Chat Transcript – November 7, 2011

Posted on November 8, 2011

gimmecoffee really? only 3 of us?
gimmecoffee 4
gtvny looks that way, bad economy I guess
Wade There we go
gimmecoffee bad economy- for sure. Cant get a credit line w/o a warren buffett backer
tahoematt good evening everyone
Boston1 Good Evening all
gtvny I have been pretty lucky getting credit, problem is where I live everything is a short sale so who has time for that.
gtvny Although I did just buy a short sale and it went rather smooth.
gimmecoffee DFW metro area is tighter than a drum, for new loans
Mike_Summey Hi everyone! Sorry I’m a bit late.
gtvny that’s surprising
Boston1 Hi Mike
gtvny here in Tampa is getting a little better
Wade Hey Mike
tahoematt howdy mike
MrBrian Hey Mike
Mike_Summey Did any of you have problems getting into the chat?
tahoematt no
Boston1 No problems
Wade no
gtvny nope
gimmecoffee Java update. have to keep larry ellison happy
Mike_Summey I guess my computer is, like me, getting a bit old.
CHARLIE Hey everybody
Mike_Summey I see some new people tonight. Where is everyone from?
tahoematt lake tahoe california but investing in the reno area
gimmecoffee aside fromthe Java issue, my biggestproblemis my 2 great danes helping me type
gtvny Tampa
gimmecoffee DFW suburbs
Boston1 Boston, MA
mello1112 Marland
Wade london ontario
tahoematt so mike can i can fire away with some questions
MrBrian Tampa
Mike_Summey Looks like we have the country and even Canada well represented.
Mike_Summey tahoematt, go ahead.
Roger Dawson Good evening everyone
Boston1 Hi Roger
Mike_Summey Hi Roger
broadway Hello Mike, Roger and everyone tonight!!!!
Mike_Summey The market is still great for true investors. We’re buying at the rate of about 1.5 per month.
Mike_Summey Hi Chase
Wade Sorry Mike, I just heard about your site and online chat. But I have to run. I will be back next session for sure!!!!
chase hello
Mike_Summey Thanks Wade. How did you learn about us?
Wade A Friend who has your CD’s
Mike_Summey Wade….smart friend! 😀
tahoematt i have been making all cash, 14 days closing offers, at a discount between 15-25% off the asking price but they aren’t biting. i went to our recent real estate investment club and a local realtor said the sales price to asking price was around 98% in my price range (sub $150k range) should i keep throwing more offers at the discounted range or pony up a little bit and offer more at the asking price?
Wade 😀
Mike_Summey Hi Gene
Mike_Summey tahoematt,
Wade How often is this chat?
gene hi mike
Roger Dawson If you’re not familiar with us, we teach and buy and hold real estate program. Our objective is cash flow, not being able to flip a property for a profit.
Mike_Summey I made 19 offers one day in 2009 and only one was accepted at the time I made them. Within 8 months, I had bought 11 of them.
Mike_Summey Hi Nathan
Nathan Hi Mike!
gimmecoffee amen to the buy/hold method.
gene I’m in the DC area. Anyone familar with the area?
Mike_Summey Wade, we host the chats on the 1st Monday of each month.
Jan-Erik Good Evening all
tahoematt so just keep going then. i will stay persistent.
Mike_Summey Hi Jan-Erik
Wade Great…… thanks Mike. You will see me back. Have a good night
Roger Dawson I’m in Souther California. Mike is in Asheville.
gtvny Anyone have luck raising rents?
MrBrian Mike, my realtor says I should only make one offer at a time, because if I make multiple offers and they are accepted, I can’t buy them all (i can only buy 1 now).
Mike_Summey tahoematt, something to think about…I’ve made many, many offers, but I’ve never lost money on a property I didn’t buy. Stick to your guns. You’re better off making 50 offer and getting one accepted that makes you money than you are making 50 offers and getting 20 accepted that you lose $25 per month on each.
gimmecoffee i have 4342 unit complex here in DFW. we tweak rents weekly usually 15-20 dollars, dependson unit availabilty
gimmecoffee 442, not 4432
tahoematt ok. consider it done. thanks
broadway Mike or Roger, have either of you purchased a house with an existing renter? I’m a little reluctant doing that. Any thoughts?
Roger Dawson Hi Jason!
Jason Hi Roger, I’m happy to be here, it’s my first time. I’ve read several of your books.
gtvny in Tampa there is a lot of competition for renters, so many properties are investment.
Mike_Summey MrBrian, put a clause in the offers that says, “This is one of several offers being made simultaneously. Buyer will close on the first offer that is accepted. Once an offer has been accepted, buyer has no obligation to close on any subsequent offers that are accepted.” That doesn’t mean you can’t close on more than one, but you are only obligated to close on the first one.
gene Mike or Roger, any help on how to look for a property manager? I’m in the DC area.
Mike_Summey Hi Jason
gtvny Good news is I’m not seeing as many incentives for renters as I used to.
Jason Hi Mike, thanks for having me. I enjoy your teachings!
gtvny Mike, that’s an awesome clause! I don’t remember seeign that in your books.
Mike_Summey broadway, I’ve bought many properties that had tenants in place. Of course, I want to see the leases and credit reports before closing.
Mike_Summey Hi Penny
MrBrian Thanks Mike. I will use that clause.
Penny Hi Mike.
Mike_Summey Jason, where are you from?
broadway Thanks Mike!!
Penny Hello everyone!
Jason Castle Rock, CO
Roger Dawson It’s a perfect market for investors. More and more people are not able to buy because they can’t get a mortgage after a foreclosure. More potential tenants means great potential for rent increases.
Roger Dawson Hi Penny!
Mike_Summey MrBrian, that clause eliminates all the back and forth that many sellers want to engage in. It tells all the sellers that if they want to sell their property, they have to move quickly before someone else accepts you offer.
Mike_Summey Hi gpllc
broadway Jason, check out Shepherd and Associates realtors. Personal friend of mine!!
Roger Dawson Jason, Mike has a son named Jason.
Jason Very cool, thanks for sharing. I’ll share that with my girlfriend.
Mike_Summey gtvny, I never wrote that clause until after the books were published. I’ve found it works wonders in the current market.
gimmecoffee Interested in thoughts, comments re: SF vs multiplexes (duplex, Triplex, quads) as investments
gpllc Mike, could you please repost the clause you are referring to?
MrBrian Sounds good Mike. I am currently looking at several properties in the Tampa area. I’ve read three of your books and also listened to Rogers power negotiating CDs.
Boston1 Mike and Roger, what are you thoughts about mixed use (2 apartments + 1 Store) properties in dense urban areas? I’m seeing some deals that cashflow well, but hesitant to jump in.
Roger Dawson Remember that when you make an offer to buy and put up a $1000 initial deposit, the extent of your liability is $1000. Nobody can force you to buy. Think of it as buying an option to buy for $1000.
Mike_Summey gimmecoffee, SFHs are the gold standard for new investors. Once you get some experience and know more about dealing with tenants and property managers, multi family properties are good investments.
Mike_Summey Hi nspollard
nspollard sorry I’m late
nspollard Trying to make some money
Jason Broadway? Is Shepard & Associates located in CO?
Mike_Summey gpllc, “This is one of several offers being made simultaneously. Buyer will close on the first offer that is accepted. Once an offer has been accepted, buyer has no obligation to close on any subsequent offers that are accepted.”
gimmecoffee Thnaks, Mike. I’m newbie on the SFH side. Looking to get away from MF, too much headache
CHARLIE Roger you can also put the earnest money as 1000 upon accetance if you are make several offers.
broadway Jason, yes in Castle Rock. He and Sandie will take good care of you. Tell him Mark B. from Springfield MO sent you.
nspollard Is it better to hold propery in llcs or trusts?
Mike_Summey Boston, you have to be very careful with that type property. The commercial part can go vacant and stay that way for months, even years.
gimmecoffee nspollard—you read my mind
Jason Thanks Broadway, I’ll check them out.
nspollard gimmecoffee, I have some coffee now
Roger Dawson Mike from a negotiating standpoint that clause is a great way to put pressure on the seller. You’re telling them they have to move fast and they have other sellers competing for your business.
Boston1 Good point, Mike. In this economy you never know if your tenant can stay in business
Mike_Summey everyone, CHARLIE does a lot of work for me and I’ve bought about 40 homes from him in the last 2 years. He is a good source of information…and he just soloed his airplane last Sunday.
Eric L what are common initial deposits to FSBO’s. 10, 100, 1000
gimmecoffee congrats on your solo, charlie!
CHARLIE Thanks gimmecoffee
Mike_Summey Eric, there is no common amount that I’m aware of. I’d put down as little as I could get away with since that is the only thing you have at risk.
broadway Congrats Charlie!!! Did you get your shirt cut???
chase congrats Charlie
Roger Dawson Congratulations Charlie. Isn’t that a great time in your life, when you’re up there alone for the first time. You’re thinking, ‘Oh Crap! One way or another I’ve got to figure out how to get this plane down.
CHARLIE Broadway my instructor took whole shirt and was going to cut it and sign it
Mike_Summey nspollard, I hold all of my properties in LLCs, but its for estate planning purposes rather than liability protection.
gimmecoffee @Roger Dawson _ that’s why I’m also a silver winged jump master
nspollard I’m a Georgia realtor everyone. If you are in Georgia, I can help
MrBrian Mike, is there a common deposit amount if the property is listed by a realtor?
Penny goodnight all
Roger Dawson Wow. I jumped out of a plane once that that was scary enough for me!
CHARLIE Roger it was great, had landed several times with insructor in 7 plus cross wings. The day i solowed there was no wind. Felt great
gene nspollard, which area do you work in Georgia?
Jason Mike or Roger, when you were first starting out would you just explain general concepts of your offers to a seller and then let a Title Company or Attorney explain specifics at the Closing?
nspollard my farm is Duluth but I know or can find agents all over the state
Mike_Summey MrBrian, not that I know of. Some Realtors will try to push you to put down a larger amount, but I’ve often put down as little as $100 and had the contracts accepted. A lot depends on how long you are asking the seller to take the property off the market. A cash offer to close this Friday won’t need as large a deposit as an offer subject of obtaining financing and to close in 90 days.
Eric L How about buying properties in Land Trusts instead of just llc’s
Roger Dawson Jason, keep it as simple as you can, while addressing any known concerns. I always thought that “Seller to sell, buyer to buy. Details to follow in escrow” was perfect offer and acceptance.
Mike_Summey Jason, I always put my offers in writing and made them as clear as possible.
Jason Thanks guys!
gtvny MrBrian, I live in Tampa, what areas are you looking at? fyi there are lots of investor owned properties however we have some very good property managers.
MrBrian Thanks Mike.
MrBrian gtvny, I am looking in the Lakeland area. Do you know property managers there?
gtvny no I do know one in Tampa that manages properties in Lakeland, RentSolutions, my PM is Ralph C. They are very good.
gimmecoffee Please share your wisdom re: HUD purchases. Worth the paperwork headache?
nspollard Is anyone using a loan from their 401k as a down payment?
gtvny Ralph took care of a major issue at midnight one night, jumped out of bed for me.
gimmecoffee did i401K financinfor the MF i’m in
Jason Roger And Mike, would either of you advocate signing contracts over the kitchen table or would you use a title company, escrow company or a real estate attorney to complete a transaction?
MrBrian Mike_Summey A lot of the properties I’ve looked at are short sales. Since the mortgage holder will have to approve of the sale, can I still write my offer to close quickly (i.e, 7 to 14 days)?
CHARLIE Gimmecoffee if you are going to buy hud properties find a good hud agent. Most realtors are not hud certified. Paper work is more than normal contract
MrBrian gtvny Thanks. I will check out RentSolutions.
Roger Dawson Gimmey coffee: HUD sales are fairly straighforward if you understand the way the government runs the program. Ask a local broker where you can take a course (free and run by the government.)
gene anyone have connections in the DC area? broker, manager, etc?
Mike_Summey Jason, Ive signed many a contract over the kitchen table of similar situation.
Roger Dawson Jason, never buy a property without getting title insurance.
gtvny MrBrian, ask for Ralph and tell him Gino sent you over.
nspollard I just won a HUD auction for a client
gimmecoffee Mike_Summey …does ‘CLEAR OUT EXISTING INVENTORY’ portend newer versions/ upates?
MrBrian gtvny Thanks.
gimmecoffee Roger Dawson – thanks–i will get with a realtor for the class info.
Jason Would you consider an inspection, title search and ILC the minimum boxes to check when buying a home with owner financing?
Mike_Summey MrBrian, the quick sale provision works well to get the seller to sign the contract, but it then must be approved by the lender. I’d recommend putting a relatively short closing date in the contract and then adding a clause that says, “Closing may be extended by mutual consent of both seller and buyer.” That lets you extend in short increments and gives you an out if things take too long.
Roger Dawson Most people get very frustrated with short sales. It may take months to get the lender to approve writing down the loan and they could still change their minds the day before you planned to close. It’s a lot easier to wait until the bank has foreclosed on the property and owns clear title.
Mike_Summey gimmiecoffee: NO COMMENT
gimmecoffee just hoping for more material to read, that’s all
gtvny I just bought a short sale and it was very smooth, I know it’s not the preferred way to go but in Tampa it’s easier to find a short sale than not. Also the banks are willing to unload, we lowballed and they accepted the offer plus gave us 4% towards closing!
nspollard second mortgages slow the short sales down
gimmecoffee speaking of banks unloading…i recall a recent news article speaking to the fact that banks have >1Trillion in real estate to unload
Boston1 Anyone familiar with Homepath program? Any possible values there?
Mike_Summey gtvny, good for you. Short sales vary widely from market to market and from lender to lender. Often, the delay is in finding tha actual owner of the mortgage. Since many of the mortgages were bundled and sold numerous times, it can take a year sometimes to find who actually owns the mortage.
gtvny I did get lucky because the second was with the same bank that owned the original.
Mike_Summey Charlie, aren’t you familiar with Homepath?
Boston1 Thanks Mike — I am seeing some decent terms (low downpayments for investors)
gtvny Wait homepath out, they will reduce the price every month. I have my eye on a place and each month they drop the price. Also if you buy form them ask for 6% closing costs.
Boston1 lots of inventory right now
CHARLIE Homepath is more for the first time home buyer or a family that is going to occupied the home. Homepath perfers family not investor. Mike we have bought 1 i think
gene Boston, Fannie & Freddie tries to prie REOs close to the market but the GSEs don’t have anyone on the “ground” so they relies on broker opinions. sometime they don’t price them correctly.
Jason Mike & Roger, what’s the maximum # of single family homes you like to put into a single LLC? “Or” is the total value of the homes in the LLC a better rule of thumb?
Boston1 Thanks for the responses
Boston1 gtvny and Gene: How flexible are you finding GSEs when it comes to price negotiations?
Mike_Summey gtvny, we bought a house where the same bank owned the first and second mortgages. They foreclosed on the first; thereby wiping out the second. We then bought the house from the bank that foreclosed on the the first. After getting it rehabbed and ready for rent, my son went by one day only to find the front door broken into and a guy inside the house. When my son confronted him he said the house was being foreclsoed on and he was ther to secure the house for the bank. My son called the police and had him arrested for breaking and entering only to later find out that a different division of the same bank was trying to foreclsoe on the second mortgage that had already been wiped out. It was a classic case of the left hand not knowing what the right hand was doing.
Boston1 or are they relying on the same brokers to yay/nay the offer?
Mike_Summey Jason, I don’t have a specific number. I use LLCs for estate planning purposes so I let what I want to do with the properties when I’m gone determine how many are in the LLC.
gtvny Mike, thanks for the heads up on that, I need to keep that in mind for future reference!
MrBrian Thanks Mike and Roger for the information. I have to go now but I will read the transcript from the rest of this chat session later. I’m reading your real estate book for a 3rd time.
Roger Dawson Great Mr.Brian
Mike_Summey MrBrian, follow the advice in the books and you won’t get in trouble.
MrBrian Ok. Will do. Thanks again.
broadway WOW Mike!!! Just goes to show how poorly managed some of these situations are managed in the banking system.
Mike_Summey Wow, this hour has flown by. We only have about 10 minutes left.
gtvny Boston I didn’t deal directly with them, I made offers through the REA
Jason Mike: In terms of Asset Protection do you avoid LLC’s and instead rely upon Land Trusts, High Liability Insurance Coverage and an Umbrella Policy?
Mike_Summey Broadway, the house I described above was ultimately purchased for $67,000 when originally we had offered $94,000. But that’s another story.
broadway Mike, great deal in the end!!! That also shows how patient and perserving you have to be to get the great deals too.
gtvny I just want to say I almost purchased a home that I was going to rehab, however my Prop mgr told me to check iwht the town first to see if I could convert it the way I wanted to and since it was in a flood zone I could not. He saved me!
Mike_Summey Jason, forget the Land Trusts. that is a gimmick a lot of speakers are trying to seel that don’t really do much for you. As I said earlier, I use the LLCs for estate planning purposes and rely of good insurance for liability protection.
Roger Dawson Jason, my understanding of a land trust is that the seller keeps title to the propery until the buyer has finished paying for it. Usually only used by developers and subdividers of rural or desert properties. Not a good idea for us.
gtvny I would have been stuck with a disjointed 3 BR instead of 2 2BR’s, loss of $600 projected per month.
nspollard thanks
Mike_Summey Charlie, what are you doing Wed & Thur? I may come down to look at some more properties if you are available.
Roger Dawson Mike, I thought you owned everything already!
broadway Mike and Roger, thank you for another super hour of great advice. Mike, you need to finish that story next month on how you got the house for $67k from a $97k offer!! Hope everyone has an outstanding month and a terrific evening tonight!! Goodnight to all!!!
CHARLIE Call me tomorrow either day is good for me
Mike_Summey Roger, I don’t want to own everything, just that which is next to mine.
Roger Dawson Good night Broadway
chase it was a very informative first chat for me. Thank you very much for the opportunity to join in.
Boston1 Thank you Mike and Roger!!
Boston1 all the best & happy thanksgiving
gimmecoffee muchas gracias, everyone!
Jason Roger: I think you may be thinking about Land Contracts, but I’m not completely sure. I do know that in a Land Contract, Agreement for Deed, or an Installment Land Contract the seller or preferably an escrow company holds the deed until the contract is satisfied.
gimmecoffee Mike_Summey –Your offer generator looks interesting.
Mike_Summey Hi Laura, your late, we’re just about to wrap up for tonight.
Laura Hello everybody! I can’t believe I did it. I tryed few times
Roger Dawson Thanks Jason
Mike_Summey gimmiecoffee, I use it on every offer I make. It’s great! Just ask Charlie!
Laura Oh… I am late.( Next time will be better
Mike_Summey Laura, where are you from?
Laura Ak
Laura nchorage
Jason Thanks Roger & Mike for great information – I took some good notes!
Mike_Summey Laura, the chats start at 7:00 PM your time.
nspollard see you all next time
Laura But I was reading books, chuts and have OG
Laura Yes, thank you. I will be
gimmecoffee Mike_Summey – i’ll get it! thanks.
CHARLIE Gimmiecoffee mike does use it i have watched him make seven offers in alabama in a 20 min. Time frame
Mike_Summey Laura, sorry about that, the chats start at 4:00 or 5:00 your time.
Laura I see
Roger Dawson Laura: you better check that. It may be 4.00 your time. It’s 5-00 in California
Roger Dawson Good night everyone!
Laura I was born in Soviet Union… It is difficult to me
gtvny Thanks Roger and Mike, great information again!
Laura Good night!
chase Good night
CHARLIE Good night all
Mike_Summey Laura, just be sure to get it right next month. I look forward to talking with you.
Laura Thank you!
Mike_Summey Goodnight all! See you here December 5th.

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