Chat Transcript – June 6, 2011

Posted on June 7, 2011

Broadway Hi all
Roger Dawson Hi everyone. Welcome to the chat. Mike should be joining us any minute
Roger Dawson Hi Carlton. How are you?
carletonsheets Hello Roger.
carletonsheets Doing great, Roger. And you?
carletonsheets Every one who has joined…where are you from?
Roger Dawson Yes, great Carlton. I spoke up in Canada last week and i’m off to Trinidad for a talk next Monday.
costco Tallahassee, FL
Broadway Springfileld Mo
Rocksolid64 vegas
Roger Dawson Los Angeles
Roger Dawson There’s Mike!
carletonsheets Twenty years ago I would have been jealous. But now?…just getting older and travel weary.
Mike_Summey Hi everyone
Broadway Hi Mike
Mike_Summey Sorry I’m late. I just finished dinner.
Mike_Summey Hi Jeff
Mike_Summey Hi Jeff
Jeff Hi Mike
Roger Dawson I agree Carlton. If all my talks were in Anaheim, I’d be happy. I’ve already spoken in Poland and Malaysis this year.
Mike_Summey Hey Carleton & Roger
Mike_Summey Hi Athu
Roger Dawson Hey Mike. What’s going orn?
Mike_Summey Hi Greg
carletonsheets Hello Rock Solid. I hae a property in LV> Are there any signs of improvement?
ATHU hello everyone
Greg Hi All
Mike_Summey Roger, things are very busy here.
carletonsheets Hey Mike and Athu and Greg.
Mike_Summey Jason’s house is almost finished.
Greg Hi Carleton …
Mike_Summey Hi costco & Rock Solid
Rocksolid64 real estate is still slow here
Mike_Summey Anyone made any offers last week?
carletonsheets Yes, I did. But no response from the seller.
Broadway none from me last week but working on 3 for this week….all foreclosures
Roger Dawson It might be a good time to remind you that the Weekend Millionaire system is based on cash flow, not on the value of the property going up. It can go down in value and still be a good investment if the cash flow is there.
Mike_Summey Thanks Roger, I was just going to suggest the same thing.
carletonsheets Me too (c)
Mike_Summey The only thing slowing me down is the rate at which the property managers can get the properties rented. I could buy 20-25 per month, but carrying that much inventory vacant is not wise.
Roger Dawson This market is perfect for our system because purchase prices have gone down but rental values have gone up. People who have gone through foreclosure or lost their jobs are having to become renters, not owners.
Broadway Its hard to believe how many good deals there are out there and not that much competition either in my area.
Mike_Summey Broadway, where are you?
Broadway Springfield Mo.
carletonsheets Greg, where are you from?
Mike_Summey I can’t believe how many people were in the chats and going gung ho a few years ago when prices were ridiculous and how few are here when the opportunities are the best I’ve seen in my lifetime.
Greg Roger, I heard local (Boston) real-estate mogul Denis Keohane speak lately. He said this is one of the main things he learned from Boston real-estate mogul Thomas Flatley …
Mike_Summey Hi Guy
Greg Carleton, I’m in the Boston area …
Jeff Mike, not to change the subject…but, is there anyway you would be willing to put on a seminar (thorough…covering everything you know about today’s market using your system as well as the Offer Generator…that we could attend in Asheville or Charlotte or where ever it’s best for you. I, for one, would make the trip and gain a lot from hearing you. Any chance?
Mike_Summey When the sales market was red hot, I wasn’t buying anything. Once the market came back to reality its a different story. By the end of the summer, I will have purchased over 50 properties in just over two years.
Mike_Summey Hi Trav
Trav Hey Mike
Broadway We have 3 universities in our town and a strong demand for rentals right now. I had someone looking for a rental for 3 boys that would pay as much as $900 per month. There are some good deals for that kind of rent out there.
Trav Have you bought any properties in the asheville area lately
Roger Dawson Broadway, with college properties be sure that you’re getting 12 month rent out of the deal and have the parents sign the lease.
Mike_Summey Jeff, I might consider doing that if one of the local groups put it together. Right now, I simply don’t have time to promote semminars, book sales, etc. The opportunities in the market are too great to take time to do that.
Broadway Roger, you are correct. we have to ‘sell’ them on the idea so I generally give them an option of 9 months or 12 but, they like the 12 month MUCH better.
Mike_Summey Trav, Asheville still has a ways to go before things get in balance here. I think it may be another year and a half before we see a bottom.
Trav Ok i was just wandering because i live in the asheville area and ready to buy my first place
Mike_Summey Trav, my advice is to make offers that will work for you if accepted. Forget about asking prices and appraisals. Make offers the way you know they will cash flow for you and stick with them. You may hae to make several before you get an acceptance, but once one is accepted, it will make money for you. Don’t try to solve seller’s problems.
carletonsheets What part of the Asheville “area” do you live, Trav?
Trav In the Arden area Carleton
carletonsheets Excellent point, Mike!
Trav Mike in the OG I was worried about under esitmating the maintenance cost do you have a rule of thumb to go by
Roger Dawson Welcome back athu
wild billy Thanks roger
ATHU thank u lost connection
Mike_Summey Trav, the estimate you use is a maintenance reserve. In other words how much are you going to set aside to cover future maintenance issues that may arise. I use a small figure for new properties and increase it as the properties age or have deferred maintenance. ie. A 20 year roof that has only 5-10 years of life left.
Mike_Summey Hi wild billy
wild billy hello mike
Mike_Summey costco, where are you located?
Trav Right, also how do I know if the taxes will go up when I buy a property
costco Tallahassee
Mike_Summey costco, my son Jason graduated from FSU. We are there for all the home football games.
costco The market here is still very weak but good deals are relatively rare and they seem to go very quickly.
Greg Trav, great question on taxes. Cities and states are short $$$ so my prejudice is they’re generally going up.
ATHU mike how far away should i look for a good deal from where i live?
Broadway Mike, there are some investors in Joplin MO that have had some issues with insurance paying. One thing I’ve picked up on is that we have to know what is and is not covered in policies on rentals.
Trav Greg, Thanks but how do I know how much they will go up, to be able to make a accurate offer??
Mike_Summey Trav, buy based on today’s numbers. Even if taxes go up, so will the rent if inflation kicks in. That’s one of the best things about investing the Weekend Millionaire way…if inflation kicks in, which it will, rents will go up accordingly, but your payments on your mortgage will not. It’s a win-win situation.
Trav Thanks Mike
Roger Dawson Hi GP
gp evenin…
Mike_Summey Athu, stay within a reasonable distance so you can visit your properties and if you decide to invest in an area away from home, build a portfolio of homes in that area so it will be cost effective to visit and check on your investments.
Mike_Summey Hi gp
ATHU ok thank u
Mike_Summey Broadway, if you are in an area that has experienced major insurance claims, like Florida for example, you must read your policies very carefully to make sure things like hurricanes or earthquakes are not excluded.
Trav Mike if I can get a seller to seller finance what good are they in being in a junior position?
Mike_Summey Trav, I’m not sure I understand your question. Can you rephrase it?
Roger Dawson In California very few people have eathquake insurance. The insurance company is required to offer it to you but it costs too much and the danger is so slim that nobody takes it.
carletonsheets Great discussion everyone. And remember, you may have to look at a dozen properties before you make one offer. And as Mike said, make an offer based on what the property in worth to you not what is being asked.
Broadway Mike, exactly!!! Some folks are getting a surprise too realizing they are not completely insured to rebuild. They are only 50-60% covered on a total loss. I don’t know if they are just getting hosed by the insurance company or if they just don’t pay attention but the policies are important to go through even though it seems boreing!!! 🙂
Mike_Summey Roger, that’s the case in several areas.
Mike_Summey Carleton is the real expert here. He’s been at it longer than I have and has seen many ups and downs.
ATHU mike how do u figure out the noi on a property that’s rented already?
Trav If a seller takes a second mortgage for some of the purchase price, how do you get them to take a second mortgage position? If something happenend and a forclosure occuried dosen’t all junior mortgage take a back sit to the first?
Roger Dawson I’d like to give a shout out to Mike’s son Matt who is an Apache helicopter pilot and is leaving soon for Iraq. My hero!
gp Mike, we’re finally in a position to pay cash for our homes, then refi and rent to go on to the next. Do you have any tips on buying with cash apart from what’s in your books (for instance, what to look for to ensure the property can be refi’d)
Mike_Summey Athu, use the rent the property in bringing in and plug the numbers into the Offer Generator. It will calculate it for you. You do have the program, don’t you?
carletonsheets Great discussion everyone. And remember what Mike said, make an offer based on what the property is worth to you and not what is being asked. You may have to look at a dozen properties before making an offer and may make a dozen offers before acquiring a property. Sorry, I have to leave.
Greg Thank you for your service Matt!
Mike_Summey Thanks Roger!!!!\
gp Godspeed
ATHU yes still learning it
Roger Dawson Thanks Carleton!
Greg Bye Carleton
Mike_Summey Trav, when I have used seller financing, it has been often been with a small first and a much larger second. When the seller talks about being in a junior position, I just tell them that they received the money from the first or it paid off a mortgage they were obligated for so if they have to go back to their previous position, the are no worse off than they are now.
Mike_Summey Hi Brian
brian_in_pd Hello everybody….I apologize in advance for bringing up a topic you may have covered already today (or recently)….but I would like to know if other investors have found a way around the underwriting restriction concerning number of residential properties in one person’s name….Any ideas?
Trav Ok thanks
brian_in_pd Hello Mike and everybody else
Roger Dawson Hi Brian: I’ll let Mike answer your question
gp brian, i think you have to explore non-conventional financing with community banks.
Mike_Summey brian, that restriction only applies to mortgages that are sold on the secondary market. VA, FHA, etc. If a bank carries the mortage in their portfolio, the restriction does not apply.
brian_in_pd so I need to look for portfolio lenders, non-conventional, etc….? Thanks, I see….Has this been a frequently asked question?
Mike_Summey brian, once you exceed the number of mortgages, you are no longer considered a passive investor. That’s why the restriction is there.
Broadway Some lenders are starting to ask for 25% down on investment property but, shopping around, I found 20%.
Mike_Summey There is nothing like a long track record of success to put banks at ease. Anyone can do well when everything is going up. Even a dead fish can swim downstream! It’s the investors that have weatherd both sides of a swing in the real estate market that banks feel comfortable loaning to. This is my 4th cycle.
Greg “Even a dead fish can swim downstream!” …:D
ATHU is it a good idea to buy properties thats already rented if the numbers or rite?
Mike_Summey Greg, you can quote me on that!! 😀
Broadway I love that comment…..you just can’t argue with a dead fish having the ability to swim downstream!!!
Trav Roger, I just wanted to say thanks are you guys were right, the first time I used the vise gambit it paid for the whole weekend millonaire bundle products. so awesome.
Greg lol
Roger Dawson Thanks Trav! Help us to spread the word!
Trav I sure will
brian_in_pd I have to leave, unfortunately, but I appreciate the advice. I am very thankful that I read your books! Take care!!!
Mike_Summey Trav, the amazing thing is that the techniques and tactics we teach are so simple and the work so well. I guess most people are looking for some complicated formula when they don’t have to. As I know you ahave heard said, common sense is a very uncommon thing.
Roger Dawson Thanks Brian
Trav yes; I used the vise technique and I was shocked at the results
wild billy Liked your e-mail today Mike…nail on the head
Roger Dawson The Vise tactic is: You’ll have to do better than that. Then shut up! The next person to talk loses!
Mike_Summey Trav, I have used all of the various techniques at one time or another and they all work just as well. Roger’s negotiating advise has made millions for me. Now I also know that by saying that he will want some of the profits…sorry Roger!!!:D
Trav 😀
Mike_Summey Thanks Wild Billy!
Roger Dawson I thought we had a deal that I’d make you famous and you’d make me rich, Mike!
wild billy Hows that work’n for ya.
Mike_Summey Roger, I’m still waiting to become famous.
Roger Dawson You’re too modest, Mike.
Greg I’m in the middle of Roger’s latest edition of, “Secrets of Power Negotiating” … worth every penny!
Mike_Summey Wild Billy, things are doing very well. I couldn’t be happier.
Mike_Summey Greg, do you have the Offer Generator?
Mike_Summey HI Charlie
ATHU mike is buying already rented properties a good idea?
Greg Mike, not yet. I’m going to get it … sounds great …
CHARLIE Hey everybody been a long day
Roger Dawson Thanks Greg! YOu made my day!;} :p
Greg Roger, well deserved praise! … 🙂
Mike_Summey Athu, sorry, I missed that earlier. Yes, buying rented properties is good as long as you get good tenants. You should always review the tenant’s application and payment record before relying on what the seller tells you.
Roger Dawson I have a new book to plug also: Secrets of Power Problem Solving. If your local book store doesn’t have it got to Amazon.com.
Trav Mike back to the maintenace reserve, I am just afraid of ending up with a alligator property, does it just take time to get a feel for setting the correct amount to the side for maintenance. I thought if i could get a great buy on my first place i could use the equity in it to get my first rental.
Mike_Summey Charlie does a lot of work for me in South Carolina and also does a great job of finding properties for me to buy. He’s a class act!
Mike_Summey Trav, have you used the inspection form on this website?
Trav yes
Mike_Summey Trav, the form will help you identify the condition of everything in the properties and also help you to determing what is a good percentage to put in reserve.
Trav Ok Thanks
Roger Dawson Trav: there’s always a certain amount of risk involved. Don’t let it incapacitate you. Make your best judgment, believe in it it and focus on making your decision work.
Trav Roger right, I have never bought a property before and I guess there and to many unknowns.
Mike_Summey Trav, if a 20 year roof has approximately 10 years life remaining, you would reserve twice as much as you would if the roof were new. Same with paint, carpet, appliances, etc. You just have to estimate a lot of the deferred maintenance.
Mike_Summey Trav, don’t get caught up in the “paralysis of analysis.”
Roger Dawson Charlie, it looks as though S. Carolina will be picking our next Republican presidential candidate!]
Trav Right I think I do try and over think things sometime
Broadway I’ve taken the inspection form and figured out the approximate cost of each item. Then take the age of each item on the house to figure out the cost of replacement after its life expectancy is over so, it helps figure the reserve more accurately
CHARLIE Roger not sure on that yet
Mike_Summey Trav, as Roger said, there is always risks involved with investing. How many people buy stock thinking they will go up but they don’t.
Trav Good point
Mike_Summey Broadway, that’s exactly what I do. I just don’t go into great detail doing it. If I come within a few dollars, I’m fine with that. When I guess, I try to be conservative and make sure my guesses are adequate.
Mike_Summey Hi Richard
Trav Broadway good idea
Mike_Summey You’re late!
Broadway Mike, I try to stay conservative too….I know I’m going to make a mistake so being conservative helps me be a bit more confident
Richard Hi everyone
Greg “It (stock market) will fluctuate.” J.P. Morgan
Trav Mike, Roger, and everybody thank you for all the advice, it has been helpfully and talk to you next month
ATHU goodnight everyone .Thanks mike and roger for the help
Roger Dawson This has been a good chat. It was great to have Carleton Sheets stop by. Good nigth everyone!
Mike_Summey Greg, so will real estate prices, but rents tend to be much more cinsistent. That’s why the Weekend Millionaire method of investing works so well.
Greg Good night all!
Mike_Summey Yeah, I’ve got to go as well. See you all here next month.
Mike_Summey GO MAKE SOME OFFERS TO TALK ABOUT WHEN THE NEXT CHAT ROLLS AROUND!
wild billy Thanks, good nite

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