. Very handy, and it makes it easy to calculate cash flow, and generate an initial offer letter.
tasha no prob. i will look for them again tmrw and email u
Trav whats the least amount of cash flow do you take on a deal
Roger Dawson scms, read our chapter on selling financing. There are ways of making an offer where the seller gets a chunk of cash and you get in for nothing down. That kind of deal is harder to do but it works.
Mike_Summey lew, no, it can be used with any type investment property. When using it for commercial and larger multi-family properties you may have to lump various common area expensed together in the “other expenses” field.
ryan-charlotte Is the offer generator good for lisitng properties with realtors – typically they like their own contracts
scms Great, thanks!
hawkeye775 Roger, are you actively purchasing properties these days?
Mike_Summey Trav, I’m happy with a property that initially will cover the mortgage and all expenses and at least break even. As inflation gradually pushes rents up and the mortgages pay down the cash flow grows.
lew thanks mike
Roger Dawson No, hawkeye. I keep busy with my seminars. I’ve been to China twice in last two months.
hawkeye775 That doesn’t leave a lot of extra time.
Trav how much money should you have say for overheaded expenses
hawkeye775 Mike, do you do all cash for all of your purchase now? And then refinance later?
Mike_Summey ryan, the Offer Generator will create a “Letter of Intent” that when agreed to by the sellers you can transfer to a contract. Letters of Intent are less formal and are used to find a point at which you can reach a general agreement then formalize it.
Deb Roger, I just looked through weekend millionaire book for the selling financing chapter. I don’t see it. Were you talking about a different book or am I missing it
tasha where does a real estate agent come into when negotiating? who actually presents the offer you (the investor) or the real estate agent
lew mike at what point might you sell one of your homes. is there any specific time?
Roger Dawson Mike, can you answer Deb’s question? If not, I’ll look it up.
Roger Dawson Lew:
Roger Dawson Lew: Mike has never sold a house. He only buys!
Mike_Summey Trav, the Offer Generator prompts you to estimate all expenses and if you aren’t sure what to put in a field, just place the cursor on the field’s label and help will pop up telling you what to enter.
hawkeye775 Deb, I believe it is around pages 171 to 181
Mike_Summey hawkeye, in the current market, I’m making all cash offers and then financing the purchases later. Cash is a strong motivator in these times.
lew appreciate that
Deb Roger/hawkeye, the chapter on no money down deals?
Trav ok thanks, wheres the best place to find deals through realtors, reo’s
Roger Dawson Deb, Yes that’s it/
Mike_Summey Deb, there isn’t a chapter on selling.
Mike_Summey tasha, usually the real estate agent will present the offer.
hawkeye775 It’s chapter 27, nothing down deals that work, i believe
Mike_Summey Hi Trish
Deb Mike, any suggestions on where to find more cash (private lenders etc)? need more cash. there are more deals out there than my pocket can handle
Deb hawkeye, thanks
Mike_Summey lew, as Roger said, I’ve been doing this almost 40 years and have never sold a property.
hawkeye775 it’s on “seller financing”. i think it was mistyped as selling financing earlier.
Trish Hi Mike, have I missed all the talk on the offer generator?
Deb Roger, were you refering to seller financing or selling financing. As in helping the seller sell his note to you to get to cash. I suppose both would work
hawkeye775 Mike, do you remember the email i sent you a few weeks ago on assuming a loan?
lew unreal. nice to get another idea. so you don’t necessarilyget hung up on market cycles?
hawkeye775 It turns out that I couldn’t assume the loan. It was a HUD loan, and they are assumable, but not by investors.
Roger Dawson Deb: I meant seller financing. Sorry if I typoed (is that a verb?)
ryan-charlotte mulitple offers are best used with individual homeowners or investors … I find thta Banks with REO property just want to talk about cash … at least that has been my experience
Mike_Summey Trav, find a realtor who will work with you and ask him/her to find a group of properties in the price range that would rent in the mid range of the market. Then go inspect the properties…use the Inspection Form you can print from this website to identify what might need to be done to each property and then use the Offer Generator to prepare your offers. In the beginning you may need help pricing out the work you find that needs to be done.
Trav Thanks Mike
Mike_Summey hawkeye, sorry but I don’t remember it. I get so many emails its hard to remember all of them
hawkeye775 Pre 1989, they could be assumed by anyone, but they changed the law.
hawkeye775 np
Trav so how do you become investor certified
Mike_Summey ryan, if you can’t pay cash, you’ll probably have to pay about what the banks are asking for REOs. If you have cash and can close quickly they are very flexible.
tasha Who actually presents the offer, the real estate agent or you (the investor)? If itb s the real estate agent, wont he become impatient?
lew mike any idea how flexible. wht is your experience?
Trish Mike, I went out for my first weekend assignment, but think I did it “wrong.” I went up and down all side streets of only 2 blocks and it took me an hour and 20 minutes. Should I just be getting a general idea of where the starter home subdivisions are? I may have combined Weekends 1 and 2 in my first outing.
Mike_Summey Trish, if you have anything you want to know about the Offer Generator, just ask. I’ll try to answer any questions on it.
Mike_Summey Hi Henry
Roger Dawson Tash: typically, the selling agent (representing the seller) takes the offer to the listing agent, who presents it to the seller.
Roger Dawson Tash that was a typo. The selling agent represents the buyer.
hawkeye775 The aggravating thing was that when the seller called the bank to discuss assuming the loan initially, they didn’t have a problem with an investor assuming the loan. I even talked to the bank, and then when we get the assumption package page 1 states in bold letter must be owner occupied.
Trish Hi all, I’d like to hear from other students how the Offer Generator is working for them.
Mike_Summey tasha, usually the real estate agent will present the offer. If the agent is too impatient, find another one. Oh, get an agent to represent you as a buyer’s agent rather than going through the listing agent.
Deb Tasha, the selling agent can sometime also be the listing agent who would represent both the buyer and the seller. I agree with Mike you should have your own agent
Mike_Summey hawkeye, were you very clear about being an investor? The sale of some REOs are restricted to being owner occupied unless the sale is for cash.
Mike_Summey Can anyone talk to Trish about the Offer Generator? I’d be happy to help her, but I believe she would like to hear from someone other than the one selling the program.
tasha what is the diff btw the weekend secreats in real estate to weekend mill real estate FAQ
hawkeye775 yes, we were clear. this wasn’t a reo. the seller had come to me, knowing that i was an investor, and he was in some financial difficulties, and trying to sell before going into foreclosure. the particular agent from the bank may have just been mistaken. also, the bank might have been willing to turn a blind eye since the house was about to go into foreclosure.
Trish Yes, and no offense Mike. I’d like to hear from folks with less experience in the investor arena.
Roger Dawson Tasha: FAQ is a follow up book to the first one. It is full of answers to questions that we received in these chat rooms and didn’t have time to fully answer.
Mike_Summey tasha, the FAQ book is a companion book to the Secrets to Investing in Real Estate. It is laid out with the same chapter headings and it consists of a compilation of questions and answers that relate to each chapter. If you’re reading chapter 5 and have a question you can probably go to Chapter 5 in the FAQ book and find your question and the answer.
hawkeye775 Trish, I have used the offer generator on my last two houses (the one i bought this summer, and the one i’m about to close on). It is very helpful.
Deb Trish: email me in a week or so. I will start using the offer generator tomorrow. I have lots of offers to make I can let you know how it works for me. beaumontrentals@aol.com
hawkeye775 I’m am new to investing. Bought my first house last year. Have been renting it for about 14 months.
tasha deb u are in beumont? Im in houston
Deb Tasha, no I’m in Asheville NC (in the mountains) beaumont means beautiful mountain in French
Trish Hawkeye, thanks. I figured my first offer with my worksheet and financial calculator. It took me about an hour. I thought, “I’ve got to get faster at this.”
Trish Deb,
Trish Deb, I certainly will look forward to hearing your feedback. Thank you.
tasha what is the diff btw buying / neg with foreclosures and individual sellers?
hawkeye775 my second house that i bought using the offer generator i bought at the end of July, and rented out September 1. I used the offer generator to create my letter of intent.
Mike_Summey tasha, the Offer Generator is like any other program in that the more you use it and the more familiar you get with it, the easier and quicker it is to use. The best thing about the program is that it is practically “idiot proof.” There is pop up help under the label of every entry field and each page in the program has pop up help at the top that describes the page and what to do with it.
Deb Trish, Great job that you made the effort and spent that long on figuring your numbers. Most new investors don’t take the time. Needless to say they don’t invest very long. I have been investing 10 years. I spend hours and hours on numbers. You will get better. I have no doubt the offer generator will help. Its good to understand the fundamentals of it though and do it by hand.
hawkeye775 Deb, are you involved with CREIA?
hawkeye775 Here in Asheville?
Mike_Summey Trish, I have inspected as many as 20 properties in a single day and using the Offer Generator was able to put together offers on all of them in a little over an hour.
Mike_Summey Hi Joe
Deb hawkeye, I used to be very involved. I go once in a great while now. Are you in Asheville?
hawkeye775 yes
hawkeye775 Live in Candler
Deb hawkeye – what is your name?
hawkeye775 John Hawkins
Trish Deb, I am so pleased to meet you. I started investing and learning about real estate in earnest for about a year.
Mike_Summey Trish & everyone, we are in the best time to buy investment properties I’ve seen in my lifetime.
Deb Trish, I read and read, went to investing clubs, seminars, networked and learned a ton. Then I hit the ground running. You can’t go wrong when you educate yourself.
Roger Dawson Ashville is French for burned down village.
ryan-charlotte Mike – briefly – why do you say now is the best time
tasha mike: i bet, which is I am trying my hardest to get started, but thats going to be a uphill battle I am not working ( Im a student)
Trish Mike, I find that most encouraging. I’m just new to this, trying to learn as much as possible, and consequently perhaps spending more than I should be. I want my dollars to count and have found that I’m not the best judge at times.
Trav ya mike i don’t have much cash,so i’m not real sure how to get started, trying seller financing or talking to the cpa you recommended to me? what is your thoughts on this
Mike_Summey The most important feature of the Offer Generator is its ability to balance price and terms and combine cash, bank, seller and third party financing is hundreds of ways that generate offers that will all cash flow.
Deb Trish keep it up it will pay off
hawkeye775 How long have you been investing Trish?
Mike_Summey ryan, because the sales market is so depressed the sellers are more flexible than I’ve ever seen.
hawkeye775 Trav, are you also from Asheville?
Deb hawkeye – I am Debbie Bucklaew. Have we met? If not its nice to meet you
Trav yes and i’m also a student
Roger Dawson Also that a lot of people who would have been buyers can now only rent because of the diffuculty getting financing.
hawkeye775 Nice to meet you as well.
Mike_Summey Trish, that’s why I recommend the Offer Generator so much. If you follow its guidance you won’t get in trouble. If you try to create an offer that won’t cash flow it pops up a big red message that alerts you to that fact.
Trav good to meet you also
hawkeye775 Don’t believe we’ve met.
Trav i have great credit just not much cash
Deb hawkeye – I am planning on going to the next meeting. maybe i will see you there
hawkeye775 I hope to be there as well.
Trish Hawkeye, I’ve been investing for just over a year. My husband and I bought 2 rentals in Utah, but a friend/advisor of ours totally walked us through everything. I’m now trying to learn how to invest based on my own knowledge.
hawkeye775 I have to go to NY next week, but maybe I can put it off until Tuesday.
hawkeye775 Trav, we are in similar boats as far as money goes.
Roger Dawson If you want to Email anybody in the chat, you can double click on their name over on the right. Only the person you’re Emailing will see your Email address (and that’s only if you give it to them).
Mike_Summey Trav, the Offer Generator can show you how to create offers that will cash flow and not need a lot of cash to close. Use it to calculate a small bank first mortgage combined with a large seller purchase money mortgage and you can often buy for no money down.
Trish Thanks, Mike. Yes, that feature is the selling point for me. I feel like I only have one trick in my bag at present.
hawkeye775 I will have no money for down payments after the closing in two weeks. I would like to keep looking, but have to figure out different ways of getting the cash or work on seller financing.
Trav Thanks so much for your time Mike
Trav and your knowledge
hawkeye775 Yes, thanks Mike
Joe Mike, I am a hard money lender in Florida and took back about 55 properties in foreclosure. Is it OK to give out my email and have people email me if they are interested in any of my properties?
Deb Mike, I am finding the banks won’t let the seller carry a 2nd if its for investmentanymore. have you found something different?
Penny thanks Mike, Roger, & everyone. Goodnight.
Deb Joe, please mail me. beaumontrentals@aol.com
Mike_Summey Trish, I’ve said many times that if you have cash and good cred you have more options than just good credit alone, but don’t let the lack of cash stop you from making offers. There are many sellers out there who are like the rat who said, “To heck with the cheese, just let me out of this trap.”
hawkeye775 Deb, do you know John Isrig? He said the same thing at the last meeting I attended (a couple of months ago).
hawkeye775 John is a mortgage broker.
Mike_Summey Joe, feel free to do so.
Deb hawkeye, I have spoken with him on the phone but we have never met
Joe Thanks Mike, my email address is: danieli@bellsouth.net
Mike_Summey Deb, if the bank has a 30-50% LTV first mortgage, they usually don’t care where you get the rest of the money.
Roger Dawson I need to leave you now. We have friends over for a barbeque. See you next month.
scms what’s LTV
hawkeye775 Thanks Roger
hawkeye775 loan to value
Mike_Summey scms, Loan to Value
tasha thanks guys this was very informative! untill next time…
scms Thanks!
Deb Mike, Thanks. Have a great night.
Trish Thank you, all.
Deb Roger, good night. Enjoy!
hawkeye775 Deb, maybe I’ll see you at the meeting.
hawkeye775 Thanks, Mike
Mike_Summey Yeah, I’m going to have to run also. Big football game coming on. Is Brett Farve going to beat his old team?
Trav hey Mike if a bank with financie 80 % with 20% down will they 100% finance at 60 or 70% fmv
hawkeye775 Mike, Yes
Deb hawkeye – yeah if you come be sure to find me
Mike_Summey Trav, the offers created by the Offer Generator are usually in the range of 50-70% of appraised value. If you can buy for cash, get the property rented and then get a mortgage on a property you own free and clear, you can often get even more than 100% of what you paid for the property.
Trav Thanks Mike Go Vikings
Mike_Summey Goodnight all! See you November 2nd…same time…same place!
Trav Goodnight
hawkeye775 Deb, Will do
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