Chat Transcript – October 3, 2011

Posted on October 4, 2011

Mike_Summey Hi everyone
electricianhoward hi
carletonsheets Hello Mike
broadway Hello Mike, Carleton and everyone!!!! It’s a beautiful day in the Ozarks today
Mike_Summey It looks like we have a special guest tonight. Hi Carleton Sheets
Mike_Summey Hi Jan-eric
Jan-Erik Good evening
carletonsheets Mike, just want to stop in for a few minutes to say hello to everyone!~
Mike_Summey I’m still trying to finish my dinner. I was splitting firewood until just a few minutes ago.
Jan-Erik No more splitting. Light them fires. πŸ™‚
Mike_Summey Carleton, glad to have you. Don’t just stay a few minutes, spend the next hour wih us.
carletonsheets Mike, is that how you earn your living (ha-ha)?
Mike_Summey Carleton, trying to save some meney! πŸ˜€ I learned that from you!
Mike_Summey money
carletonsheets I have wife waiting for dinner for me so not to get yelled at……….
Mike_Summey Tell her to put it in the warmer.
broadway Now THAT’S a good reason
Mike_Summey Hi Roger.
Roger Dawson Hi everyone!
broadway Hello Roger!
carletonsheets You just won’t let that Rolls Royce-McDonads story drop will you?
Roger Dawson Hi Carleton! Good to have you with us!
carletonsheets Hello Roger, old (young) friend!
Mike_Summey Carleton is getting forgetful…he didn’ take me to McDonald’s for lunch in a Roll royce, it was Burger King.
Mike_Summey Hi Boston
Boston1 Hi Mike and Everyone else!!
Mike_Summey Any good questions or topics for discussion, time is wasting.
carletonsheets Where is everyone from?
Jan-Erik Williamsburg, VA
Boston1 Boston, MA
electricianhoward toronto
broadway I’m from Springfield Missouri
Ned eastern NC
carletonsheets Great…thanks.
broadway Mike, where would you go to find out the vacancy rates for SFH in an area? Or, is there any such of an animal??
carletonsheets Ned…how far east?
Roger Dawson Regarding Rolls Royces an English immigrant friend of my told me the difference between England and the USA. If a man in England is digging a ditch and sees a RR drive by, he says, “I wonder who he’s stealing from.” An American would say, “I’m going to have one of those one day.”
Ned Kinston–halfway between Raleigh and the coast
Mike_Summey broadway, a good property manager should be able to provide that information.
broadway Ok, thanks Mike. I haven’t found a good one then yet!
carletonsheets Broadway, I would solicit the opinion of two or three property manager firms and make sure they manage property like the ones you are interested in.
Roger Dawson Broadway, you could also check out the website of your local Board of Realtors.
broadway Thank you all 3!! The Board of Realtors has some good stats but, just not that one. The chamber is not much help right now.
Mike_Summey Broadway, we have interview several in markets before we found one we liked and even then we have occasionally had to replace that one with oanther one. I tell people all the time that I don’t manage properties, I manage the property manager.
broadway Mike, I’ve remembered that too. Some of my friends look at me funny when I say that but, when they think about it, it makes sense to them.
electricianhoward in toronto. the intest is historic low, the price is historic high. i talk a few of agant, they all say the number dose not make sense, even muti plex property. you guys are experiencing wave of market in US. any advice for me? much thanks,
Roger Dawson Mike’s had pro[u]p[/u]erty managers since his first house. It’s the number one reason why investors give up on rental real estate. They hate having to deal with the tenants.
Mike_Summey Thanks Roger, I couldn’t have said it better.
Jan-Erik Take everything you read with a grain of salt. www.RentRange.com
broadway I’ve talked to people that really turn their nose up to real estate investments and they say that as well but, they also don’t know how to buy it right either.
Mike_Summey I wonder where everyone is tonight. Is there something going on or are people just so turned off with real estate that they can’t see the opportunities that are plentiful right now?
Mike_Summey Hi mustang
Mike_Summey Hi Trav
carletonsheets Very good point, Broadway!
Trav Hey Mike, Roger
mustang Hi Mike, sorry had trouble signing in!
Roger Dawson The key is to buy at a price where you can afford a property manager. Our offer generator software builds that right into the offer.
Jan-Erik Mike, many of the sellers in my area just gave up. Expecting a reset soon. Did so last year about this time.
broadway Roger, people don’t understand that. I’ve talked to people that talk themselves out of making an offer on property because they don’t believe they will consider the offer seriously. Just amazes me.
Ned Mike, Looking at some REO (HUD) homes needing serious repairs. Is there any point in trying to negotiate repairs, or should I just factor my estimated expenses into the purchase price?
Mike_Summey I had a builder sitting in my office today asking if I would buy new properties he built at wholesale if he was unable to sell them at retail by the time they were completed.
Trav Mike, can I get the builder name?
carletonsheets I hear yelling, so God Bless everyone and best of luck to all!!!!
Mike_Summey Ned, use our Offer Generator to compute what you shold offer. It takes into consideration the repairs you will have to make and deducts them from the offer price.
broadway Thank you Carleton!!!!
broadway Bless you as well
Mike_Summey Carleton, tell her to be patient.
Mike_Summey Tell her I may have to come over there and straighten her out.
Ned I have the offer generator and was using it, but when I upgraded my computer, I could no longer get it to work.
CHARLIE Hi everybody
Roger Dawson Hi Charlie
Mike_Summey broadway, I’ve made offer that were less than 60% of asking price and had them accepted without a counter. I’ve also had people tell me to Go To Hell when I offered 805 of their asking price. You don’t know what a seller will do until you ask and the way to ask is with a written offer for them to respond to.
Mike_Summey Hi Charlie
Mike_Summey Ned, what did you upgrade to?
broadway I agree Mike. I don’t think real serious investors know to get that agressive and deal with turndowns that way. It is a different mindset but, once you have it, it’s very interesting what comes around.
Ned Roger, I’ve just finished listening to your power negotiating book on cd, and started a second time. Excellent tools that I am putting to practice at work and hopefully soon in property acquisitions.
Roger Dawson Thanks Ned! You just made my day!
Ned Mike, just a basic dell computer with windows 7 operating system. The problem may be me. I’m not a computer whiz, but it worked fine on my old computer.
Mike_Summey broadway, if people only understood that the worst that can happen with an offer is that the seller says NO. You don’t lose anything but the time it takes to write the offer if you get a NO.
broadway That’s exactly right. I’ve not seen this happen yet but I know you have Mike, where they’ve turned you down at first only to come back some time later asking if that offer is still good. You really put yourself in the control of negotiations there.
Roger Dawson In negotiating we say that there are 5 reasons to ask for more than you expect to get. You might get it, it makes it easier to get want to really want,
Mike_Summey Ned, we have had some people report problems with trying to load the program on Windows 7 and we have had several people say that they were able to do so. I’m not a computer guru either, so I can’t advise you.
Mike_Summey Hi dpgettleman
dpgettleman@charter.net hello
Roger Dawson ou create an environment where the other person feels they won, and it prevents deadlocks when dealing with an egotistic person who’s lroud of their ability to negotiate. The fifth reason is for sellers: It raises the perceived value of what you’re selling.
broadway Mike, those that have worked around the Windows 7 issue, is there a way we could get with them??? I have the same issue and thought about taking my machine to a computer guru to do a workaround. You’ve said it’s a Window 7 security issue I believe.
sparky37 Hello Mike & Roger
Boston1 I am very interested 2 separate towns, one has higher property values and is closer to my home, while the other offers great values and terrific cash flows yet is farther (30mins drive) away: Where should focus my search?
Mike_Summey These chats used to have 50-100 people in each chat. Now were down to just a few. It seems that people who think they can get rich overnight are now looking somewhere else rather than real estate. With the limited participation, it make me question if it is worth our time to continue the chats under present market conditions. What are your thoughts?
Mike_Summey Hi Sparky
broadway Mike, personally speaking, I very much enjoy these chats and do gain knowledge and insight even if I don’t ask anything. I also like it when you do have guests such as bankers, appraisers, etc.
sparky37 Mike, I love the chats! For me 8pm is a tough time 9pm would probably work better. Just my opinion but I do read every transcript especially when I miss the chat
Mike_Summey Boston, I’d probably go with the one that offers the best deals and let that be my hub. Find a good property manager and then try to stick with properties within a 10 mile radius of the manager. Then you can visit the market and see all you properties without running all over th place.
Boston1 Mike, these chats are terrific! I like the exchanges and appreciate you (and Rogers) time!
Mike_Summey Everyone, how can we stimulate interest in the chat so that it truely is worth everyone’s time. Any suggestions?
Roger Dawson Boston: compare the rents to the purchase price. If you can buy in one town for 80 months rental income and 100 months rental income in the other town, the first one is likely to be better for you. That’s a crude rule of
broadway I’m hoping to have a line of credit next month to purchase more properties. I like the way you structure your fixed payment variable interest rate and looking forward to getting with my banker. He’s had my 1st property for some time now and I’ve got a good relationship with him and the bank so, I’m hoping they will work with me to get to the next level……..which is unlimited!!!! πŸ™‚
Ned Mike, this is a slow night, but I hope you will stick with the chats. I have found encouragement from some of tonight’s comments, so it has been worthwhile to me, as always. Next time, I’ll come prepared with questions.
Roger Dawson thumb but it’s a good place to start.
Boston1 Good point Mike, I should be able to cultivate relationships in that hub
sparky37 Mike, I would suggest sending out a topic for discussion ahead of time and have everyone come prepared with Q & A
Mike_Summey Sparky, good idea. We’ll consider trying that.
Ned I agree with Sparky–a monthly “point of emphasis” to get people interested.
Boston1 Roger, I would have to spend more time in the farther town, as the avlues look great on paper…however I want to make sure that I fully understand the “local” RE market
Boston1 Mike, for whats its worth, I tell all my friends about this chat
sparky37 Thank You Mike, feel honored to give you 1 good idea to the numerous ones you have given me πŸ™‚
Ned Mike, can you say more about the fixed rate variable interest loan product. I’ve mentioned to a couple of bankers (small community lenders) and they act like I’m out in left field.
Mike_Summey Boston, I concentrated on just one market until I got a high concentration in it. Then I started creating new hubs in South Carolina and Alabama to augment what I had in North Carolina. It has worked out well.
broadway I tell my friends about these chats too Mike. I really think they are great to network and learn from everyone at every level
sparky37 Mike, what part od SC are you investing in?
sparky37 *of
Boston1 Mike, I understand what you mean. Is there a rule of thumb when it comes to “farming” the local area? I work full time, so that leaves the weekends (haha) but I wouldn’t mind staying overnight, driving around, meeting prop managers.
dpgettleman@charter.net mike, we almost looked at a not quite finished log chalet this past weekend for well under $100,000 with 4 acres to buy as a vacation rental in Lake Lure….. but it was in a gated community and had fees. Do you fool with vacation rentals and do you do gated communities with fees. i hate the idea of any fees and would not like dealing with other peoples rules.
Mike_Summey Ned, I use a type financing in which the payment is fixed for 5 years, but the rate floats. This allows the breakdown to principle and interest to change without changing my cash flow. I usually set the fixed payment at an amortization rate .5 to 1.5% above the prevailing rate so that in the beginning I am getting ahead of the amortization schedule, which allows the rates to rise without creating a negative amortization. I use 5 year loans with a baloon at the end of 60 months. If you preform as you should during the initial 5 years you can usually roll over the loan for another 5 years very easily.
Mike_Summey Hi Mark
markl hi all
Mike_Summey dpgettleman, I would not consider a vacation rental or a gated community with fees. These are not good rental properties.
Mike_Summey Hi Penny
Roger Dawson DP, we strongly recommend against vacation property. If the market takes a dip it’s the first thing that suffers. I have a second home at Lake Arrowhead but I think of it as an expense like my sailboat, not an investment.
Roger Dawson Hi Penny
Penny Hi Mike. Just signing in for a few min.
Penny Hello to you as well Roger!
dpgettleman@charter.net i’ve got a little bitty one on a beach in yucatan and i can’t give it to anyone, much less rent it. LOL but i sure love going there.
dpgettleman@charter.net thank you for telling me that… it is so tempting sometimes… those little vacation homes.
Trav Mike have you bought any properties in asheville area lately
Mike_Summey dpgettleman, there are so many good rental properties on the market now you don’t ahve to try to make something like a vacation rental work. As you have doscovered, most of the time they don’t.
markl anyone have any idea if the banks will be moving any faster on foreclosures or seen any increases in numbers of reo listings ?
Mike_Summey Trav, I haven’t bought any Asheville properties lately as I feel the market still has not come back to reality. I think this time next year will be much better.
Trav Ok thanks
Mike_Summey Mark, the banks seem to be doling them out slowly…probably to keep from totally flooding the market and thereby driving prices down even more.
broadway Mike, when you purchase a house, have you had any problems with appraisals after the purchase when you finance your money back out????
dpgettleman@charter.net we have 2 smallto medium sized rental houses in west asheville and are looking for 1 more. it is the best “retirement plan” out there. i feel like i can actually really retire someday….. when I am ready because of those rental properties. i don’t have time to look much though…. keep thinking one will just fall in my lap like the others have.
Mike_Summey We’re fast closing in on the end of our time. If you have any more questions or want to discuss any aspect of investing, we need to get with it.
Mike_Summey dpgettleman, West Asheville is a vary good rental area. I have several properties there and they do very well.
Trav Mike what about the oakley comm.?
Mike_Summey broadway, no I have not. If you buy right, the appraisals should reflect that.
dpgettleman@charter.net Lots of small houses in Oakley… i would think that area would be good
Mike_Summey Trav, I have severan in the Oakley community, but they do not do as well as West Asheville as far as the rate I can get for comparable properties.
Mike_Summey Charlie, how’s the new house in Anderson coming?
broadway Thanks Mike, that’s what I assume as well. Just curious if you had run into any appraisal issues. I’m conservative and just wanting a 10% bump on my appraisal on my projections, not to cash out any money necessarily but, just to have the security on the line! I want my bank to want ME more!
dpgettleman@charter.net best to buy where people want to live?
Trav that what i was thinking, since you buy at wholesale do you get a reduction in your taxes
Roger Dawson Remember this is the best market for investors that I’ve seen in the 35 years I’ve been a broker!
CHARLIE Mike slow waiting on materials to arrive.
sparky37 Goodnight All!
broadway Mike, when you have time, if possible, could you share the statement you put in the contracts when you make multiple offers to protect you and control how many you purchase??
Mike_Summey Trav, I have been very seccessful in SC with getting taxes reduced based on what I paid for properties.
Trav thanks
broadway I think that’s a great tool to help new investors be comfortable to make multiple offers.
Roger Dawson Goodnight everyone!
Boston1 Thanks goodnight all!
Mike_Summey broadway, the statement reads something like this, “This is one of multiple offers being made simultaneously. Buyer is wanting to buy one property and will close on the first offer that is accepted. Once an accepted offer has been received, buyer has no obligation to close on subsequently accepted offers.”
dpgettleman@charter.net thanks for doing this chat
broadway Thank you Mike. You are AWESOME!!!!
Trav Mike I really appreciate your time and the chats
Mike_Summey It looks like we have had a very slow night tonight. I hope those of you that participated got something from the chat. I’ll see you here on November 7th. Goodnight.
Trav Goodnight
broadway Thankl you very much for your time, Rogers time and Carleton Sheets time as well
broadway Hope everyone has a super October!!!!!!! G-nite to all

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