Weekend Millionaire » Chat Transcripts

Final Chat Transcript – December 5, 2011

Mike — Tue, 06 Dec 2011 19:56:54 +0000

nspollard what’s up Stanley?
stanley This day, how are you nspallard?
nspollard great getting lots of things done
nspollard waiting for the chat to start
stanley Yea I’m a bit everywhere myself. This is my first chat though, how about you?
nspollard my second
nspollard I’m in Georgia, I’m a realtor and auctioneer
nspollard and real estate investor too!
stanley Hmm, I’m in Maryland. I’m real estate investor, life coach and a published poet.
nspollard my early life was enjoyable in Baltimore and Virginia Beach
stanley What made you leave?
nspollard my mother and father divorced, and my mother brought me and my sisters here
nspollard I joined the Navy and came back and settled here
stanley Do you like it in Georgia?
stanley I must say thanks for the service of this country!
stanley I have quite a few people I know leaving Maryland for Georgia.
nspollard thanks and yes and no
nspollard the weathers fine
nspollard but I want to get away from so many people
stanley lol And you’re welcome.
stanley Why is that?
nspollard It’s crowded and I want to do a little hunting and fishing later in my life
nspollard but I do think many northerners will move to Georgia to retire
stanley Do you live in a specific city or is the whole place crowded?
stanley I also agree with you that they will.
nspollard I live about 17 miles from Atlanta in a small town called Duluth
nspollard Duluth and Norcross are my farm
stanley Oh okay, I’ve never been but I hear good things.
Cuti Hi
stanley Welcome Cuti!
Cuti It is my first time…
Cuti It is my first time
nspollard that was quick
stanley lol very quick!
nspollard hi Cuti
Cuti1 hi
nspollard ok hi cuti1
Cuti1 It is my first time. Good evening everyone
Mike_Summey Hi everyone. We’re a bit early.
Mike_Summey Hi Cuti1
stanley Hey there Mike! Nice to meet you!
nspollard Hi Mike
Mike_Summey I’m here a bit early, so if you have any questions for me now is the time to get them answered before we get too busy.
Cuti1 Hi everyone, nice to meet all of you…
Mike_Summey Hi Stanley & nspollard
Mike_Summey Cuti1, where are you from?
stanley Same here Cuti1
Cuti1 I live in San Jose, but I’m investing in Sacramento.
Mike_Summey Any you too, Stanley & nspollard?
stanley I’m in Maryland
Cuti1 Mike, what do you think about buying old houses between 1960 and 1970
nspollard Duluth, Georgia
Mike_Summey uti1, just be careful about lead paint and asbestos. Personally I think you would be better off sticking to ones built after 1978.
stanley Are there any specific resource you use for contracts?
Cuti1 I bought four houses, two of them are 1979 and two of them are 1989, but I see a great deal if I buy the house in 60-79….
Mike_Summey I just clsoed last week on #50 in the past 24 months. Got another one under contract today.
Mike_Summey Hi rich
rich Hello Mike
nspollard Mike my threshold count is 56 so far
stanley Hey Rich!
Mike_Summey Cuti1, as I said, just be careful. I’d advise having an inspection for lead pait & asbestos done before buying ones that old. There might be a good reason why you can buy them so cheap.
Cuti1 Thanks..
rich Hi stanley
Mike_Summey nspollard, that’s awesome!
Cuti1 nspollard, it is amazing. How long does you invest?
Mike_Summey I like it when we get new people in for the first time.
stanley I’m still kind of new to real estate investing, what bit of advice would you give me?
nspollard Cuti1 I’m brand new
Mike_Summey Cuti1, I’ve been at it for over 40 years and have never sold a property I have purchased.
Cuti1 I just started 2010
Mike_Summey Hi Carleton, glad you could join us.
Mike_Summey Hi Stan
nspollard yeah
stanley Hi Carleton
Stan Hey Mike, Carleton
stanley Hey Stan
Cuti1 Hi Carleton
Stan Hello
Carleton_Sheets Thanks, Mike. This being the final worldwide chat, I wouildn’t want to miss it.
Mike_Summey We should have several more joining us shortly.
Jan-Erik Good evening all
Mike_Summey Hi Jan-Erik
stanley Hey Jan-Erik
Carleton_Sheets I’d love to know where everyone is from.
stanley Maryland
Jan-Erik Williamsburg, VA
nspollard what’s the best way to invest with little or no money down?
Stan Mike, I have good credit and a good job, but I currently rent. I don’t have much cash, so I was wondering the best way to get cash to make offers on REOs
rich Salt Lake city Utah
Carleton_Sheets Stan, what about making an offer on a home owned by a motivated seller and trying a lease with option to buy.
nspollard Duluth Georgia
Mike_Summey Stan, when I started, I didn’t ahve much cash either so I had to make offers that would work for me if one got accepted. It took me nearly a year before I found a seller willing to sell the way I wanted to buy. This is a numbers game and it requires patience, but once you get started it is very exciting and very rewarding.
stanley Hi TT
Mike_Summey Carleton, good answer. See everyone, thats why I asked him to join us tonight.
Mike_Summey Hi TT
TT Hi Guys. I’m just glad to be here!
Stan Ok, I am a member of a credit union and they will finance 90 LTV, if a get pre approved for a loan will that be the same thing as cash offer
Mike_Summey Hi Joshua
Joshua Hi Mike
Carleton_Sheets Take advantage of a situation where investors are buying REO’s and looking to make a profit. This approach might work with them. It would with me and I am buying REO’s frequently.
stanley Hey Joshua
Carleton_Sheets Stan, yes!
Stan Ok great, thanks Carleton
Mike_Summey Stan, its not the same as a cash offer, but close. Anytime you make an offer subject to financing, it is not quite as strong as a cash offer with no contingencies.
Joshua Mike, how’s business going?
Carleton_Sheets Mike’s right. Although if you have pre-approval it is largely the same.
Mike_Summey Joshua, very good. There are more deals on the market right now than I have ever seen.
Mike_Summey Hi Dena
stanley What’s the most successful tactic you’ve used when purchasing?
Dena hello
stanley Hi Dena
Joshua Mike, glad to hear. I just closed my 3rd for 2011. Would like for it to have been 4 or 5, but just been too busy with work, school, etc
stanley Good Job Joshua!
Mike_Summey Stanley, fortunately I am now in a position where I can make cash offers without any contingencies. I find that to be the most successful tactic. I had an offer accepted that was $11,000 less than another offer that was subject to financing. Plus, I can close on an all cash offer in a week if I have too.
stanley Thanks!
stanley I’m still kind of new to real estate investing, what bit of advice would you give me?
Mike_Summey That’s great Joshua. Imagine where you will be in 10 years if you can ONLY buy 3 per year.
Stan Mike or Carleton, if I am pre approve for a loan what do you think is the shortest time I could close a deal in?
Joshua My banks are starting to pull their financing, so I may be up a creek until I can find more banks willing to do loans.
Mike_Summey stanley….be patient! Don’t rush into a deal just so you can say you’ve made one.
Carleton_Sheets Stanley, picking up on something Mike said, be patient. Get to know your area geographically and look at many many homes until you feel you know value. Then start making offers. Do this for 6 months to a year and you’ll be a pro.
stanley Thanks Mike and Carleton!
Joshua Once CU I was using is up against their cap on commercial loans, backed by SFH collateral. Essentially they need to finance more true commercial properties before they’ll let me do another home.
Carleton_Sheets Stan, even after getting an offer accepted, it would be rare to close in less than two weeks.
Stan Thanks that at least gives me a time frame
Mike_Summey Joshua, try to open relationships with several banks. They are businesses just like any other business and they have their up and downs too. You don’t want to be locked into just one bank because you will have to ride their wave, not yours. Theirs may be going down when you want to go up and up when you want to go down. Having several is best.
Carleton_Sheets Excellent advice from Mike.
stanley What sort of contracts do you uses when purchasing?
Mike_Summey I have an announcement that I wil make in 15 minutes.
Carleton_Sheets Someone once told me that bankers tactics and attitudes are like bankers noses. they all have one and they are all different. I’ve never forgotten that.
stanley Hi Tony
Joshua Mike, completely agree. It’s been very hard to find any. I buy cash and then get a note on it after rehabbed and leased. Most banks willing to do this will only loan 60-70% of LOWER of ARV OR my cost. This uses up all my cash.
Stan Mike or Carleton, do you think I would be better off getting pre approve for a loan or trying to get a owner to lease option
Mike_Summey stanley, I use the standard contracts for the state in which I’m buying. I used to try to customize the contracts, but under today’s market conditions, the standard contracts work jsut fine.
Mike_Summey Hi Tony
Tony Hi everybody
Mike_Summey Joshua, don’t tell them what you paid for it. Use the appraised values.
Carleton_Sheets Stan, no reason not to try both.
Mike_Summey Stan, I agree with Carleton
Stan Ok thanks
Mike_Summey Stan, keep your options open and numerous.
Dena We are losing a renter in 6 months.. she is getting a habitat home. yeah .. so we have plenty of time to look for a good renter.. we usually just stick a sign in the yard, and get lots of people. is there a better way to get “good” renters?
nspollard my investors use creigs list
Cuti1 You could use craiglist or postlet/vflyer
Carleton_Sheets Dena, let your renter help you find one and you could afford to pay handsomely for him/her doing that. I pay as much as $500-1,000.
Mike_Summey Dena, I don’t know. I’ve never talked to a potential renter. I use professional property managers and have done so since my first purchase. I want to be an investor, not take on a second job that is full of headaches and pays very little.
Carleton_Sheets Amen!
Stan Mike I know you don’t like HOA, but it seems a lot of the newer houses have at least a small HOA fee. do you avoid these neigborhoods
Dena i am going to do that someday…. when i get old and tired of dealing with renters.
Dena I do love working on the houses and yard now though.
Carleton_Sheets Stan, I avoid condos now but a neighborhood HGOA hasnever caused me a problem. Mike….?
Carleton_Sheets HOA
Mike_Summey Stan, if it is a HOA that is only collecting fees to maintain roads in the development, that not as bad as full HOAs that want to dictate what can be done in the neighborhood.
Joshua Mike, the banks pull records when the title company does their due diligence and see that I have purchased it in the past 60-90 days or so. I don’t see a way around it?
Mike_Summey Hi Wayne
stanley What is the best way to find a property outside of just driving around and using the internet?
Stan Ok thanks guys
Wayne Hi Mike sorry I,m late.
stanley Hi Wayne
Wayne Hi Stanley
stanley Hi Charlie
nspollard find a realtor you works with investors
Carleton_Sheets Stanly, a good Realtor, underline good.
CHARLIE Hi everybody
Carleton_Sheets Hi Charlie!
Mike_Summey Joshua, I’ve asked my banks why they only want to loan me 70-80% of the purchase price when I buy at 60-70% of appraised value, but they are willing to loan someone who pays full price 80% of the appraisal when it may be several thousand dollars more than what they want to loan me. They can’t answer that questions.
Mike_Summey Hi Charlie
Wayne Hi Charlie!
Stan Mike, I am a new investor and want to buy my first house like the offer generator suggests, when putting offers in on REOs if I put a time limit on the offer will the bank pay that any attention. I need something to get me off the hook so I can put offers in on other properties the following week or so
Mike_Summey Stanley, a good Realtor is invaluable. Charlie, who just joined us finds properties for me. He can answer a lot of your questions.
Carleton_Sheets Mike, don’t you think in your scenerio, that the 80% person will live in thehome?
Mike_Summey Hi Penny
stanley Hey Penny
Wayne Hi Penny!
Penny Hello Mike, Stanely, Wayne and everyone!
Carleton_Sheets ….and hello Penny
Joshua Mike, I’ve asked the same thing. They don’t give me a good answer either, but they still won’t loan on ARV.
CHARLIE Stan if you put a time limit on the offer and you donet get a responce the offer is dead unless you want to revisit at a later time
Penny hi there Carleton,
stanley Have you had any problems with asset protection?
Penny hope everyone is well.
TT Mike, are you now finding opportunities in Buncombe County, and where do you see that area in the cycle?
CHARLIE HEY PENNY
Mike_Summey Stan, why not put a clause in the offers that reads, “This is one of multiple offers being submitted simultaneously. Buyer is an investor looking to purchase one property and will close on the firs offer that is returned accepted. Once an offer has been accepted, buyer has no obligation to close on any subsequently accepted offer.”
stanley Thanks Mike and Carleton
Mike_Summey Stanley, no I haven’t.
Penny Hi Charlie, feel like I know you through Mike.
Stan That sounds great Mike
CHARLIE Penny thanks we work well together, have question ask
stanley What should I do to avoid problems also?
Mike_Summey TT, I haven’t found anything in Buncombe County in several years. The market here is still way over heated and it will be some time before things come back to reality. That’ just my opinion.
Penny Not an investor Charlie–other than my own home—ust an innocent bystander
Mike_Summey I said earlier that I would have an announcement about this time.
stanley Yes Mike?
Tony I have a couple houses I need to replace the existing older furnaces and ac in. Is it worth upgrading to a 90 – 92% eff furnace to help offset the tennents gas bills ? Or is installing a cheaper 80% good enough ?
Mike_Summey Roger Dawson & I have decided it is time for us to retire and focus on our own investments. This will be our last online chat. We have been hosting these free chats for 10 years and like all other good things, it is time to bring it to an end. We have never charged a fee to participate, and have not used our subscriber list to peddle our products. We have truely enjoyed helping people and hope all of you and all of the rest of our subscribers take advantage of the wonderful opportunities the current times have provided.
Carleton_Sheets Tony, what is the differenc in hard costs and what will the savings be?
Mike_Summey Tony, that is your call. Is the warranty any better on one versus the other.
Stan Mike that is sad news, but I appreciate all you have done.
Dena that is sad news.
stanley Wow, my first is the last. I do want to thank you for the opportunity to be here. I wish you well on all that life brings.
Mike_Summey Everyone, I hope you will all take advantage of the great half price sale we have going in our online store. We still have a few remaining products to sell.
Dena Mike, i loved your newspaper articles a few years back…. do you have a book with those included?
Mike_Summey Hi krspack
Penny It is an appropriate time of year for your annoucement Mike and Roger. Just want you both to know the chats have been so appreciated.
Carleton_Sheets Amen to all that Mike has said. And with that I must say good night to all you folks that I will probably never meet but wishing you the greatest of good fortune, and in the case of Mike, I cherish our life-long relationship. See you soon, Mike! And best to you, Penny!!
krspack1 Hey Mike. Sorry am late. Had trouble signing in. What is the announcement?
Mike_Summey Dena, I do, but it is currently sitting on the shelf waiting for the publishing market to rebound. It has much more than just the articles.
Penny ditto Carleton. Have a wonderful new year. !
Dena what is it going to be called… do you know yet?
TT I will also say that I loved the newspaper asrticles. I remember many of the advice given in those articles, and i have tried to impart them to friends but as they say you can lead a horse to water…
nspollard Thank you, merry christmas everyone
Dena i really, really thought those articles were wonderful
Stan Mike where do you suggest we get advice, you have walked through the mine field and you can kinda direct us where to step and not step
Mike_Summey krspack, the announcement is that this is our last chat. Roger and I have decided it is time to retire. After all, we are both getting OLD!
Mike_Summey Thanks Dena and TT
krspack1 Mike, I understand. The chats have been great. I mostly find myself reading the transcripts. Will your website stay active will all of the archives?
Mike_Summey Stan, everything you need to know is contained in our books, audio programs and computer program. We have held these chats as a way of giving moral support to our readers.
Mike_Summey krspack, we are looking into that.
Stan MIke thanks for everything and all your time
krspack1 Mike, I am assuming your email address will remain active as well?
Dena it was very good of you guys to give you time doing this. it is a wonderful way for people to be financially successful.. i appreciate your time
Tony I did not get a chance to ask Carleton Sheets if he is still buying real estate ? You do not see him on TV anymore !
Mike_Summey I wish Roger could have been with us to say his goodbyes, but he is in China. When he returns, we will discuss the possibility of having one more chat near the end of the month, but I can’t give you a definite answer on doing that at this time.
Penny Thanks again Mike and Roger for all the helpful tips and for truely caring for your fellow investors. I hope the future years provide much wealth and happiness for eveyone that has participated in this chat over the last 10 years. Goodnight all. May your season be bright and your New Year be filled with Magic. Penny
Mike_Summey Tony, Carleton, like Roger and I is not getting any younger, but I can tell you he is still actively buying. We discuss our acquisitions on a regular basis.
krspack1 Mike, thanks again for your support.
krspack1 Charlie, thanks for your input as well
CHARLIE Everybody it has been a good time answer question for all of you. Hope my answers helped you
Tony I love it. Gurus who are doing the business. Mike – do you have a goal of how many houses you want to retire holding ?
Mike_Summey If any of you don’t have the Offer Generator, get it by the end of the month. Don’t worry about whether or not you are computer literate enough to use it. Every step in the process has pop-up help screens that tell you what to do. Just place the cursor on the label and it will appear. It is really a great program.
krspack1 Mike, just checked on my order for OG tonight. Looks like it takes 5 business days for funds to transfer into Paypal. Sorry about the delay.
Mike_Summey Tony, my sons are now in the business with me and helping to gorw our portfolio. Someone asked me a few days ago how many we wanted to buy and I told them as many as we could find that would make money. I guess that’s my answer.
Mike_Summey krspack, it will ship as soon as we get notice. Thanks for the order.
krspack1 Mike, thank you
Tony Are all of your buys owner financed ?
Mike_Summey Tony, none of them are at this time, but I have had several in the past.
Tony Do you use private money investors ?
Mike_Summey I started another company with my two sons two years ago and we have purchased 50 properties since that time. I think they will continue to buy and will probably do much better in the long run that I have done…at least I hope so.
Mike_Summey Tony, no I have always used either seller financing or bank financing.
krspack1 Mike, the chat transcripts alone are valuable. It would be great if someone could bundle them together and make them available via download.
Mike_Summey krspack, great idea. I’ll look into that.
Stan Mike, If i use a heloc to buy a house should i use the interst rate on the heloc on the OG or the interest i would get when i get it refianced
krspack1 Mike, thanks again and hope to meet you sometime in the future. I am in Spruce Pine often and if you ever find yourself coming to Charleston, SC, I would love to know about it.
Mike_Summey Stan, use the rate of return you want to get on the deal. It should be a bit more than just the interest rate.
Stan ok
Mike_Summey krspack, what do you do in Spruce Pine?
krspack1 vacation, actually in Bakersville
krspack1 Mike, we were up there the weekend of Thanksgiving
Mike_Summey krspack, you mush have a vacation home there.
krspack1 Mike, love it up there
Mike_Summey must
stanley At this early stage, is it best to just get bank financing for every property?
krspack1 Mike, actually a good friend of mine has a home there
krspack1 Mike, vacation home
krspack1 Mike, I can not justify a vacation home in NC mtns at this point in my career
krspack1 Mike, but I can justify using one if available
Dena Bye guys, hope things go well for you… thank you,dena
stanley You too Dena
krspack1 Mike, when you get a chance, check your facebook page. Just sent a picture of us at Springmaid mountain in Spruce Pine
Mike_Summey stanley, if you are just getting started, you should at least ask for seller financing whenever possible. I’ve bought several properties where the seller had a small mortage and a large equity. I would make them an offer with enough eash to get them out of the mortgage and then aske them to carry a second for the balance. It is not hard to get a 20-30% loan when you can give the bank a 1st mortgage and then have the seller finance the balance. When that happens, the bank actually has two borrowers, you and the seller because the seller is not going to lose their second to a bank foreclosuer on a small second, plus the seller got the money for the first at the clsoing.
Mike_Summey Goodnight Dena! Thanks for joining us tonight.
Jan-Erik Thanks Mike (and Roger). Best Wishes on your next steps!
CHARLIE It has been fun and real happy investing in the future all
Mike_Summey Well, as they say ALL GOOD THINGS MUST COME TO AND END! It is now 9:00 PM and I will be signing off for the last time. Goodnight everyone. See you in the next life.
stanley You too Charlie!
stanley Goodnight!
krspack1 Mike, thanks and have a great night
rich Best of luck
CHARLIE Mike & roger thanks for your time once a month. It has been a great help. Best wishes in the future.

Chat Transcript – November 7, 2011

Mike — Tue, 08 Nov 2011 14:43:36 +0000

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.
CHARLIE HEY ROGER
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
Mike_Summey EVERYONE: DON’T FORGET TO CHECK OUT OUR ONLINE STORE AFTER THE CHAT. WE JUST REDUCED EVERY ITEM IN THE STORE BY 50% FROM NOW TIL YEAR END WHILE SUPPLIES LAST. THAT’S A SALE LIKE WE’VE NEVER HAD. TRYING TO CLEAR OUT EXISTING INVENTORY BY YEAR END.
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
Mike_Summey EVERYONE, BE SURE TO CHECK OUT THE SPECIALS IN THE ONLINE STORE!
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.

Chat Transcript – October 3, 2011

Mike — Tue, 04 Oct 2011 14:34:45 +0000

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.
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! 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!!!!
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
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

Chat Transcript – September 12, 2011

Mike — Wed, 14 Sep 2011 19:39:44 +0000

electricianhoward hi
Bill Have you been to the chat room before?
BozoB yes, I have.
BozoB you?
Bill This is all new to me
BozoB Well, welcome.
BozoB Where are you from?
Bill I am from Orlando
BozoB nice. May i ask what the real estate market is like there?
BozoB Howard, where are you from?
Bill Still slow too many people thought it would go up forever
BozoB btw, I’m from Hawaii.
electricianhoward from toronto
BozoB I see. Have you purchased any property?
Bill Do we hear anything @ 8 or does Mike type also?
BozoB mike types also
Bill I don’t need my volume up loud then
BozoB naw. It will alert you when someone arrives to the room, but all conversation is done through the keyboard
BozoB Hello Matt
matt how you doing?
BozoB Always great. How are you?
BozoB JE, Hello there
matt can’t complain either.
Jan-Erik Hello
BozoB How’s it going with the investing?
BozoB Hello Mike
Mike_Summey Hi everyone
matt hi mike
electricianhoward hi
Mike_Summey Who is the Matt
Mike_Summey Hi Jeff
BozoB Hi Jeff
matt new to yoou website and forum. thought i would listen in
BozoB Matt, it’s more productive if you participate
Mike_Summey Welcome Matt. I just wanted to be sure you weren’t my son Matt who is in Iraq, but can occasionally get online.
matt you are right. i will be participating
matt no afraid not. coming to you live from mt. shasta california
Jeff M. It’s been a while since I last was on, but I’m looking forward to getting going now. I’m in Asheville.
Mike_Summey My son Matt just arrived at a base North of Bagdad today. He is the commanding officer of a company of Apache helicopters.
BozoB wow. Please thank him for his service next chance you get
Mike_Summey Will do!
Mike_Summey Hi gpllc
gpllc evenin all
Mike_Summey anyone have any good question ready for me tonight?
matt i do. but give me a sec because it wil take some time to write
Mike_Summey Just to let you know that the market is still wonderful for investors, I closed on 5 new properties last month.
Mike_Summey Hi Wayne
Mike_Summey That make 50 in just over 2 years.
Wayne Hi Mike
BozoB wow.
Jeff M. Mike, what’s the current climate with banks for new investors?
BozoB Hi Roger
Wayne Hi Roger
Mike_Summey The rental market is doing great too. I have the lowest vacancy rate I’ve had in many years.
Mike_Summey Hi Roger
BozoB Hi Trav
Mike_Summey Jeff, it is still tough for “new” investors unless you have some good cash reserves.
Trav Hey Bozo, Mike,and Roger
ROGER DAWSON Good evening everyone!
BozoB Mike, isn’t that always going to be the case/
Mike_Summey Hi Trav & nickg
Mike_Summey Bozo, yes it is. The days of get-rich-quick schemes in real estate are over. Banks have been burned so badly I don’t think they will forget for a long time.
Jeff M. What about if you have good cash reserves, but are trying to establish credibility with the banks for your first deal?
BozoB Honestly, I’m glad because get rich quick was also get poor quicker as well
ROGER DAWSON But Mike, what are they going to do with all those deposits?
Mike_Summey Jeff, do you have enough to make a purchase for all cash and then finance it later to get your cash out?
Jeff M. Yes, potentially, that’s actually what my wife was suggesting we do.
matt here goes: so my brother and i are interested in getting going in the reno, nv aquiring single-family homes. we have a line of credit set up with a floating 5% rate that has to be re-serviced every 12 months. we have to use this as a bridge loan for another three years until both our incomes will service the debt. by doing the numbers in our area, the numbers cash flow easily as is. but with the possibility of interest rates to hike in the coming years, it could stick us in a hard position. with a fixed-rate loan we would have no problem. so my question to you is looking forward at the general economy and interest rates in 2-3 years, do you think we should tread carefully with the loc?
Mike_Summey Bozo, the get-rich-quick coin has two sides. the other side is go-broke-fast!
Mike_Summey Roger, deposit the money with the banks that are loaning the money. Consider the difference on what they pay you and what you pay them as the premium on insurance that you will always be able to service your obligations.
Mike_Summey Matt, do you have our Offer Generator computer program?
matt no but i have taken a look at it.
matt i have built my own simple one that i can re-calculate interest rates on overall cash flow
Mike_Summey Matt, I use the OG to calculate my purchase offers. It assures me that my purchases will cash flow from the beginning. Then I use a type financing that few people consider. It is Fixed Payment Floating Rate. My loans are all 5 year loans with a fixed payment for the full five years. That allows me to know what my cash flow will be. The rate floats with prime, although not I am having to agree to prime with a floor and a cap. Floors of 4-5% and caps of 7-8% Personally, I’ve used this type financing for over 30 years and I’m convinced it has resulted in me paying less interest that I would have paid with a fixed rate loan.
Mike_Summey electricianhoward, you’re being awful quiet!
BozoB lol
electricianhoward i am in canada, totally different market.
ROGER DAWSON Mike an investor was telling me yesterday about being limited on the amount of loans he can get. Is that a problem for you?
matt interesting. thanks mike.
Mike_Summey electrician, where in Canada?
electricianhoward toronto
electricianhoward super hot. no cash flow
Mike_Summey Roger, that investor was talking about conventional loans that are sold on the secondary market. There is no limit on portfolio loans that banks are going to hold in their own portfolio.
BozoB As a borrower, do we have to concern ourselves with those things?
BozoB like knowing whether or not it will be sold or held?
Mike_Summey electrician, have you ever tried making offers asking for seller financing at very low or 0% interest. I’ve purchase several properties that were financed that way. It is a way to make the numbers work when they won’t with conventional financing.
Mike_Summey Bozo, the number used to be 10, but I think it is now back to 4-5. Just ask you bank before applying for a loan. If your credit is good and you have good cash reserves, the bank probably won’t mind keeping the loan.
BozoB In my current situation, I will probably have to stick with owner financing
BozoB But, I recently heard that there was a bill that would require owners/sellers to qualify buyers just as a commercial lender would need to do.
BozoB Have you heard anything about this?
Bill Could you explain the 10 and now 4-5 a little more please?
ROGER DAWSON That sounds like socialism to me BozoB
Mike_Summey I will be looking at 3 new properties tomorrow. I will probably make offers on all of them. the only way to grow in this business is to keep making offers. My last several have been rejected and one was pulled because someone else beat me to it.
BozoB Roger, indeed it does. It also seems to be a huge preventer from those of us with less than good credit histories
Mike_Summey Bozo, I’ve never heard of that. If you own a property free and clear and want to sell it to me and carry the financing, there is no law that says you can’t. What you may be talking about is the movement in several states to prevent sellers from carrying financing in a wrap around mortgage where the first mortgage is still in place. Many people have been burned in this type transaction because if the seller defaults on the first mortgage the buyer loses everything when the property is foreclosed.
matt mike, if your strategy is buy and hold, do you have a general guideline about the age of the properties?
nickg Hi Roger. I am going through a chapter 7 right now, and expecting discharge in about a week. So my credit is going to be in the dumpster for a long time. But I have stable work history, good compensation and am starting to save cash. Am I just out of luck as far as investing in real estate, or do I have options?
ROGER DAWSON Every so often we hear about speakers who have found a way to wrap underlying loans. OUr advice is clear. Don’t do it. YOu will get burned.
nickg (my question could go to either Roger or Mike)
Mike_Summey Bill, VA, FHA and qualifying conventional loans are sold on the secondary market. There is a limit to the number of these type loans an investor can obtain because they are loans to what are considered passive investors. Once you exceed the number, you are no longer considered a passive investor and your loans, no matter how small, are considered commercial loans that are usually held in the banks own portfolio of investments.
ROGER DAWSON Mike if nickg limited to seller financing? Or does he have other options.
Mike_Summey Matt, I try to stick to properties less than 25 years old unless the property is in exceptional condition and has no problem with lead paint, asbestos, etc.
matt got ya
matt thanks
gpllc Mike, is there a price range you also go for? Or do you just judge everything on the OG calculation?
BozoB Nick, if you’d be ok with it, can you share any anwers you find for yourself?
electricianhoward in toronto, the market is super hot, intest is 2.35%, people is bidding, like states before the crasn. do you have any advice for me?
Mike_Summey nickg, one technique I’ve used in the past is to combine a small first mortgage at a bank with a larger second mortgage with a seller. Right now, many sellers are to sell and will consider unsual financing arrangements. Let’s say a seller has a $100,000 property that they own $25,000 on but are making payment based on an original loan of $80,000. This seller may be willing to accept $25,000 to pay off the first mortgage and carry the balance themselves. Even with bad credit, you may be able to get a $25,000 bank loan and let the seller carry the balance. That eliminates the payment the seller was making and the bank has a 25% loan to value first mortgage.
Mike_Summey Hi drew21
drewr21 Hi Mike
matt what have you found with reo’s and how far below asking price the bank will take. in my neck of the woods it completely varies, sometimes they bite at something that is 10-20% below asking price and other times they are firm. what are you seeing?
Mike_Summey gpllc, I stick with properties I can buy in a manner that will allow me to rent them in the mid range of the rental market. Prices vary based on the structure of the deal.
Trav Mike, what are the mid range of rents in asheville
gpllc I see, you target your rent and then run the numbers. Do you have a target NOI range, if so what is it?
drewr21 I currently live in a house with two close friends, and have been wondering if I would be able to secure a larger loan with a lender based on having two signed leases in hand. Any thoughts?
Mike_Summey electrician, make offers, lots of them, that will work for you if accepted. If none are accepted that is the best indicator that the market is over heated. However, if one is accepted you can rest assured that it will make money for you in the future. Use our Offer Generator to compute these offers. It will prompt you if you create an offer that will not cash flow.
drewr21 *I am currently renting.
Mike_Summey Trav, $700 – $1200
Trav ok thanks
electricianhoward thanks
ROGER DAWSON I’m always amazed to find how different the ratio of rents to purchase price is. in some town properties sell for 130 times the monthly rent. Other towns it may be only 80 times the monthly rent.
Mike_Summey Drew, probably not. Until you have been at it a while and have a track record, the banks are probably going to underwrite you loan as though you were going to have to pay it all by yourself.
Trav Mike on that info what is the highest price I should be looking at in the asheville area…like a foreclosure
drewr21 I figured as much, but I don’t have the means to acquire a property in my area (Seattle Metro) right now.
drewr21 Thank you.
drewr21 (By traditional financing, at least.)
Bill Roger with the different ratios how do you spot a “Deal ” if it is so different from town to town?
Mike_Summey Trav, forget about price! If you find a property that produces $1,000 NOI, you could pay $180,000 at 0% interest, but only $118,500 at 6% interest. That’s why I recommend the Offer Generator for everyone. It does all these calculations for you as you enter the data you are prompted to enter. You can easily compute 50 different ways to buy any given property.
Mike_Summey The Offer Generator is the best tool I’ve ever used to calculate offers. You never know what a seller will do until you ask and the way to ask is with a written offer. Between a low all cash offer and a high seller finance offer at 0% financing, there are literally hundres of options c
Mike_Summey that can fit the needs of many sellers.
ROGER DAWSON Bill, in our book we go through how to calculate the cost of repairs, figure the net income and deduct maintenance, insurance, taxes, utilities and management. That gives you the amount of your cash flow, which is how you figure out how much you can afford to offer. Don’t make an offer until you have run the numbers!
ROGER DAWSON Hi Penny!
BozoB Hi Penny
Mike_Summey Roger, that is what I was saying earlier. The Offer Generator does all these calculation for you.
Mike_Summey Hi Penny
Penny Hi Roger!
BozoB welcome back
Mike_Summey Having problems Penny?
Penny oops..hello everyone
Penny fingers typeing to fast make for quick exit on computer keyboard
Penny typing too fast
BozoB What is the most reliable way to find out the market rents for an area?
BozoB that is pretty much where all calculations begin right?
BozoB lol
Mike_Summey I’ve known Roger for nearly 30 years. He can tell you that I’ve been doing things the same way for as long as he has known me. When none of my offers are accepted, it is the best possible indication that the market is overheated. When offers start being accepted it is also an indication that things are coming back to reality. In 40 years of investing, I’ve never had a down year or bought an property I lost money on. Something to be said for a record like that.
ROGER DAWSON Ask a property manager. They are happy to talk to a potential investor.
BozoB Thanks Roger!
BozoB what are the first 3 pieces of information you need to know when you are doing your research? In your opinion
ROGER DAWSON I think that a great deal of Mike’s success is that he’s a brilliant number guy. He doesn’t get emotionally involved in the purchase – he runs the numbers.
nickg Mike, on your recommendation re options for financing for someone with bankruptcy….roughly what interest rate should I expect for the bank loan?
Trav Mike, I use 1200 a month rent on the OG and get around 95k with nothing down and no closing cost or repairs..guess I am over estimating on the other expenses
Mike_Summey Bozo, Roger is right. Talk to a professional property manager in the area to get information on rental rates.
Mike_Summey Trav, that sounds about right.
BozoB Trav, I would think that would depend entirely on the property
BozoB is that not so?
Trav ok thanks
Trav thats at 6 percent 15 yr fixed
Mike_Summey Bozo, rental rates for similar properties, the amount of repairs needed to put the property in marketable condition and the rate at which you can get money.
BozoB Excellent! Thanks Mike!
BozoB that is very helpful
Mike_Summey Trav, see the three things I just told Bozo and apply that to your calculations and see what you get.
ROGER DAWSON Good night everone! Good investing!
Mike_Summey Hi alphaneuf
nickg Mike, on your recommendation re options for financing for someone with bankruptcy….roughly what interest rate should I expect for the bank loan?
Trav Ya I really need to talk to a property manager
Mike_Summey nickg, I can’t give you an exact rate, but you can count on it being considerably higher that if you had good credit. The fact that you had a bankruptcy is an indication to the banks that you didn’t properly anticipate financial problems. They will want you to pay a premium for this mistake undil you can demonstrate that you have leared to handle thing.
alphaneuf Hi, Mike, my name is Albert Phaneuf. I live in New York City, am a real estate agent and an appraiser. I have your book invesdting in real estate. Great book. It helps me understand the numbers I saw in appraisal school, but did not understand
Penny signing out here as well…late to chat and early out…will try harder next month
BozoB Aloha Penny
Mike_Summey alphaneuf, thanks for the comment. If you haven’t read Weekend Millionaire Mindset, you should get it and read it. It really helps you to understand what is needed to become successful financially.
nickg Thanks Mike. Have a good week
Mike_Summey Goodnight all! See you here next month. October 3rd.
matt thanks mike
Trav Thanks Mike
BozoB Aloha everyone!
alphaneuf Hi, Mike, Al again. I will send some questions to you another time. I did get the mindset. I will read it again. I have most of your books. I am also an investor, I do it for the longterm. Thanks. Goodnight.
Bill This was fun
BozoB

Chat Transcript – August 1, 2011

Mike — Tue, 02 Aug 2011 13:49:58 +0000

BozoB Hello?
BozoB Hey Mach
mach78 Good evening
mach78 How are you doing
mach78 ?
BozoB I’m great
BozoB how are you?
mach78 Doing pretty good myself
BozoB good to hear
mach78 Last time I was an hour late
BozoB been there
BozoB lol
mach78 Got the time zones a bit mixed up
BozoB where are you from?
mach78 Brazil. You?
BozoB I’m from hawaii
mach78 Awesome
mach78 When did you get into the “Weekend Millionaire”family
BozoB I first heard of it in 04 i believe
BozoB or 05
mach78 Really??
BozoB Aloha Mike!
mach78 Hello Mike
Mike_Summey Hi everyone!
BozoB yeah, it is really expensive here and had a lot going on. haven’t been able to start yet
Mike_Summey Just logged in. I need to step away for about 1 min. Be right back.
mach78 I see
BozoB no problem
mach78 Ok, Mike
BozoB what is the investing like for you Mach?
mach78 I just finished listening to it about 2 weeks ago and I am REALLY excited
BozoB great stuff huh?
mach78 Haven’t started yet myself
mach78 It’s amazing
BozoB Mike and Roger are great guys
BozoB always helpful
mach78 I am here, tonight, to talk to them and see if it can be applied here
mach78 I bet they are
BozoB Hello laura!
mach78 Good evening Laura
Laura Hello!
BozoB Hello ksk
mach78 Hello ksk
mach78 And the community is growing
BozoB
mach78 Have you any other of their products, Bozo?
BozoB it’s been years since i been able to join a chat
Mike_Summey sorry about that. I had to go yell at my dogs for chasing a coyote in the back yard.
BozoB Hello greg
mach78 Hi Greg
BozoB Mike, good dogs. LOL
Greg Hi Bozo & Mach
Mike_Summey Hi Laura, ksk, Greg & whoever else came in while I was gone.
Greg Hi Mike!
Laura Hi Mike.
mach78 That’s just us for the moment
BozoB Hello Joshua
Mike_Summey Hi Joshua
mach78 Heelo joshua
mach78 typo
BozoB lol
BozoB uguese?
Joshua Hey everybody!
BozoB Hi Charlie
mach78 What, Bozo?
Mike_Summey I have coyotes, foxes, deer, bear and turkeys in my woods and they come out in the yard occasionally and the dogs get after them.
mach78 Hello Charlie
Mike_Summey Hi Charlie
mach78 and Tray
Mike_Summey Hi Trav
BozoB I was asking if heelo was portuguese
BozoB lol
Trav Hey Mike
CHARLIE Hey everybody
mach78 Not really. hahahaha
Laura My dogs would love to chase all those animals Mike.
mach78 More like Alo
BozoB bom dia?
mach78 That is good morning
mach78 Hello John
BozoB Hello John
Mike_Summey Charlie, did you get a call from Kristina earlier about her house?
John IL Hello
Mike_Summey Hi John & gp
gp evenin all
Mike_Summey What’s on everyone’s mind tonight?
CHARLIE Mike no i did not call me later a give me her number
mach78 Good evening gp
BozoB investing, of course
mach78 That is for sure
Laura How to find REO’s that are not listed with a realtor?
Joshua Mike, how’s the house purchasing going? Still buying several a month?
Mike_Summey Just so we’re all on the same page, if you have to sell a house to make a profit, you’re not an investor, you’re a speculator and sooner or later you will get burned.
CHARLIE Laura a good agent can find you alot of reo to look at. The banks only list there reo with agents
Laura thanks Charlie
Mike_Summey Joshua, we’re approaching 50 in the last 24 months.
BozoB wow
BozoB it truly is a snowball isn’t it?
mach78 Awsome
mach78 Awesome
John IL Anyone have any experience rehabbing an older house with (potentially) lead paint of asbestos?
Trav Mike when looking at REOs how do you check the plumbing, some of the units have the facets tape off?
John IL I found a great prospect, but it needs work, and I’m afraid of the asbestos deal.
Joshua Mike, nice work, I’m at 2 houses YTD, they take some time to get rehabbed and then leased
CHARLIE John il you can buy a test kit at lowes that will let you know if the paint has lead in it
Mike_Summey I have 6 contracts on my desk right now that were supposed to close last Friday, but the seller didn’t get them ready in time. It now looks lik they will not close until the week of Aug 15.
Mike_Summey John, I rarely look at older properties. There are too many newer ones on the market to worry with old ones.
BozoB Mike, now that you are financially free, do you still invest as if you were just starting?
John IL Mike, I knew you were going to say that! ; )
CHARLIE Mike did you get the other proposal today i sent
Mike_Summey Trav, you just have to look the best you can. sometimes you will miss something, but if it’s anything major, you can usually see it…missing water heaters, etc.
Trav OK thanks
John IL I’m a sucker for the original old properties, with their architectural details. Even if they are tore up.
Mike_Summey John, stick with houses built after 1978 & you won’t have to worry with lead paint or asbestos.
John IL I’ve found a property or two, but no takers on the offers.
Mike_Summey Bozo, I’m still doing things the same way I did 30-40 years ago. The Weekend Millionaire method of investing works all the time, not just when the market is hot.
Joshua Mike, have all of them been REO or have some of yours in the past 24 mos been “other” type of distressed sales?
mach78 Mike, I am from Brazil and I was wondering if the same principles might work here (I just finished listening to the program). Furthermore, I was wondering if the Offer Generator can be configured for different economical backgrounds
gp Would you advise selling one property (with a lot of equity) in order to get the capital to buy with cash?
Mike_Summey John, this is a business, not an art project. You have to get the emotion out of it or you will not be successful.
John IL Mike, while I have your attention, iI can’g get the OG to work on my new WIndows 7 system, so I tried my mac. No Luck there either.
Mike_Summey Hi jan-erik
Jan-Erik Good evening
mach78 John’s last question is important for me either
Mike_Summey mach78, the Weekend Millionaire principles work anywhere. The Offer Generator does as well; the only difference is you will have to do the conversions from USD to your currency. The OG computes in USD.
Greg @John: have you tried using a Windows emulator on your Mac (non Windows 7)?
Joshua John IL, Mike and I have discussed this in the past, but newer homes are great for long term rental if you can find them in non-HOA neighborhoods. Where I’m investing it’s very tough to find any newer than 1978 homes that don’t have an HOA. I would take an older home any day over a newer home with an HOA
Mike_Summey gp, why not get a loan on the property, pull out the cash and use it to buy the next one for cash, then do it all over again.
mach78 Thanks, Mike
John IL Greg, don’t know what a Windows emulator is…
gp If we refi we will get half what we will get if we sell. I’m torn between these two choices
Laura Joshua – what is HOA?
BozoB Home Owners Association
Greg @John: I’ve used Parallels … I’m sure there are others … maybe free too …
Laura Thanks
Mike_Summey John, we have had some problems loading the program on Windows 7. We tell you that on the website. It’s not with the program, it’s with the way Windows 7 loads programs. You shouldn’t have a problem with the Mac, just be sure to follow the Mac loading instructions in the cover.
mach78 Can’t I buy the Offer Generator to download from the site?
Greg @John: Windows emulator lets you run Windows programs on a Mac (Intel based) …
Mike_Summey mach78, sorry, it is only available on disc.
mach78 @ John: Boot camp is an idea
John IL Hmmm. I’ll try the mac again. I’ve had it for a while, and used it on an old compaq that’s now in the graveyard. So I tried it on the Mac, folllowed the instructions, no luck. I’ll try again…
BozoB good luck John
BozoB technology is another form of leverage
John IL Mike, do you buy ANY house that meets the OG criteria? Or do you look at other factors.?
BozoB can make it easier or more difficult LOL
Mike_Summey gp, that is a call only you can make. I’ve never sold a property so I don’t know much about selling.
Joshua Mike, have another property under contract but still waiting on the bank to decide if they’re going to fix the electrical so they can turn on utilities so I can have an inspection done…this thing is dragging out much longer than I want…
John IL Greg, where do I get the windows emulator, and is it free?
BozoB John, Google can be your best friend
BozoB
Mike_Summey John, I inspect several properties in a day and then make offers on all of them using the OG. So far, I’ve bought everything that has had an offer accepted. Charlie may want to chime in on this as I’ve bought several using him as my buyers broker.
Greg @John: type, “parallels” in Google … you’ll find them and others …
John IL In my experience, Sometime realtors don’t like to present low offers. Thanks Greg.
BozoB hello goofball
Greg @John: Shirley!
goofball hello there everyone!
BozoB Hello Mike
BozoB late again I see
BozoB lol
CHARLIE John the og works no matter what the home is listed for make the offer based on the og it works, have seen it over 20 times in 2 years
mach78 Anyone here can tell me the difference between de OG and the Carleton Sheets Real Estate Toolkit?
Greg @Charlie: good OG testimonial … I need to go check it out …
Trav Mike, when you put offers in on REOs do you put them in near the end of the banks quarters?
CHARLIE John a real estate agent has to summit all offers no mater what if one is not let his broker in charge no that he is not
mach78 @ Charlie: Same here
Mike_Summey John, go to www.stuffit.com and download the program. You need this to install the program on a Mac and it no longer comes with the operating system. You’ll find instructions with the OG in our online store.
BozoB Mach, there is a big difference
mach78 @ Bozo: can you tell me?
John IL Thanks Mike. I’ll try that.
BozoB Both are great, but the OG is prectically idiot proof. I like to say Noobie-Proof
mach78 @ Bozo: I guess I fit both categories
BozoB But, imo, Carleton Sheets toolkit has some very powerful tools
Greg @Bozo: idiot-proof … I need that …
BozoB LOLOL
goofball Mike, starting out as an investor should I go towards getting pre qualified with commerical loan (5 or more plexes) or stay with conventional loans (4plexes) and under?
Greg
Mike_Summey mach78, the two programs are completely different. The Toolkit contains, a property analyzer, property manager and real estate forms. The OG prompts you to supply the data needed to create purchase offers that will cash flow if accepted.
Mike_Summey Hi goofball
goofball Hey Mike, does that question make sense or should I reframe it?
gp What’s the max LTV you are able to borrow with the 5/15 balloon strategy you utilize? i think we should refi as you suggest, it will just limit our price range.
CHARLIE Trav mike & i have made offer beginning of quarter end of quarter does not matter, follow the property till it sels. We have made offers on property in april and offers on same property in sept. And closed them
mach78 @ Mike: And does carleton Sheets work anywhere, as well, say, in Brazil, or would I have to make some adjustments?
Trav Thanks Charlie
Mike_Summey goofball, I recommend starting with single family homes.
John IL Charlie, I guess the hardest part about the OG is determining what the potential rent would be.
BozoB Mach, I think they both work in USD. the forms on CS Toolkit will need to be looked over by an attorney
Mike_Summey gp, I don’t look at LTV, I look at the payment amount the NOI will support using 15yr amortization.
goofball even if available investment funds are to where the one can afford going bigger?
CHARLIE John that is where a local property manger can fill in these blanks
Mike_Summey mach78, I don’t think much of what is in Carleton’s program would work in Brazil.
mach78 @ Bozo: As for it being in USD, is not a problem, since I can make input the numbers and assume they are in Real (our currency)
John IL Aha. I don’t have one. I had one, didn’t trust him. Got rid of him. Haven’t been able to bring myself to get another.
BozoB right
BozoB good point
John IL I think they’re sort of hard to find. Honest ones anyway…
Mike_Summey John, I use my property managers to get that information. They know the markets better than I do so I rely on them to tell me what they can get for a property if it is ready to rent.
BozoB remember what Mike said in his material
BozoB property managers do what you inspect, not what you expect
mach78 @Bozo: What is that?
CHARLIE John you have to interview the property managers like you would a real estate agent and see there track record
mach78 @Bozo: Ohh. It makes sense
John IL Has a property manager ever lead you to a purchase?
John IL led
Mike_Summey Hi Richard
richard-dallas hello
Mike_Summey Bozo, I think I’ve heard that somewhere before. Ha!
BozoB LOL
CHARLIE John i have bought a property that property manger told me about
mach78
Mike_Summey John, I’m closing on 5 properties this month, which will make 14 that were brought to my attention by my property manager.
Joshua Mike, of your 50 purchases in past 2 yrs were all of them REO or were some “other” distressed sellers? Seems only deals I can find currently are REOs
Mike_Summey Joshua, some have been REOs, some distressed sellers, others just sellers who needed to sell.
John IL Mike, Charlie, In your experience, Big or small property mgr. Or does it matter?
BozoB what does his weight have to do with anything?
Mike_Summey John, experience & longevity in the business means more to me than size.
BozoB I see, intimidation factor
John IL Bozo, don’t quit your day job…
CHARLIE John i think the one you feel the best with after the interviews
BozoB lolol
mach78 Mike, it has been a pleasure. Thanks for all the answers. Bozo, Thank you for your time as well ans your tips. Everyone else, it was a great “listening” to all of you. I have a hospital shift to go to.
BozoB Aloha Mach
mach78 Aloha Bozo
John IL My first guy was collecting late fees, and pocketing them without my knowing..
Laura bye mach
Mike_Summey mach78, thanks for joining us from Brazil.
BozoB John, sorry to hear that
mach78 I will be back next chat, the is for sure
John IL And he was ignoring my tenants phone calls…
Mike_Summey mach78, Bozo is from Hawaii I believe.
BozoB yessir
Joshua Mike, the ones your PM brought you were they distressed investors? Every deal my PM brings me is nowhere close to OG prices
gp Mike, are there any OG tutorials?
mach78 So I have heards
mach78 Herad
mach78 Heard
Mike_Summey John, that was not a property manager, that was a crook.
gp i second that
mach78 Good evening guys.
John IL Think it’s a coincidence that he’s running for political office???????
Trav Mike, how long do you wait to put an offer in again on the same REO?
Joshua PM collecting late fees and not passing onto owners is very common
BozoB John, sounds to be right up his alley
John IL Joshua, hence, why I haven’t looked up another PM
BozoB just because one was doshonest, don’t attribute that to the whole profession
Mike_Summey Joshua, the asking price of the houses I buy is rarely close to what the OG calculates the properties to be worth as an investment. I jsut go ahead and make the offers and let the sellers decide if they want to accept it or not. I think Charlie can tell you that sometimes I’ve bought properties at close to half the asking price.
BozoB wow, Mike, I never even considered that possible
BozoB that’s what has kept me from investing here. the usual $500k pricetags
BozoB I guess the large numbers just scare me
CHARLIE You have to make offers to buy properties the more offers made the more acceptance you will get
Mike_Summey Trav, I usually wait one quarter or if the original offer was made at the beginning of a quarter I may make another one about 2 weeks prior to the end of the quarter. Banks are much more flexible during the last two weeks of March, June, September & December.
Joshua Mike, I hear ya, me too, it’s just that PM are usually representing owners who are older and want to get out of the business. Those aren’t the guys that are willing to accept a low ball offer–at least they haven’t when I’ve made them
BozoB Josh, would you mind if I asked how many offers have been declined?
Trav Ya thanks, I was wondering if they became more flexible under time pressure
Joshua Bozo, on average I get one accepted for every 75 to 100 I submit
John IL Mike do you think putting it on paper increases your chances of offer acceptance? I’ve made a few verbal offers…
BozoB are there enough such properties in your area to make you wealthy? at those numbers?
Joshua John IL, written is always most powerful. Verbal means nothing to banks
Mike_Summey Joshua, you might be surprised to learn how many properties are managed for heirs, divorcees, people who have lost jobs, banks, etc. Don’t assume anything. Make the offer and let the sellers decide.
CHARLIE John always put it in writing
John IL Joshua, I’m talking about the sellers.
BozoB John, there was something I read by Roger about the power of the written word
Mike_Summey John, a verbal offer is as useless as teats of a boar hog! Pardon my French.
BozoB I think it was in Power Persuasion
richard-dallas Agree on offer strategies. After having similar experiences, have elected to managed all my properties personally for the past several years, and even with the demands this places upon my time, figure the control justifies the time & energy expended. Does anyone else face the dynamics we do in DFW, $60-80k valuations, lack of qualified deals for cash-flow driven investors?
Joshua Jonh IL, when I say banks = REOs (sellers)
John IL I haven’t cracked the REO thing yet. I have one bank sending me their REO list. Can’g find others…
John IL I think I’ll be making written offers from now on! Point taken!
Mike_Summey Richard, I’ve used professional management since I bought my first house. I did this because I wanted to be an investor, not take on a second job. My time is much more valuable negotiating new deals than fixing stopped up commodes in the middle of the night.
CHARLIE John you need to find a local agent that deals in reo, most agents can tell you who has the most reo listing
Mike_Summey John, find an agent who will represent you. The agent should be able to find plenty. That’s what Charlie does for me.
Joshua John IL, if it’s of any help, all the REOs I find are listed with agents on MLS. I rarely deal directly with banks
John IL Then you use OG, and treat the REO guy like any other seller?
BozoB Is it safe to say that if your credit is less than stellar, REO’s are out of reach until you can improve your score?
Mike_Summey John, keep this in mind: Banks are not in the business to own property. An REO is a liability to a bank.
Mike_Summey Hi Penny
Penny Hi Mike.
Joshua Mike, do your lease agreements with your tenants say your name exactly (or your LLC) instead of your mgmt co name?
CHARLIE HEY PENNY
Penny Hello Charlie, everyone.
Joshua John IL, you got it
Mike_Summey Bozo, nothing takes the place of good credit, but that’s something you build over time. Just accept the fact that if your credit is not good, it will be more difficult to buy than someone with stellar credit.
CHARLIE Joshua the lease is with the property manger and the property manager has a agreement with me
Mike_Summey Joshua, all leases are in my management company’s name. The tenants don’t know who I am.
John IL Mike, do you have a standard contract that you use with the PM?
BozoB thanks Mike.
John IL My crooked PM had a contract that I wasn’t comfortable with. My homeowners agent didn’t like it either…
richard-dallas Mike: What do % of gross rentals do you estimate do you estimate you pay for such services?
Mike_Summey John, yes I do, but it is my contract and it reflects the volume of business I do with the property manager. Most management companies have an agreement and it is usually okay to use; however, you should read it carefully and negotiate out any provisions you don’t like.
Joshua Mike, Charlie, thanks for the feedback. That’s interesting. I have two PM and both put my name in the “landlord” line but they are on the “agent” line acting on my behalf and execute the agreement. It may be a Texas form thing. I doubt they would change it for me.
BozoB Josh, you don’t know until you ask
gp Is there a PM standard commission you use, 10%
gp ?
Mike_Summey Richard, most property manager will want 10-12% of the rent, but that figure is negotible. The more properties you have the lower % you can negotiate.
CHARLIE Joshua you dont want tenants knowing who you are, they might call you at 2 am to fix a toilet
BozoB Mike, can you renegotiate after you start to get more properties? renegotiate on the ones alredy under contract?
Joshua Charlie, believe me, they don’t have any of my contact info! All they see is a name on a lease they rarely look at.
Joshua BozoB, not that you want my opinion, but of course, I do that all the time
Mike_Summey Bozo, yes you can. Usually the agreements are for 12 months and are renegotible annually.
BozoB thanks guys. And Josh, I welcome any and all opinions
CHARLIE Josha if they have your name with all the search engines you will be surprized what a tenat can find if they want to
BozoB thank you for sharing yours
BozoB Charlie, it sounds like a horror story
Joshua Charlie, good point, haven’t got a call yet after 9 yrs, but could happen you’re right
Mike_Summey I’d like to see some of you back here next week with a success story to tell. All this talk is of no use if you don’t put it to work.
BozoB challenge issued
BozoB But, I will have to postpone. I am actually moving from Hawaii. To make investing easier and for the opportunities all around
Trav Thanks Mike, everyone have a goodnight
Mike_Summey Everyone, one reason I use a professional manager is to provide a layer of protection between me and the tenants. I require them to carry errors and omissions insurance to protect both them and me in the event they do something that creates a liability claim.
BozoB Aloha Trav
Joshua Mike, I’m looking at acquiring 14 units of a 64 unit apt complex. The other 50 are owned by a bank looking to unload them. They are asking too much currently. Been on market 2 yrs (the 50 units). My play is hoping to get bank to grow impatient and sell the other 50 very low since no one really wants to buy a portion of a complex. Thoughts?
John IL Mike, I’ll be asking you more about the errors and ommissions thing next time. Is that in your book?
Mike_Summey Bozo, I’ve visited your state and you are right; prices there are astronomical compared to the mainland.
BozoB yeah.
Mike_Summey John, Google errors and omissions insurance. You should be able to get more information than you want.
John IL Will Do. Thanks.
Mike_Summey Well everyone, the time has flown by tonight. I’m going to sign off and I hope to see you here on September 12th. We will skip the first Monday in September as it is Labor dAy.
BozoB Thanks to everyone for all the great and informative conversation
Mike_Summey Goodnight all!
Joshua Mike, I’m looking at acquiring 14 units of a 64 unit apt complex. The other 50 are owned by a bank looking to unload them. They are asking too much currently. Been on market 2 yrs (the 50 units). My play is hoping to get bank to grow impatient and sell the other 50 very low since no one really wants to buy a portion of a complex. Thoughts?
John IL Thanks everyone. Mike, thanks for holding these chats.
BozoB 9/12. I’ll be here
Laura thanks Mike and everyone
BozoB anyone gonna stay on longer?
Mike_Summey Joshua, get the 50 first. You don’t want to own 14 and then have the other 50 purchased by someone who runs the complex in the ground.
Mike_Summey Goodnight
John IL I always learn something useful. Goodnight.
Laura good night
Joshua Thanks for everythng Mike!
Greg Goodnight all.

Chat Transcript – July 11, 2011

Mike — Tue, 12 Jul 2011 17:49:32 +0000

colberttigers I’m a new investor looking for my first rental property. Other that riding around (which I am covering), what is the best way to find owner financed property?
rePDXagent Evening ya’ll
CHARLIE Hey everybody
markl hello all
CHARLIE HEY ROGER
CHARLIE HEY JASON
rePDXagent How was your 4th of July Celebration, Roger?
Roger Dawson Hey Charlie: where is Mike tonight
CHARLIE HEY MIKE
Mike_Summey Hi everyone. Sorry I’m late.
CHARLIE Roger late as usual
Mike_Summey I was outside and let the time slip up on me.
Jason Hey All. New to this business. Love listening but starting will be interesting.
Mike_Summey Hi Broadway
Broadway Hello Mike, Roger and all!!!
Mike_Summey Jaso, welcome. My son Jason may join us later too.
colberttigers hi everyone
Mike_Summey Hi Trav
rgrimsley Hello Roger and Mike. If you are making offers on short sales, do you put a time limit on your offer?
Mike_Summey Hi Greg
Trav Hey Mike
Greg Hi Mike!
Broadway Mike, quick question on Offer Generator….will there be a patch for those who have purchased OG previously for the Windows 7 fix?
Mike_Summey rgrimsley, you can put a time limit on the offers if you like, but my experience is that the banks will take however long they want. The only purpose I’ve found a time limit serves is to take you off the hook on the offer after a reasonable time.
Mike_Summey Hi kskbuyers
markl Is anyone noticing any increase of foreclosures coming on the market?
Trav Mike, do you invest in modulars homes
rgrimsley Got it, thanks.
Mike_Summey Broadway, right now I would have to say no. The condition of real estate market in most people’s mind is so bad that I don’t see the demand being there right now to put more effort into a fix. I’m sure that will change when the climate dictates.
Roger Dawson Fourth of Jouly was great. we spend it at our second home in Lake Arrowhead, which is in the mountains abouve San Bernadino
Broadway Ok, thanks Mike
Mike_Summey mark, Charlie would be a good one to answer that. He does a lot of the clean up and prep work for the banks.
Mike_Summey Trav, I do have a few modular homes…ones built on permanent foundations.
colberttigers Mike, I’m a new investor looking for my first rental property. Other that riding around (which I have been doing), what is the best way to find owner financed property?
Jason I’ve heard of crazy foreclosure prices but can’t seem to find those. Is there a “best” “better” type of website you look at or are you trolling the newspaper court foreclosure listings?
Trav Ok, so they do appreciate
Mike_Summey colbert, why are you only looking for owner financed properties?
CHARLIE Mark the banks are turning loose of properties at a slow pace in my opion not to flood the market
Mike_Summey Trav, yes they do, just not as much as stick built homes.
rgrimsley markl – I think the forclosure flow depends on the state and the lender. Overall, I read forclosures (transactions) are down from 2010 but we may get another wave in Q4. In PA, Wells Fargo seems to have a steady stream coming on the market but it may vary significantly from one lender to the next.
rePDXagent Mike – do you have a set percentage below the purchase price you go buy when making your first offer on a property? Do they vary from SS to Foreclosure to straight sale?
Roger Dawson Has anybody had a good experience with short sales? My son bought one but didn’t know until the day before it closed whether the bank would accept the offer. Most people tell me that it’s not worth the frustration.
colberttigers I figured that would be my best route since I don’t have alot of money for a down payment, closing costs, etc.
Mike_Summey repdx, I don’t care what the asking price of a property is. I use the Offer Generator to calculate what the property is worth to me as an investment and that’s where I make my offers.
Mike_Summey Hi wai chunng
CHARLIE Colberttigers a good real estate agent or craiglist has owner finance home listed some times
wai chunng hello Mr. Summey
markl Thanks for foreclosure opinions, sure wish banks would “flood” the market.
rePDXagent great
Greg Roger, like you, I have heard that short sales are not exactly a party …
Mike_Summey colbert, have you ever thought of using a small bank loan coupled with a seller second mortgage.
Mike_Summey Hi Boston
Boston1 Hi Mike, sorry I am late!
colberttigers Mike, no I don’t know much about that.
markl mike, do you think prices are stabilizing or continuing downward?
kskbuyers Mike, we need to buy our own home to live in before buying more rental properties. We have looked at (been in) over 100 homes to learn our target market. How do u balance emotion/wants with bargains for a personal purchase?
Mike_Summey Jason, sorry I missed your question earlier. I use realtors to find the foreclosures for me. They have access to all the listings and can tell which ones are bank owned.
CHARLIE Roger short sales are a hard sale and take long time if they even close
Mike_Summey colbert, all the details are in our Secrets to Investing in Real Estate book.
Mike_Summey Hi reggie.
reggiel hello
Trav Mike, I don’t have a whole lot of experience in inspecting properties, how should I go about the inspectors fee? Make the sellers pay for it and agree to something else when I’m sure I’m not getting a bad apple?
colberttigers Thanks Mike
Mike_Summey Trav, have you looked at the inspection form on this website?
Jason Thanks. Makes sense. I should trust those who are in the market.
Broadway Roger, I sold a short sale as an agent a couple of months ago and it went pretty smooth. Only thing the bank did was push the closing date very short. Fortunately, I had the buyers all set for a quick close.
Roger Dawson Marki: Remember that the Weekend Millionaire method is a different way of investing. We don’t care much about the price of the property or whether it will go up or down in value. We care about how quickly the cash flow will pay off the mortgage.
Trav yes
Boston1 Mike: I was thinking about buying a condo for my personal residence, however I am considering buying a 2-4 family and living in 1 unit while renting out the rest. Are there any disadvantages to this approach?
rgrimsley Jason – i have found a lot of bank REO (forclosures) by checking individual bank web sites and searching for bank REO (Real Estate Owned). Then, if you find a property in the area you are targeting, you can call that agent as a place to start. Then, ask them to email you a link of any other 3rd party owned properties in your target area. Once you get to know that broker, you will know if they are going to help you find properties or if you need to start the process over again.
Mike_Summey Trav, you can use that firm to identify most problems you might encounter, but until you get some experience, you might need help estimating the repair costs.
Trav Ok great, any contractors you suggest in the asheville area?
Mike_Summey Boston, many people have done this and been successful. My caution would be getting too close to the tenants and allowing them to transfer their problems to you.
Roger Dawson Boston: if you live in one of the four units you can only depreciate 75% of the purchase price.
Mike_Summey Charlie, why don’t you tell Jason the advantages of finding a good agent to work with.
Mike_Summey Hi Andrew
Greg Should Boston1 get a property mgr, even though he lives in one of the units … to avoid tenant headaches?
Boston1 Thanks Mike. I could always say that “an uncle” or management co owns it. Basically using Roger’s higher authority gambit?0
Mike_Summey Trav, we have some good ones here, but I’d rather not make a recommendation as I know too many of them. Bayshore Company is a property management firm I use and they can give you some names.
Trav Thanks
Andrew in Detroit Hi everyone…I’m curious – does anyone here use a standard banking ACH Program for rent collection within their portfolio? (I’m a self manager of about 7 SFH’s and a 29 Unit in the suburbs of Metro Detroit).
Roger Dawson Boston: that’s a good approach Boston. Tenants always assume that the owner is rich.
markl roger, thanks. have read and understand the method but was just wondering if folks are still noticing price declines to make the cash flows easier. thanks
CHARLIE Jason if you can find a good agent to work with you it is a win win for you and the agent. You can get properties and the agent gets paid. This works for both parties. Just let the agent know your intent up front and what you can do
Boston1 Roger: Thats 75% depreciation is acceptable to me — hopefully the tax advantages will be there as well
Mike_Summey Greg & Boston, if it were me, I’d use a property manager and swear them to secrecy about who owns the property. You don’t want your neighbors knocking on your door at 2:00 AM wanting you to unglog a toilet.
Greg Thanks Mike
Boston1 Good point, Mike!
Mike_Summey HI Penny
Trav Mike have you bought any properties in the asheville area lately
Roger Dawson Wecome back Penny
rgrimsley Mike, I know you indicated you own rentals in Soth Carolina yet after getting into the market there I was astounded to learn of the ultra high tax rate for non-owner occupied properties. I know you just have to plug the higher taxes into the Offer Generator but when your taxes are $3,000/yr instead of $800 on a SFR property, doesn’t the SC tax structure put you behind the 8-ball before you get started?
Penny Hi Mike and Roger, everyone.
Mike_Summey Trav, no I haven’t. I think Asheville is still overpriced and has a long way to come down before it reaches reality. Just my opinion!!
Trav ya me to, do you think asheville will ever come to reality?
Jason Agents can help me I’m sure but I never have approached any for this type of deal. Seems so many want to just show high end property for the commission.
Andrew in Detroit Mike – what purchase price/Taxable value are the properties with 3K in taxes?
Mike_Summey rgrimsley, the taxes are high, but I simply use them and calculate the offers accordingly. If the offers are accepted, fine! If not, I just move on to the next one. So far we’ve bout about 40 properties in SC over the last two years.
Andrew in Detroit In Michigan we have very high non-homestead taxes (my avg. is about 65 mills on the SEV) which runs about 2500-3500/year in taxes BUT, I’m also buying at $40K on the acquisition cost and renting for between $950-$1050/Month so it balances out…
rgrimsley Nice!
Andrew in Detroit Mike – what purchase price point/range are you paying for a standard 3/2/2, etc.?
CHARLIE Jason there are agents in most areas that deal mostly with foreclousers ask around and most agents can tell you who they are. Or if you no a house is a foreclousere find the listing agent
Broadway Jason, in this area, some of the lower end properties are offering bonuses to agents to attract more activity especially when the properties are below $40k. Commissions just don’t work for the lower priced properties.
Mike_Summey Trav, my experience has shown Asheville to go into the downturn well behind the rest of the country and come out of one long after everyone else. People here tend to be stubborn and hang on until they totally exhaust their capital before coming off their prices.
Mike_Summey Andrew, in SC & AL I am finding relatively new properties like that in the $40,000 – $70,000 range.
Andrew in Detroit What type of rent will they bring?
Trav Mike, in SC what is the oldest property you put offers on since they are so many on the market?
rgrimsley Mike, in the 60 -70K, range, are you looking at mostly carpet and paint and maybe a few minor repairs?
Mike_Summey Andrew, they rent from $700 – $1000 per month.
Mike_Summey Trav, I don’t usually look at properties older than about 20 years max.
Trav Ok
Andrew in Detroit Very nice…It’s amazing, I could talk til I’m blue in the face about the quality of the deals that are out there and how this buying opportunity is the best in the past 50 years and yet people STILL don’t get it.
Andrew in Detroit I have friends who’ve been in the business 40+ years and they all admit they’ve never seen anything like this either…
Mike_Summey Everyone, if you can get together enough money to make cash offers, you can get your best purchase deals that way. Then after you buy for cash and get the property rented, you can go get a mortgage based on an appraisal and get your cash out to do it all over again.
Boston1 Mike, up here in New England, our housing stock is older – so does the property not being older than 20 years apply everywhere? I know that maintenance costs are a big concern.
rgrimsley Andrew – are your $45K deals older houses than the 20 yr old ones Mike tries to stick with? The older ones seem to be money pits.
Mike_Summey Andrew, you are so right. I’ve been saying for many months that we are currently in the best time for investors I’ve seen in my lifetime…and that’s been a while.
Roger Dawson I’m put in a commercial for my new book Secrets of Power Problem Solving. Check it out on my website RogerDawson.com. Now back to the program in progress!
Greg Mike, lol …
Mike_Summey Boston, when making offers on older properties, you just have to factor in a larger percentage of the income to go to maintenance reserves.
kskbuyers Hi Mike/Roger, we need to buy our own home before buying more rental properties. How do you purchase your own homes? Do you utilize the same tools/techniques?
Greg Roger, I’ll check out the new book … thanks.
Andrew in Detroit Mike – my experience if people acquire this way is that if it’s been under 12 months you’re going to have to base your refinance price off your original acquisition price, but if you hold cash for 12+ months you can get the higher appraisal. I did it on 2 properties like this this past month. Also, a while back you posted about the importance of local banking relationships…I can’t stress that enough. I’ve got my local bank holding the loans as I’ve exceeded the Fannie/Freddie resell limit and they’re happy as heck.
Jason Thanks guys. I shop for an agent to help find those gems. Gives me more time for other priorities.
Trav Mike, I have excellent credit but not much cash saved, what it the best route for me to get enough cash to make cash offers…invester,bank loan, can I get a line of credit that big?
Boston1 Thanks, Mike — unfortunately, there isn’t much newer construction around here
markl mike, any cities in NC that are priced closer to reality?
Mike_Summey Trav, Boston & others, I use the 20 year rule only because there are so many newer homes on the market. If there were no newer ones, I’d fall back and look at older ones but would calculate my offers based on a higher maintenance reserve.
Roger Dawson On the age of the property, remember that Mike is talking about starter homes that have often been tenant occupied. There’s nothing wrong with a high end owner-occupied home at 30 years.
Andrew in Detroit RGrimsley – Yes. I buy 40 y.o. Brick Bungalo’s/ranches with a basement and a garage in the suburbs of Metro Detroit. Avg. 1100-1200sq. ft. A bit smaller than most and a bit older than most but because the houses are smaller and brick there isn’t TOO MUCH that can go wrong. They all have updated mechanicals/electrical too
Boston1 Roger, thats a good distinction: the wear and tear (so to speak) should be less on owner occupied homes
Mike_Summey ksk, buying a personal residence is a bit different because you can live out part of the value. If you don’t expect the personal residence to be a long term event, I’d use the same techniques we use to find good investment proeprties.
Andrew in Detroit Mike – so here’s a good question…I know it’s a personal thing, but how does a given investor know when “enough is enough” when it comes to homes owned/cashflow amount, etc.
kskbuyers thank you very much, we very much appreciate you having this forum. Please don’t stop it!
Mike_Summey Andrew, sounds like you are on the right track. Good strong banking relations can often overcome the 12 month holding limit.
Greg Andrew: when you can buy the New England Patriots!
Mike_Summey Mark, Charlotte seems to be closer to reality.
Boston1 Greg: Kraft will demand a pretty penny!
Greg
rgrimsley Mike, are you doing a “take-out” after buying a property for cash and if so, do you find most lenders are receptive to the fixed payment, variable interest rate loan you have described before in this caht or do you have to search to find a lender that will structure a loan that way?
Mike_Summey Andrew, one of my bankers asked me that question about a year ago. My answer was, “When my offers quit being accepted.” That’s also the best indicator that a market is overheated.
Mike_Summey rgrimsley, I currently deal with 12 different banks. All of them make this type loan to me.
rgrimsley Roger, are you still seeing a lot of forclosures in Southern CA?
Mike_Summey ksk & repdx, where are you located?
Andrew in Detroit hahahah, fair enough. Mike – do your bankers still require 20% down on your purchases or no?
kskbuyers Brookfield, WI – suburb of Milwaukee
rgrimsley Roger – Awesome! I guess I need to make a few calls.
rgrimsley Sorry, I meant Mike.
Mike_Summey Andrew, I buy all of my properties for cash and get term loans later. The 20% down payment has never been an issue.
Roger Dawson Yes, California is very high in some places like Stockton and Riverside. I lot of banks are not following through on foreclosures because they are scare of what happens to unnocupied problem. Desirerable places like the coastal communities are nolding their own.
Trav Mike, do you structure your loans with a balloon payment or fixed
Mike_Summey Trav, for 30 years I’ve used the same type financing: Fixed payment, floating rate, balloon in 5 years.
Ned Mike, any disadvantage or risk to the fixed payment, variable rate loan structure?
CHARLIE Hey jason hows family
Roger Dawson Jason, you’re looking more like your Dad every day!
wai chunng Roger, where are you at in Southern California?
Jason Summey They’re great…just got baths and finally laying down
Roger Dawson Wai: La Habra Heights, 10 miles north of Disneyland.
markl they look like twins
Mike_Summey The 5 yr balloon can be a problem if you don’t have credit good enough to move the loans when they mature if the bank holding them gets in trouble and doesn’t want to renew. I am currently experiencing this with Suntrust. They are in trouble with real estate and have asked me to move all my loans as they mature. Fortunately I have no problem doing this.
rgrimsley Mike, for a 5 year variable rate investor loan for someone with a 750 credit rating and 20% down, do you think you are looking at a 5% +/- interest rate?
reggiel Fannie Mae will now let investors cash out after buying all cash w/o the 6 mo. hold period.
Mike_Summey rgrimsley, with few exceptions, what I am currently getting at my banks is a floating rate at prime with a floor of 4.25% and a cap of 7.5%.
Mike_Summey reggie, that’s good to know.
Trav Mike, which banks are working best for you ?
reggiel they just changes their underwriting guidelines
kskbuyers Mike, how does this fixed pmt/floating rate financing work better than an ARM with rates as low as 3.5% +/- right now since you can renew the loans on these too in a few years?
Jason Is the a difference between banks and CU when it comes to real estate investing?
markl mike, i think i get it. does that mean you do not get rates below 4.25%?
rgrimsley Thanks very much, Mike! So the 4.25% floor is well above prime now but the bank gets a rate it is happy with and you have a cushion when rates start to rise. Is that the jist of it?
Mike_Summey Trav, it varies. One will be good for several months and then tighten up while one that didn’t want to do anything will open up to new deals. Keep in mind that banks are businesses too and they have their ups and downs just like any other business. It their portfolio gets out of balance with real estate loans, they will stop making them until things get back in balance. If the don’t have enough real estate loans to properly balance their portfolios, they will get agressive about making real estate loans. It’s just business.
rgrimsley kskbuyers – Is that 3.5% an owner-occupied rate? Seems very low for investment property.
Mike_Summey ksk, I like the fixed payment because all that happens is the breakdown of principle and interest changes as the rate changes. The payment stays the same over the life of the loan which allows you to plan your cash flow better.
kskbuyers yes, sorry, didn’t think about that – owner occupied. Thanks for explaining the reasoning in your financing preference. I can see why you like it too now.
rgrimsley Anyone – Have you not seen that an investor owned property carries a 1% – 2.5% premium to an owner occupied interest rate?
Mike_Summey ksk, another point I would make is that ARMs often use “teaser rates” to get you hooked. Only after reading the fine print do you see that there may be a substantial prepayment penalty if you should choose to pay early.
kskbuyers good advice!
Trav Mike, so I should start building relationships with a few small banks and a few larger ones?
Mike_Summey Trav, that is a VERY good idea.
Mike_Summey Hi son Jason. I didn’t see you come into the chat. Sorry.
kskbuyers do you prefer large banks or do you use credit unions too?
Broadway Mike and Roger, thanks so much for the chat tonight. Got some mowing to get done before it gets dark here. Hope everyone has a great evening and super July too. Gnite to all!!!
Roger Dawson Goodnight Broadway
Mike_Summey ksk, I use banks of all sizes. I do not use credit unions, but only because they are more consumer oriented and don’t seem to understand my business.
Mike_Summey Hi ralph
ralph88888888 Hi Mike
rgrimsley Mike – to piggy back on Trav’s idea, aren’t they all going to want to run my credit? Every time you go to a new lender to flesh out what they can do, will they not insist on running your report and getting your FICO. Or, do you just take it to them after running it yourself and tell them they can update it priot to actually making a loan when you get to that point?
Jason Gotta interrupt a sibling rivalry. GdNite
Roger Dawson It’s a great time to buy real esate!
Mike_Summey Wow, our hour is almost up. It has passed very quickly tonight. I’m glad veryone has had good questions.
Jason Summey I’m here trying to catch up
Jason Summey Hate I was late but babies don’t bathe themselves unfortunately
kskbuyers do your lenders require you to have 25% down on investment properties as well as have 6 months PTI on all your other properties to purchase with a loan?
rgrimsley Mike and Roger, you are both very kind to share your time and knowledge. Thanks very much! Bob Grimsley
Mike_Summey rgrimsley, when you are doing business with several banks, they run your credit periodically anyway as part of their annual review. I don’t think credit checks from banks you are doing business with ding your credit the same way applying for credit cards does.
Trav Mike when I was talking about small banks I was thinking of credit unions, can you suggest some small and larger banks to start building relationships with?
Roger Dawson I’m confused. What Matt on the chat in addition to Jason?
Roger Dawson T
Jason Summey Matt should be in the skies over Ft. Hood right now but I made it
Roger Dawson I was wondering about siblling rivalry!
Mike_Summey ksk, I can now make all of my purchases with cash, so I don’t run into that problem. I think down payments are very important to banks at this time if they are loaning money for the purchase.
CHARLIE Roger that was other jason
Roger Dawson OH, I got it! Thanks
rgrimsley Good night everyone. Now, let’s get busy buying some property. ’til next time.
Mike_Summey Roger, Matt is in Ft. Hood preping to go to Iraq. He is probably out hunting jack rabbits with an Apache right now.
Roger Dawson Goodnight everyone! Good investing!
Trav Mike when I was talking about small banks I was thinking of credit unions, can you suggest some small and larger banks to start building relationships with?
Boston1 Thanks Roger and Mike..Have a good night all!
markl good night and thanks
Roger Dawson So that’s whey the military costs a trillion a year!
CHARLIE Jason summey how house coming
Greg I wish I had an Apache …
Jason Summey me too…look like fun to fly
Mike_Summey Trav, you may try First Bank…the bank that took over Bank of Asheville, Hometown Bank in Waynesville, Capital Bank
Penny Goodnight everyone.
Jason Summey house is good finally looking like a home…sort of
Trav Mike thanks so much for your advice
Trav I’ll let you enjoy the rest of your night..till next month
kskbuyers thanks for teaching and sharing!
CHARLIE Goodnight all
Mike_Summey Goodnight Everyone! See you here next month.
Mike_Summey Our August chat will be on August 1st.
Mach78 Good evening, everyone
Mike_Summey Mach78, you’re late. We’re just wrapping up for the night.
Mach78 Really?
Mach78 I must have miscalculated
Mach78 I am from Brazil
Mach78 And thought it was supposed to be at 22 hours my time
Mach78 Sorry for that.
Mach78 you next time
Jason Summey Better late than never!!! come back next month!
Mike_Summey Mach78, please join us next month an hour earlier.
Mach78 Till next time
Mach78 Sounds great
Mach78 you then
Mach78 See you then

Chat Transcript – June 6, 2011

Mike — Tue, 07 Jun 2011 13:23:10 +0000

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

Chat Transcript – May 2, 2011

Mike — Tue, 03 May 2011 14:07:57 +0000

CHARLIE Hey davidd & sparky 37
davidd hello
sparky37 Hello
sparky37 Hello Mike
CHARLIE Hey mike how was your trip today
Mike_Summey Hi everyone!
CHARLIE HEY GREG
Mike_Summey Long day Charlie.
Greg Hi all!
sparky37 Mike, did any of your properties get hit with the storms?
Mike_Summey Just got back less than an hour ago from Alabama.
Mike_Summey Sparky, not that I know of.
sparky37 Glad to hear that
Mike_Summey Sparky, we did have a huge tree blow down in a storm a couple of weeks ago.
Mike_Summey Hi mbroadway & athu
ATHU Hello Mike
CHARLIE Hey mbroadway & athu
mbroadway Hello Mike!!!
ATHU Hello everyone.
mbroadway Hello Charlie. Hope all are well tonight
Mike_Summey Hi Kel
Kel Hello.
CHARLIE Mike how did alabama look from the sky
Mike_Summey Hi Linda
CHARLIE HEY LINDA
mbroadway Mike, got a question on inspections. How extensive to you go with your inspection before you make any offer? Do you have contractors look at the houses for you?
Linda Hi Guys,
Mike_Summey Charlie, from 23,000 feet you can’t see much.
CHARLIE Hey jan-erik
Jan-Erik Good Evening all
Mike_Summey mbroadway, have you looked at the inspection form on the website?
Mike_Summey Hi Jan-Erik
Mike_Summey mbroadway, I follow the form right down the line. Ask Charlie to comment. He has been with me on dozens of inspections.
mbroadway Mike, yes, I have that form and use it too. I just didn’t know if, on houses that need some extensive repairs if you had a contractor you work with look at the houses prior to any offers.
Kel Mike, I had some tenants recently that were really filthy. destroyed carpet and paint. They wanted to renew but I declined. They didn’t really damage the structure. I am wondering if I should have let them stay since I was going to have to replace carpet and paint anyway. Does your property managers inspect between renewals and would you have let them stay?
mbroadway I thought Charlie would be heavily involved in those as well
ATHU With the way the economy is today will it be hard to obtain a loan for a mobile home.
Mike_Summey Roger just called & said he was having trouble getting in the chat. Has anyone else had a problem tonight?
Linda Mike, can I ask a personal question? How many income units do you own?
Jan-Erik Random request before chatting gets too heavy. Please consider offering books as ebooks.
mbroadway Charlie, do you get really deep in the inspection before you contact Mike on houses you come across??
CHARLIE I did on aol i had to go to another site
Mike_Summey mbroadway, if the repairs are very extensive, I would probably have someone more qualified look for me. I’ve been at it long enough now that I can handle most things.
sparky37 Mike, I got in fine
Mike_Summey Kel, my property managers are supposed to inspect between 60-90 days after a tenant moves in and then if everything is in order again prior to renewing a lease. If the first inspection turns up problems, they reinspect again in 30-60 days to be sure the problem is being handled.
CHARLIE Mbroadway i dont look at many of the properties before me and mike do, we look at them together. There is a few i will look at if i am not sure about the area.
mbroadway Mike, thanks!!! I figured you would have it handled yourself now but, just starting to build your home portfolio, I didn’t know if you used that or had that much trust in the contractors. Thank you for that form too. It’s great to use. I just don’t know all the ins and outs of what I’m looking for yet
Mike_Summey Linda, it is constantly changing. It is several hundred.
mbroadway Charlie, thank you very much
Mike_Summey Hi Ned
Ned Hey Mike
CHARLIE Mbroadway if you know the area well and property mangers no it well that helps alot
CHARLIE HI NED
mbroadway Super Charlie. Thank you again!!!
Mike_Summey I went to Alabama to look at properties today, but was not impressed with what I saw. The 12 units I primarily went to look at were not worth making an offer on, so we looked at 4 others in addition. I will probably make offers on 3 of those.
Mike_Summey Also, I have one that Charlie & I looked at Friday that I will make an offer on tomorrow.
sparky37 Mike are you focusing more on AL more then NC & SC now?
mbroadway Mike, can you tell us what it was that did not impress you on those properties??
Mike_Summey sparky, no I just happened to go to Alabama today. I’m more focused on SC right now as that’s where I’m fining more deals and Charlie is doing a great job for me there.
ATHU Mike if you had a choice between purchasing a brick home or a mobile home with 4 arces attached which would you choose?
sparky37 Mike is there a specific area in SC you are looking at?
Mike_Summey mbroadway, they were much older than I was told and were very dated. Also, the tenant base that was in them was not of the quality I want. If I bought the units, I would kick everyone out, rehab the buildings and start over. I didn’t want to tackle that type project that far from home & without someone like Charlie to oversee it.
Mike_Summey athu, the brick home…no question. I wouldn’t even consider a mobile home with 4 acres.
Ned Mike, I would like to buy properties with cash/HELOC and then pull my cash out with a refi. But, the lenders I’ve talked with will only loan 70-80% of the purchase price. Are there banks out there who will finance a higher percentage if justified with an appraisal?
mbroadway Mike, that makes sense. Could you see those homes being an investment for someone else that they would make money??
ATHU What woudl be your reason for choosing the brick home?
Mike_Summey athu, acerage is not an asset for a rental property. It has to be maintained and taxes paid on the acerage which generates no income. Plus, mobile homes depreciate rather than appreciates.
Mike_Summey Hi Penny
Penny Hi Mike.
ATHU Thank you Mike
Mike_Summey Ned, don’t tell the banks what you paid. Just tell them you own the properties free and clear, they are rented for ___ and you want to get a loan based on the appraisal.
Kel Mike, you have said you have never sold a property. I have two, one rents really well, gets good tenants, the other attracts lousy tenant with increased repair costs every time. Wouldn’t it make sense to sell that one and go for another that attracts better tenants?
sparky37 Mike, do you still see property values falling and when do you think they stabilize?
Mike_Summey mbroadway, they could be for someone who was close enough to make sure the rehab and new tenant base was done properly, but right now there are too many good deals that don’t have those problems to waste time trying to make a silk purse out of a sow’s ear.
Greg @sparky37: property values will flucuate.
mbroadway Mike, I love that saying!!! Thanks
CHARLIE Sparky37 the prices will still fall for the next couple of years in my opion. It also depends on where you live to when it will stop. Each area is different
ATHU Mike do you think that It is a good idea to deal with a hard money lender?
Ned I’ve heard the term “seasoning” mentioned by lenders, which I took to mean the lender wants to see that you’ve owned a particular property for some period of time. Is that typically an issue?
CHARLIE Hi mello1112
Mike_Summey Kel, that is your decision to make. I have a few properties that don’t do as well as others, but I have decided to keep them anyway. I guess it’s because I’ve never been in a position I couldn’t continue buying and the ones that don’t do as well are usually ones I don’t have much invested in.
Linda Has anyone here had experiance in working with a group of INVESTORS to purchase property (commercial, multi family & commercial) and if so what has been your experiance?
Mike_Summey sparky, I think we are still many months from seeing a bottom in most markets. The banks are holding too much inventory off the market and that will have to be absorbed before the market really rebounds.
Mike_Summey Hi mellow
mello1112 hello there
Mike_Summey Linda, I not a good one to ask. I’ve never had a partner nor an investor. That’s probably why I’ve chosen the slow and steady path to wealth rather than the get-rich-quick path.
Mike_Summey I think I’m going to have some “real estate speculator” coins made. One side will say “Get-Rich-Quick” the other side will say “Go-Broke-Fast”
Mike_Summey Every time you buy a property that you have to sell to make a profit you flip the coin. Sometimes you win, sometimes you lose.
Linda Mike, I took your advice and met with the commercial lender at a small local bank, and explained what I want to do in buying 4+ units, (defined as commercial lending), he told me what I’ve been told by others, as long as the prop cash flows (don’t remember the formular right now) but it’s one that I would ONLY CONSIDER as I’m conservative in my purchases, but he ran numbers for me, looked at my capital on hand and was VERY INTERESTED IN working with me….. I actually felt good leaving the bank, feeling like I have a shot to start buying again. THANKS FOR THAT ADVISE MIKE,,,
sparky37 Mike, those coins sound like the the “Tom Vu” investing you make mellons
Mike_Summey Thanks Linda! Banks need good loans right now and are anxious to find solid people to work with.
Mike_Summey sparky, ??? Not familiar with that.
sparky37 He was an infomercial real estate guru in the late 80′s with a chinese voice would say he teach you how to make millions but always sounded like mellons
Mike_Summey sparky, where have all the gurus gone?
sparky37 They are currently flipping burgers!
Mike_Summey Hi theresa
CHARLIE HI THERESA
sparky37 It’s less expensive then houses!
Linda Mike, seems like the RICH DAD, POOR DAD shares your ideas as to solid investing, do you have an opinion on him and his books?
theresa hi, just a note, I had a really difficult time accessing this chat
theresa i have been trying for 30 minutes
Mike_Summey I have to chuckle every time I think back to the mid 2000s when all the gurus were telling me I was missing the boat. Thank goodness I missed it, because along about 2008 it sank.
Linda Lol!!!! You are funny MIKE….
Mike_Summey Linda, Robert has some good ideas and I think he is probably going to be okay. He has had his problems in the past, but I think he has learned.
Mike_Summey theresa, there must be a problem of some type, because Roger has not been able to get in either.
sparky37 Mike as you have said and I agree buy and hold and don’t buy to flip or speculate on price increase
Mike_Summey I’m glad those of you who are here were able to get in, it would have bben lonely being here by myself.
theresa the capithcha whatever it is called never allowed me to access; then i found another way in which prob. was the way i was suppose to originally be at. . .lol
Mike_Summey sparky, no one has ever been able to give me a good reason to sell. When you sell you cap your profit at the time of sale and then you have to buy another one to make more profit. I’ve learned that the longer you own a good property the wider the profit margin becomes as the mortgage pays down and the rent goes up.
ATHU Mike what is your prospective on hard money lenders?
theresa Some of us do not have the funds yet to buy and hold, and have no option but to flip. Right?
Mike_Summey Everyone, the first property I purchased many years ago only broke even after expenses. The second year I owned it I raised the rent $25/mo. and saw a small trickle of cash flow. I still own it today, it is paid off and it rents for $1095/mo. Think about that!!!
Mike_Summey Athu, I’ve never used a hard money lender. Most of them will expect you to sell and pay them off in a rather short period of time at a very high interest rate.
Mike_Summey theresa, do you have a job?
ATHU Thank you
mbroadway Mike, you are right on about buy and hold. I can do the calculations that show to sell after 10 years and make money but, you give up the long term profit you need in the ‘golden years’ and will be able to increase those profits through increased rents.
Mike_Summey athu, hard money lenders tend to be people who support flippers and don’t want to take the risks of doing the deals themselves.
theresa my husband is retired army officer, we sell real estate as a realtor on the side, and he works part time for the post office, but we are supporting two families (caps were an accident)
ATHU Mike the part of NC which I live in has many very old mill houses for sale would they be a good investment?
mbroadway I’m wanting my job income to just pay off my rentals so I can buy more rentals. Eventually, I’ll live on just the rental income and still buy.
Mike_Summey athu, probably not, especially if the mills have closed nad moved to Mexico like so much of our textile industry. Renters must have a place to work if they are going to pay their rent.
Mike_Summey theresa, I lived on the income from my job for 20 years before I ever took a penny out of my real estate. As a result, I’ve been able to live on the income from you investments for the past 15 years and haven’t had any earned income.
theresa embarassing as it is, we really have no money saved. All 3 of my guyes were unemployed which soaked up all our savings, when the nation had the restructoring hit our family hard.
Linda I’m all about streams turn to rivers turn to RAPIDS of income, but sometimes you have to sell to survive, we’ve been able to hold onto 2 properties = 3 rental units, and sold 3 that grossed about $ 860,000 neted about $500,000. Ready to start buying again, but limited income has been an obsticle. Sometimes you have to SELL SOMETHING TO GET THE CAPITAL TO KEEP MOVING, and I see nothing with that if the ultimate goal is the same, you just have to go down a different path to get there. Just my opinion
Mike_Summey Linda, I think you are talking about two different things. Some people work at the post office, some in a factory and some flip houses as their JOB. That’s different from investing, where you buy and hold for the income stream. One is active income, the other is passive income.
theresa how does one get there? we have been trying for 2+ years with hard money lenders. just trying to get our first deal to make some money to get ahead, but we just keep spinning our wheels.
Mike_Summey theresa, see what I just wrote.
CHARLIE Linda,thersa you make your money when you buy the property. You have to buy it right and it cash flow from the beginning
Mike_Summey There is a huge difference between investing in real estate and speculating in real estate. If you have to sell a property to make a profit, it is speculating, not investing. Unfortunately, the late night TV gurus have convinced millions of people that speculating is investing, it’s not!!!
Kel Thanks all. gotta run.
sparky37 Mike, you said it perfectly “how many of those guru’s are still around”?
Mike_Summey sparky, I asked that earlier.
sparky37 Mike I was quoting you
Linda I couldn’t agree more. It’s been tough times that pushed us to sell and get creative turning a 2 family with extra lot into 2 condos and a BUILDABLE HOUSE LOT, eventually selling all of them and moving. We made a killing, but we had to sell to survive. One of those sales we used via 1031 exchange into buying another 2 family in the town we now live…. we saved the capital from the land sale to purchase our primary home, and now the other condo $ will be used as seed money to buy more to BUY AND HOLD ONTO. Thats our plan, and thankfully it’s worked so far for us, through 3 years of very limited work for my husband…. my small business doesn’t make much $$, but grateful for what we have and what we’ve done….
Mike_Summey If you want to know the difference between speculating and investing, I can explain it very well…in nearly 40 years as an investor, I’ve never had a down year. In fact, the past two years have been the best ever for me. That’s because I was never a speculator and I never took the hits speculators take. On the other hand, many speculators made a lot more money that me for a while.
Mike_Summey I think Penny went to sleep!
ATHU Thank you Mike for all your input. I have enjoyed this evening.. Can’t wait until next month.
Penny nope
Mike_Summey mello, any questions from you before we conclude the chat?
sparky37 Have a good night all!
Penny still here, but just signing off. See you guys next month.
Mike_Summey How about you Jan-Erik?
Jan-Erik Just working the system. Join to learn.
Mike_Summey Thanks athu
mbroadway Mike and Charlie, thank you very much for your time. You guys are extremely helpful.
CHARLIE Thanks mbroadway
mbroadway Good night to everyone and hope you all have a super May.
Mike_Summey Charlie has been a real asset for me. Hopefully I’ve been the same for him.
theresa We find great deals. We know of one right now, no money for mortgage to buy hold our only hope is to buy flip; then eventually we can buy and hold. does someone know a better plan? what is the secret? or are we stuck struggling forever?
Mike_Summey I wish everyone one of you would go out and make a few offer during May and come to the June chat with some success stories.
CHARLIE Mike talk to you tomorrow & yes you are a asset to me, i am learning everytime we look at houses
Linda Have a great month everyone!! Good night, thanks for having this venue Mike.
theresa time to go i guess. thank you bunches. i guess i will keep looking.
Mike_Summey I’m outta here too! It’s been a long day. See you here next month. Until then “Happy investing!”
theresa by greg

Chat Transcript – April 4, 2011

Mike — Tue, 05 Apr 2011 13:53:53 +0000

ATHU Hello Keith! Where are you from?
Roger Dawson Hi Athur and Keith, Mike should be joining us shortly.
Keith Hi All – Keith here from Plano, TX
ATHU Hello Mr. Dawson. I would like to wish you a Happy Birthday with many more to come
Keith Second that – Happy Birthday Roger!
Roger Dawson Thank you Athu and Keith!
Mike_Summey Hi everyone…especially the birthday boy!
Jan-Erik Good evening all
Mike_Summey Hi Jan-Erik
Roger Dawson Thank you Mike!
Mike_Summey Hi ATHU, Keith & Richard
Richard Hi Mike
ATHU Hello Mike
Keith Hey Mike -
Mike_Summey Stormy weather here. I hope I don’t get knocked off line.
Mike_Summey It is supposed to get very bad later tonight.
Mike_Summey Anybody have questions before we get too busy?
Roger Dawson Here in Los Angeles it’s a lovely evening. 75 degrees and bright and sunny
Keith Sorry to hear it. It’s prime baseball weather here in the DFW area.
Mike_Summey Rub it in Roger
ATHU It is nice here in North Carolina also
Mike_Summey We have a front with big thunderstorms, possible tornados and hail moving in here.
Mike_Summey Hi kjh
Mike_Summey Carleton Sheets said he may join us for a while.
Mike_Summey Hi dena
kjh Hello to all
ATHU I have a question. Is it hard to negotiate with real estate agents who have properties that have been on the market for a long time?
dena gettleman hello
Richard Hi K-man
Mike_Summey Athu, you don’t negotiate with the real estate agents, you negotiate with the sellers
kjh Evening Richard
Roger Dawson When I was an active real estate broker we used to say that there are three elements to a great real estate market — buyers, sellers and financing — and you’d never see all three in place at one time. The only thing I see missing now is financing. If the banks would start lending on real estate again we’d have a booming market.
Mike_Summey Athu, I rarely buy any properties without an agent involved. If I want to negotiate, I just give the listing agent a written offer for what I want to do and let him or her present it to the seller.
kjh Mike, do you tend to stay away from Short Sales due to the length of time it takes to process the deal or does it not matter to you?
ATHU Oh okay! I understand what you are saying. Thanks for the information..
Mike_Summey kjh, I do make some offers on short sale properties, but not too many for that very reason. I have one pending right now on an offer that was accepted by the seller in February. The bank just last week asked form more information from me.
Keith Mike and Roger – what would be the best pieces of advice you have for making cash offers on HUD homes?
Roger Dawson KJH: Short sales are a real pain. My son just bought one and he sweated it out for months, not knowing until the day it closed that we would get it.
kjh great thanks
Mike_Summey Keith, write the offers and present them. Nothing magid about that. Cash offers always get the quickest and most positive responses.
Mike_Summey Hi Wayne
Wayne Hi Mike
Mike_Summey Keith, I have bought nearly 40 bank owned properties in the past two years by simply making cash offers for what I want to pay and then letting the bank respond. Often I am turned down only to buy the same properties months later for less than my original offers.
Mike_Summey Hi barbie
barbie hi all!
kjh I’ve had trouble downloading and using the Offer Generator on a MAC. Do you foresee any corrections in the coming months?
ATHU Mike & Roger I was reading your book and see where you said open an account with different banks. Do you still feel the same way?
kjh hi barbie!
Roger Dawson Keith: Not all brokers are authorized to handle HUD resales. The ones that are authorized have gone through classes to learn how the system works. Find a HUD broker that you can get along well with and have him or hurt hunt for opportunities. Strangely enough if you are a public servand like a fireman, police officer or sheriff
dena gettleman are these offers for multiple properties contingent on an inspection?
Mike_Summey kjh, I haven’t heard of any having problems with Mac computers. It shoud install okay. Just be sure to select the Mac version from the installation disc.
Mike_Summey Hi Markl & marwllm
Roger Dawson ‘s deputy you get special treatment. They like to have the laws living in the neighborhood.
markl hi mike
kjh I’ll take another look at it.
marwllm1 Hi Mike
Mike_Summey dena, I do the inspections before making the offers. Otherwise I wouldn’t know how much to offer allowing for the needed repairs.
Mike_Summey Athu, I have accounts with 12 banks.
markl would like to buy offer generator but have windows 7. any luck with that yet?
Mike_Summey Athu, when you are locked into just one bank, you have to ride their wave and it may not be going in the same direction you want to go. Of my 12 banks, 3 are not doing any real estate loans right now and one has asked me to move my loans to other banks because they are in trouble with real estate loans and have been ordered by the Feds to purge their real estate portfolio.
Mike_Summey Mark, we are still having problems with Windows 7. Its not with the OG program, its with the installation program.
dena gettleman inspecting before the offer…. that is a little different from the norm. if you go to the same inspector, i guess you might get a discount after a while
ATHU What is the best way to build business credit?
Keith Thanks Mike & Roger about HUD homes. I’m seeing houses come and go active now in the Dallas area – like you said. Sometimes they come back on the market at a lower price. Doesn’t seem like any rhyme or reason to what the Feds accept and there’s really no negotiation possible. Like Mike says – I guess just make the offer and let it fly.
Mike_Summey dena, I do my own inspections, but keep in mind I’ve been doing this for nearly 40 years. I understand your concern if you have to pay for inspections.
markl have read all of the books and ready to start buying and would like to buy and hold for a long time but still have a question. when the inevitible inflation hits and long term rates go up are you concerned that price appreciation will cease when borrowing costs for consumers rise?
kjh Hey Mike, when do you like to schedule your closing dates?
Mike_Summey Athu, pay your obligations on time, begin building up cash reserves with the banks, and don’t try to grow too fast.
ATHU Thank you Mike
markl mike i am not a computer geek sorry, will the og work or do i need the install program
dena gettleman I know a lot about houses, but i’m no Mike Holmes….. i think i might tend to not catch potentially expensive problems. Is there an AB Tech class that would be helpful?
Mike_Summey Keith, I’ve made as many as 4 offer on the same bank properties before the bank finally accepted an offer. I usually make the offer in mid March, June, September or December and I always go down in offer price with each offer. One banker sent word through their agent that I was moving in the wrong direction. I sent word back asking if he had ever heard of depreciation.
Richard I have windows 7 and could not get OG to load on my computer but was finally able to get the OG to work by loading it on to a SD card and running it from the card while plugged in my laptop, but hope to be able to load it on my computer someday if it gets worked out.
ATHU Mark or Roger do you deal with Mobile Home Parks? If so how do you determine if it is worth the cost?
Richard PS – I had to use a non-windows 7 computer to load OG onto the card first.
markl mike, what is best bet for reo’s? have my agent check mls or should i call all of the local banks and ask them directly. also, i am told that lately the reo’s have dried up a bit. do you think we will see a lot more now that the robo signing controversy is about over?
Mike_Summey mark, price appreciation is definately a function of interest rates. As long as you base your offers on current rates and your best guess as to what they are going to do you should be okay. Keep in mind that when inflation kicks in, rents also go up and the higher rates make it even harder to buy so pool of renters grows. Just a thought.
Mike_Summey Richard, that’s an idea we haven’t tried. Does it seem to work okay that way.
Mike_Summey Hi Penny
Penny Happy 45th birthday roger!
Penny Hi Mike and all you chatters.
ATHU Hello Penny
Mike_Summey mark, try to find a good buyers agent who will work with you. I have such agents in all the markets where I operate and I let them do most of the legwork.
Mike_Summey Hi lbmustang
Roger Dawson Markl: remember that with the Weekend Millionaire system we are not concerned with the sales price of the property since we never intend to sell. We’re only concerned with the income the property can generate. If interest rates go up it will be harder for people to buy which means more renters willing to pay high rental amounts.
kjh Markl : I’d ask your agent to provide properties for you, not to say you shouldn’t call upon them either. Many bank websites often have a list of there REO’s too
lbmustang Sorry just got home from a meeting! Hello Mike and Roger! Happy Birthday Roger!!
Mike_Summey Richard, you say you had to load the OG to an SD card using a computer not running Windows 7??
Richard Mike – Yes, I can run the OG program from the SD card while plugged into my windows 7 laptop, but I had to use a windows XP computer to open the program and load it on to the card first. Seems to run fine from the card on my windows 7 laptop.
markl mike, great thought about inflation and rental rates.thanks. do the buyers agents call the banks directly or just check mls?
Roger Dawson Thanks lbmustang!
Linda Happy birthday ROGER… sorry i’m late to the party.
Mike_Summey mark, my agents wait for the properties to hit the MLS and then monitors them if they are listed too high. They have a way to put in a target price on a property and the MLS will email them if the property drops to that target.
Mike_Summey Hi Linda & Joe
markl thanks mike
Joe from CT Hi Mike
Mike_Summey Richard, thanks for that information. We’ll look into it. That may be a short term fix for people.
Mike_Summey I have an announcement!!!!
Keith Mike – I like the approach to lowering offers each time. I read about it in your book as well. It sends a message! For some reason I didn’t consider it with HUD homes because there’s always so many competing offers but I guess it makes sense.
Joe from CT Happy B Day Roger
Mike_Summey I just got to feed my little one week old grandaughter right before the chat started. She is a doll!!!!
Linda I was wondering if others have some creative ways of getting financing for MULTI family invest & hold properties, my Husband and I are Self employed, see potential but can’t seem to get the $$$
ATHU Congradulations!!!!
markl mike, have you noticed any decrease in numbers of reo’s lately? or same old stuff?
lbmustang Congrats Mike!
broadway Happy Birthday Roger……sorry I’m late!!
markl congrats on the granddaughter!!!!!
Roger Dawson Thanks Joe!
Linda Mike, Congrat’s on your new Baby in the family…
Mike_Summey Keith, I often have the banks send me a form to sign telling me they have multiple offers and asking if I have submitted my “highest and best” offer. I never go up on the offer and I’ve never failed to get one of the properties when the bank did that. Personally, I think they just use that as a negotiating tactic to see if they can get me to increase the offer.
Roger Dawson Thanks Broadway. I’m going to leave the chat in about ten minutes because my friends are waiting for me at the local pub.
Richard Happy to report I received my first accepted offer today. Been looking at a lot of properties but nothing penciled out using your system but we finally found one that made positive cash flow.
kjh Pour some out for the rest of us on chat, Roger. Happy BDay!
Roger Dawson I have a birthing annoucement to make also. On Friday I learned that my Secrets of Power Negotiating book will be published in Russia with an initial print run of 10,000 which is huge.
Mike_Summey mark, the numbers do seem to have declined in the last few months, but as someone said earlier, I think it has a lot to do with the banks pulling back to be sure their forclosures are in order. I know two that I made offers on a few months ago were pulled off the market to correct problems and they haven’t come back on the market yet and are still vacant.
markl mike or roger, do you have any problems with buying SFH with pools for rental?
lbmustang Congrats Roger!
markl awesoem roger
jsj020@aol.com Happy B’day Roger!
markl awesome
Mike_Summey Hi jsj020
barbie congrads on that Roger! that is BIG! oh yes, and happy b-day!
ATHU Congradulations Roger
jsj020@aol.com Hello Mike
markl that is good info mike, thanks
Mike_Summey mark, I reject any SFH with a pool. I don’t want the headache or the liablility.
Roger Dawson Congralutions Richard! Your first purchase is always the hardest. It’ll get easier from now on.
markl what bank was that mike?
Roger Dawson Thanks Barbie!
Mike_Summey Richard, I tell everyone…just keep making offers that will work for you and eventuall you will get one accepted. If you make one per week and only get one per year accepted, having 15 rental houses in 15 years isn’t bad.
Mike_Summey mark, I think it was Bank of America.
Linda I’ve been away for a long time, wondering Mike if there are past chats that talk about GETTING FINANCING? I spoke with a Mortgage broker (I know well) who said getting a commercial loan (5 or more units) is easier than a Residential Loan as they look more at the CASH FLOW OF THE RENTS, vs a personal income, does that sound right?
jsj020@aol.com Mike, When we calculate all the expense, as part of the insurance do we need to carry the “LIABILITY INSURANCE” in addition to the HOI? Is yes, how much “LIABILITY” do you recommend? – TanX!
kjh Have any of you heard that “No Docs” loans are coming back into play regarding financing?
Linda KJH, I was told that those weren’t even on the Horizon, have you heard something different? ANYONE?
Mike_Summey Linda, I think it is entirely a function of each individual bank. I have bank that love SFHs but won’t touch apartments or other commercial real estate and others that feel just the opposite. I have banks looking to make loans and ones looking to purge real estate loans. These are just a few of the reasons I recommend establishing relationships with several banks. Right now the smalleer community banks seem to be a better option than the larger national banks.
broadway I read there are some subprime bonds being offered out there in the market. I knew they’d come back in some form.
Wayne Happy Birthday Roger! Thanks for taking the time to produce the audio series on negotiating. It is the best series on negotiating I have found! Mike congradulations on the new member of your family!
lbmustang Mike or Roger – Is there an amount you use as a guide or a percentage of what kind of montly profit you want to make from the rental amount over the mortgage payment?
Mike_Summey jsj020, you don’t need homeowners insurance on rental properties, you need all risk coverage and liability insurance. Homeowners insurance is for people who are going to live in the property and it covers furnishings, etc.
dena gettleman Mike, how far away do you buy houses. Sounds like you buy farther away than WNC. I like to keep an eye on things and make sure renters are happy. I guess i would have to stop thinking like that…. not be so personally involved.
Roger Dawson Thanks Wayne! You made my day!
Mike_Summey kjh, in my opinion we will not see no doc loans again in our lifetime. The banks were hit so hard they are going to be overly cautious for many years to come.
jsj020@aol.com What is “ALL Risk Coverage” Insurance? What does it cover? What about Flood Insurance (we are in Louisiana)?
kjh I raise the question because in fact I did hear today that some banks have reverted back to them..nothings confirmed though.
Mike_Summey Thanks Wayne
Linda Thanks Mike, have YOU HEARD ANYTHING ABOUT NO DOC’S coming back?? Would be awesome for us, that’s how we’ve bought our last 3 properties. Last one was the week they stopped the program.
kjh I’ll throw that comment out the window
Roger Dawson Forgive me for leaving early but I need to get to my birthday party. See you next month.
kjh Later Roger!
lbmustang have a great bday roger
ATHU Enjoy your birthday Roger
Mike_Summey lbmustang, I’m happy if the property will just carry the mortgage in the beginning. There may not be any cash flow in the beginning, but over time as the mortgage pays down and the rent rises, the margin get wider and wider the longer you own the porperty.
lbmustang Thanks for that info!
Linda Have a great B-DAY Roger,
Mike_Summey jsj020, talk with your insurance agent and ask about the type coverage you need for rental properties. The all risk coverage covers you investment in the property, but not the tenant’s.
lbmustang Do you require your tenants to carry renter’s insurance? I only have a SFH for a rental (was our house before) but I require them to show me proof, is this necessary?
lbmustang So far we have only had military as renters so they are usually good about carrying rental insurance.
Mike_Summey dena, I buy in three markets, one in NC, one in SC and one in AL. I keep all of my purchases within a 10 mile radius of my property managers. That way I can visit a market and see everything in a relatively short period of time.
Linda Why would you require that? Wouldnt renters just cover thier contents?
lbmustang Yes it just covers their stuff, but I feel like it protects them and me. I know alot of appartment complexes require it.
dena gettleman makes good sense
Mike_Summey Linda, we always advise our renters to carry a renter insurance policy. I have a SFH that had a major fire a couple of weeks ago. I was fully covered, but the tenants lost everything because the chose not to carry insurance.
lbmustang I also don’t think a lot of people realize how inexpensive renters insurance is.
Linda I advise my tenants too, and explain the benefits, but I’ve never required it. I figure it’s up to them.
Mike_Summey lbmustang, we rent primarily to military officers in our AL properties and you’re right, they make very good tenants.
jsj020@aol.com Roger, as you and Mike recommend in the “W. M.” course, if we go for 15-years mortgage and all the expenses including reasonable interest on the invested initial capital…..my analysis results show in most cases that the offer price should be substantially lower (45% to 48%) than the asking price to generate positive cash flow.
lbmustang Yes, usually not problem with the rent being paid, especially when you know what their BAH is before they rent so you know if they can afford it or not.
lbmustang oops BHA!!
jsj020@aol.com Is it possible to get these type of low offer to be accepted?
Mike_Summey Hi CArleton, glad you could join us for a few minutes.
ATHU Hello Carelton
markl hey carlton
Penny Hi Carleton!
ATHU Sorry Carleton
jsj020@aol.com Hi Carlton, I have studied your course as well!
Carleton_Sheets You’re welcome. And hello Roger and Happy Birthday!
dena gettleman What is the average amount you pay for a single house and the number of bed rooms/bathrooms you shoot for?
Wayne Mike thanks for the weekend millionaire series. We just bought a fourplex using you calculations. We found some unpleasant surprises but thanks to your Offer Generator this has been the best property we have bought. Thanks for getting the Offer generator made it has been a great program! Thanks Mike!
Mike_Summey jsj020, your calculations are about right. I rarely buy a property for much more that 60-70% of appraised value or asking price.
Penny Roger just skipped out on us to celebrate his BD!
Carleton_Sheets Hello Penny and all of you!
Penny
Keith Hey Carleton
lbmustang Is that 60-70% only on a 15 yr. mtg?
Mike_Summey dena, that varies from market to market and from neighborhood to neighborhood. We just bought a 3 BR 2 BA with garage for $37,700, put $7000 in repairs into it and it rented last week for $695 mo. The asking price was originally $79,900.
Mike_Summey Hi awardssr
Keith Mike, do you use the tax rolls to guess-timate an appraised value, i.e. the 60-70%?
Linda Hello Carleton, have you heard anything about the “no doc” loans coming back? thanks, Linda
Mike_Summey Wayne, thanks. I don’t just hype the OG, I use it to calculate every offer I make.
jsj020@aol.com Carlton & Mike, in calculating expenses how do you deal with the “Lawn-Mowing”?
Carleton_Sheets Dena, I don’t know how Mike would answer this but you can work backwards in my opinion. I believe strongly in getting a minimum of 1% of the purchase price in rental income…and that is a minimum. Preferably 1.5% and it doesn’t matter whether you are poaying $50,000 for a property or $500,000.
Mike_Summey lbmustang, I only use 15 yr financing. If I can’t make it work with that I don’t buy it.
lbmustang Are majority of purchases foreclosures?
Carleton_Sheets Linda, no to “no-doc loans”.
dena gettleman thanks. good info
Mike_Summey Keith, I don’t even think about appraised value or worry about asking prices. I make offers based on what I am willing to pay for the property and I don’t deviate from that.
ATHU Thank you for the information Mike, Roger and Carleton. See you next month..
awardsr do you aquire any property through tax lien auctions?
Wayne Hi Carleton when studying the weekend millionaire program Mike Summey mentioned your program and how it changed his life! I purchased some of your systems and Mike was right I was really impressed. I listen to your audio programs when ever I get the chance. Recently your property management program helped me out with a tenant greatly! Thankyou for being so generous with your experience & knowledge! Thanks!
Mike_Summey jsj020, on SFH the tenants handle the lawns. On multi family that expense is one that goes in the “other expenses” block on the Offer Generator.
Penny goodnight all
Mike_Summey Who is going to win the basketball game???
ATHU UCONN!!
dena gettleman uconn
Carleton_Sheets Wayne, what a nice comment. Thanks!
Carleton_Sheets Good night all! should be a great game!
kjh Thanks for all the great information tonight ladies and gentlemen. I’m off to save the world one property at a time
lbmustang Ummm, it was suppose to be VCU but I’ll still watch!
Mike_Summey I’ll be leaving promptly at 9:00, to watch the game, but if the rest of you want to stay and talk with each other, please feel free to do so.
lbmustang Is foreclosures the best thing to look for?
Mike_Summey I have time for one or two more quick questions.
jsj020@aol.com Mike, so you have a clause in the “Lease” that SFH tenants handle the lawn. Do the tenants purchase their own – equipments?
lbmustang Do you mainly buy foreclosures?
Linda Thanks for keeping this CHATROOM going Mike, I love it even if I can’t always join in.
Mike_Summey lbmustang, foreclosures are definately what I call “don’t wanter” properties. The banks need to get rid of them.
Mike_Summey jsj020, yes all or SFH leases address the lawn requirement.
awardsr Tax Liens?
lbmustang Thanks Mike! I am still learning, but love the info here! See ya next month!
lbmustang Husband comes home this week from deployment !! Yippee!
markl thanks everyone
broadway Mike, thank you very much for the chat tonight. I missed half but, I’ll read every word of the post this week!! Thank you for all you do.
lbmustang Hope to find a rental to buy while he is home!
Linda Thank you for your husbands service to our country, and your sacrifice
lbmustang Bye
broadway Gnite to all
Wayne Good night everybody!
Mike_Summey awards, stay away from tax leins. When you buy them you usually aren’t buying the properties, you are only buying the lein and then you have to foreclose on it. Even if the taxing authority forecloses on the leins, there is usually a redemption period that can be quite long.
lbmustang Thanks Linda, he is in his 26th year!!
Mike_Summey Linda, that’s my son Matt who flies the Apache gunship. But thanks for the thought anyway.
Mike_Summey I’m outta here.
jsj020@aol.com Thanks & Bye
awardsr Thanks for the advice Mike!!
Mike_Summey See everyone next month. The chat will be May 2nd.
Keith G’nite all from Tx
Linda Good night all, hope to chat next month
eppic Hi

Chat Transcript – March 7, 2011

Mike — Tue, 08 Mar 2011 18:42:07 +0000

txfirefighter how are yall this evening
GP good so far. How’s everything?
txfirefighter going great thanks
CHARLIE Hey everbody
txfirefighter HI
Roger Dawson Good evening everyone
RonW Hi
broadway Hello Charlie and Roger. Hope everyone has had a great Monday
txfirefighter good evening
CHARLIE Hey everybody mike will be with us shortly he is having computer problems
CHARLIE Hey roger dawson
CHARLIE Hey broadway
CHARLIE HEY GREG
Greg Hi charlie!
Roger Dawson Interesting article in the LA times this morning about Stockton CA. Forbes named it the most miserable city in America. Big part of the problem is the highest foreclosures in the nation. Property prices have dropped to one third of their high.

CHARLIE Hey denise & everybody else
Denise Hi
CHARLIE Hey jason did you have good trip to alabama
Jason Great trip…hello to all
Greg Roger, thanks for the note on Stockton, CA.
Roger Dawson Obviously this puts a lot of homeowners into the rental category. Rents stay high and investors can afford to buy the propeties and rent with positive cash flow.
CHARLIE Jason how is house coming
broadway Roger, have you heard the talk about doing away with 30 year mortgages? I’m wondering if you think that would have a significant positive impact on rentals?
Jason looks different every day…ready to have the extra space to say the least
Greg @Roger. In Boston, the rents are stable or going up …
CHARLIE Jason you will need it soon
Joshua Roger, very interesting. What do 3/2/2 1500 sf homes rent for more or less in that area?
Jason indeed…evonshire coming along?
hawkeye775 Good evening everyone
CHARLIE Evonshire is starting top come around, has 5 to 6 weeks to go if help shows up
txfirefighter I am the new guy in here I guess. I just finished the fourth book in the weekend miliionaire series and jst wanted to say thank you for putting out such good books.Very interesting.
Roger Dawson Broadway: I hadn’t heard of that but in Canada nearly all mortgages are due in seven years. People are just used to refinancing every 7 years. Mike and I have always advocated paying loans down in 15 years if you can. You save a fortune in interest which translates into cash flow.
Jason very good
CHARLIE HEY MIKE
hawkeye775 Hi Mike
Jason He has arrived
Roger Dawson Thanks txfirefighter. Appreciate the kind words.
Mike_Summey Well, I finally made it. Had to go to another computer.
Greg Mike, stay away from computers, they’re a fad …
Mike_Summey I think I tried to logon while my computer was doing a security update in the backgrund and the two programs clashed.
CHARLIE Txfirefighter what kind of question you have after reading the books
txfirefighter you are welcome roger
RonW Mike & Roger, Any advice on the best way to start off with limited funds? I would like to grow as fast as possible.
Mike_Summey Hi everyone. Sorry I wasn’t here to welcome you as you entered the chat.
txfirefighter Charlie the first question would be when is the next book coming out? haha
Mike_Summey Ron, basic rule # 1 “Limited funds, limited growth.”
CHARLIE Tere is alot of good information the the 4 books you read, ready to apply what you learned
RonW Mike, Can I buy a house and borrow against it’s equity to get the next house?
Mike_Summey Ron, in today’s times, you are going to have to have some money to invest, but don’t let that deter you. I had virtually no money when I started. I just took it slowly, bought one house the first year, two the second year and gradually built up my portfolio to the point I can now add properties much faster. Be patient.
txfirefighter I bought my first rental this year with $200 monthly positive cash flow. I am a full time firefighter so dont have a ton of money to invest but willing to learn and put everything I have into it but with still having a cash reserve.
Roger Dawson I’ve got to admire firefighters. For some reason, I’ve never had an urge to run into a burning building.
Mike_Summey Ron, if you can get enough to buy one house for cash, you can often get it rented then put a loan on it for enough to buy the next house for cash. As for borrowing against the 10-20% you put down on a purchase, that’s pretty much history.
Mike_Summey Denise, where are you from?
Denise Menifee, CA
Mike_Summey Denise, Jason’s wife’s name is Denise so it caught my eye.
Mike_Summey The Jason in the chat is my son Jason.
Mike_Summey I thought it might be his wife looking in on him.
RonW Mke, If the house is appraised at $100,000 and I buy it for $80,000 with 10-20% down, can I borrow against the $20,000 equity?
Joshua Mike, do you buy home warranties for your rentals? I have had a few over the past year and it has worked quite nicely. Cost $300/yr with a $60 service call usually paid by tenant. I think it saved me on total repair costs with the mgmt co. Your thoughts?
txfirefighter thanks but I love my job. I admire people like you, telling your story so people like me can learn.
Mike_Summey Ron, you probably will not be able to borrow against that equity. The banks are simply not loaning 100% anymore.
Mike_Summey Joshua, I’ve never bought a home warranty so I can’t really advise you.
RonW Mike, So the best way for me to get started is finding a seller that will carry back the financing?
Roger Dawson I found myself unable to type a message so I had to log out and in again.
Greg Mike, maybe Ron should start w/ a quad, and live in one of the units? I think one can still put down on 3.5% w/ good credit?
Greg only 3.5%
Mike_Summey I’m back to my computer now. It finally started working right.
RonW Greg, Just bought a house and moved into it 1 year ago.
Mike_Summey Greg, who is loaning on investment properties with 3.5% down. I haven’t heard that.
txfirefighter Greg, how can you get into a quad with only 3.5%
hawkeye775 I think 3.5% is only if you fall in the USDA or FHA loans.
RonW FHA
Roger Dawson Mike: Are property managers good leads on rentals for sale? Do they have owners who don’t want to be landlords any more?
hawkeye775 And it is for personal not investment.
Greg Mike, I heard Fannie still has a 3.5% down program if it’s owner occupied.
Mike_Summey Roger, I’ve bought several properties that my managers brought to my attention. I have even bought a few from the managers themselves.
Mike_Summey Greg, I’m not a good source of information of Fannie or Freddie loans. I haven’t been able to qualify for one of them in over 30 years. Once you own a certain number of properties you don’t qualify for their loans which will be sold on the secondary market.
Joshua Mike, home warranty may be something you want to consider. $300 a year for repair costs or spending say $600 to $1200 (5-10%) per year from your repair reserve.
txfirefighter Is assuming mortgages a good way to get started?
Greg Mike, thanks for the commentary. Just thinking of ways to get people financed out of the chute …
Mike_Summey Joshua, but that assumes you will spend $600 – $1200 on things covered by the home warranty. It doesn’t cover things like paint, carpet, cleaning, etc., which is where most of the maintenance expense falls.
hawkeye775 I recently purchased two duplexes without much money out of pocket.
Mike_Summey txfirefighter, you can still assume mortgages, but you must qualify to do so. It’s not like it used to be where you could just assume the loan and start making the payments.
Roger Dawson Mike: isn’t it amazing that they won’t give you a loan because you’re a rich investor but they’ll let Wall Street package crap loans and resell them.
hawkeye775 I used hard money to purchase the properties, and refinanced within 3 months. The appraised value was much greater than the purchase price.
Greg hawkeye, interesting …
Mike_Summey Roger, that is so true. In 40+ years I’ve never received a call from a bank about a late payment, yet I can’t qualify for Fannie & Freddie’s loans.
hawkeye775 The short term interest wasn’t cheap, however.
Denise Hawkeye what was the terms of the hardmoney ?
hawkeye775 4% up front, and 1% per month.
hawkeye775 I’d have been better off finding a private lender that would be willing to take 6 or 7% APR. But was in a hurry to close.
Mike_Summey Hawkeye, that’s one way of doing it. Another is to find someone with money in bank CDs and offer them 4-6-8% for the use of their money to buy properties for cash and then when the properties are rented and cash is coming in, go get a bank loan and pay back the person who’s money you used. Many people have family members with money that they never think about asking.
Joshua Mike, good point. Seems that on most properties one would have over $300/yr expense on things like plumbing, appliances, electrical, HVAC, etc which are covered however. At least I have…your properties have less?
hawkeye775 The duplexes have put a bit of a crunch on me. Had to kick 3/4 tenants out, and do a lot of the delayed maintenance up front, but it is working out. More painful than I would have liked in the short term.
Greg Mike, great idea … “friends & family” financing!
Mike_Summey Joshua, I have not found that to be the case on my properties. Remember you have to pay the cost of the home warranty on all your houses and you may only have a large expense on a few of them.
Roger Dawson Joshua: I’m surprised to hear that plumbing and electricity are covered by home warranties.
Mike_Summey Greg,
hawkeye775 I probably won’t be purchasing again for a year unless I can find private money lenders (which I plan on pursuing) or find some kind of seller financing/assumable loan.
Mike_Summey Greg, in the past I have used family money to purchase many homes, paid my family members a nice return, (much more than they were getting at the bank) and still made a nice profit for me.
Greg Mike, I never thought seriously about family money, but will now! Thx …
Mike_Summey One way to buy with little or no money down is to find a seller with a small or no mortgage, take out a 1st mortgage for 25-50% and then get seller financing for the balance.
Joshua Roger, yeah I’ve had an electrical panel problem they fixed as well as a clogged drain, however Mike makes a good point, maybe I’ve just been lucky by having these on a few olders homes I have
Mike_Summey The seller gets money at the closing to pay off the small mortgage or just money to put in his pocket, then get a monthly income stream.
Mike_Summey Joshua, I don’t buy older homes. I try to stay with ones built in the last 15-20 years.
Mike_Summey I’ve bought about 25 homes in the past couple of years using Charlie as my buyer’s agent and I don’t think any of them have been over 15 years old. Most have been 5 years or less.
RonW Mike, How much operating capital should I have to get going with my first purchase?
Mike_Summey Ron, each person has their own comfort level. I try to keep at least 6 months of my total obligations to banks in deposit accounts with the banks I borrow from. It took several years to get to that point, but I used it as a goad from the time I started. It makes a huge difference to the banks.
Mike_Summey goal
Mike_Summey Somebody ask Roger & Jason & Charlie a question or two. You are wearing my fingers out.
Greg Hey Roger, I just bought the latest copy of your negotiating book after someone I highly respect said it was the best book of its kind …
Joshua Mike, yeah, I wish I had that luxury. Very difficult to get homes 1990 and newer that break even in Houston (especially with 15 yr amortizations!), so I’ve resorted to homes built in the 80′s where you can make the numbers work
Roger Dawson Wow, Greg. Thanks! You made my day!
Mike_Summey Joshua, have you made offers on the newer homes for what you want to pay or are you just assuming you can’t get a deal on them. Ask Charlie about some of the offers I make.
Mike_Summey Hi Richard
txfirefighter Joshua I am about 45 minutes from Austin and I feel your pain. The austin area is abetter market but it is so far to check on properties.
Greg Roger, kudos where kudos is due!
Jason The deals are definitely out there it may just take some patience locating them on your terms
Joshua Charlie, go ahead. Yeah Mike, I still make offers on them, but have never got one after 200-300, so not I tend to not focus on them unless I can get decently close to the REO asking price
txfirefighter Charlie how does one go about finding a agent that is willing to ask lower prices and not be afraid to keep doing it.
Joshua that is 200-300 offers
CHARLIE Joshua you have to make 10 to 15 offers and you may get one or two of them accepted
Mike_Summey Joshua, it may be the way you are making the offers. Are they offers where you are asking the lender to finance them?
CHARLIE Txfirefighter you have to call several agents and intrview them and let them no what you are doing up front and see if they are willing to work with you. That is how me and mike atarted
Mike_Summey Joshua, I’ve made offers that were less than 50% of the asking price on REO properties and gotten some of them accepted.
Joshua Mike, Charlie, no, all cash. Again, I have made hundreds of offers on those newer homes and never once accepted. While on the homes in the 80′s I can maybe get 1 out of every 40 or 50 offers.
txfirefighter charlie what i found is the will do it a couple of times and then say that it will never work in todays market…guess I need to keep looking and just find the right one
txfirefighter Mike wow 50% off REO thats impressive
CHARLIE Joshua are you tracking the properties till they sell that you are making offers on. We have bought several properties 6 months latter
Mike_Summey Charlie, tell everyone how many times we have been rejected only to have the banks come back later and accept much less than our original offer.
Mike_Summey Everyone, I have a policy and Charlie can confirm this. The first offer I make is the best one the bank is going to get. Each subsequent offer is for less.
Roger Dawson Joshua: it’s great that you’re making so many offers. That’s the way to do it. Are you using our Offer Generator software to crank them out?
Mike_Summey Good point Roger.
CHARLIE Mike this has happended several times and one a couple of occasions the banks called us and asked if we were still interested in there properties.
Mike_Summey Hi Wild Billy
txfirefighter Mike is that only on REOS that your first offer is the best or is that on all offers?
wild billy hi
Joshua Charlie, yes, my buyer’s agent keeps track of them all and follows up. Even after properties have been on the market for 180 to 300 days, the bank still won’t accept our original offer. Guess they do things a little differently in TX than in AL and NC.
Mike_Summey txfirefighter, that is on all offers. The longer a property sits on the market the less I am going to offer.
txfirefighter Mike thanks for info
Roger Dawson Mike, reducing your offers like that is the way that Donald Trump bought the Mar-A-Largo Mansion is Palm Beach. His first offer was $25 million and he paid $10 million.
Mike_Summey Joshua, Roger asked if you are using our Offer Generator program. If you are, you should be able to easily show a bank why you can only pay what your are offering. I’ve actually asked bankers to show me how I can pay more than I offer and not put myself in the same position the person was in that they foreclosed on.
Joshua Roger, Mike hasn’t gotten the OG to work on my Windows 7 yet! He knows the story as I’m waiting for him to upgrade so I can use it. I still do it all with Carleton’s software. Sorry guys! Just let me know when you have it ready!
Mike_Summey Roger, over time, banks are beginning to understand that my first offer is the best they are going to do. When they know that they have to make the decision to take the bird in the hand or hope for two in the bush.
RonW Will OG eventually work for Windows 7 64bit?
Roger Dawson I’ve been telling Mike for years that he needs to get a Mac.
Mike_Summey We have encountered some problems with loading the program on Windows 7, that’s why we have the notice on the website in the onlie store.
Mike_Summey online
Roger Dawson You do mean on line store, don’t you!
Joshua Mike, these aren’t lcoal bank listings. these are the major bank REOs,,BOA, Chase, Wells, Fannie, etc. They hire asset mgrs to dispose of them. No one ever speaks with a buyer about the “logic” behind my offers.
Mike_Summey Ron, I am talking with our programmer to try to determine if it can be a simple fix or if the program is going to have to be completely rewritten.
txfirefighter Roger, can you pay and download the og off the website or does it come only on cd?
Mike_Summey txfirefighter, it is only available on CD. Works great on everything except Windows 7.
Roger Dawson I’m off to Warsaw, Poland for a speaking engagement next week, but I’ll be back in time for the April chat. Goodnight everyone!
Joshua Mike, question–do you see any problems with me getting a survey during my cash out refinance instead of at the cash purchase?
broadway Mike quick question, do you get a survey on each property you purchase even if the property is in a platted neighborhood?
Mike_Summey Joshua, the survey is to protect you, not the bank. What if you make the purchase and then when you go to get financing you find out the house is 4′ on the neighbors property or other such problem? You have the problem and the bank won’t loan you the money.
Jason broadway we do get surveys on all properties regardless
Joshua Mike, Jason, do you take mileage and gasoline deductions on your taxes for any time spent doing inspections, meeting with mgmt co, etc?
broadway Jason, thanks!!
Jason Joshua we deduct everything we can when conducting business…just make sure it can be documented that it is proerty related \
Joshua Mike, great point on the survey. Closing one this Thurs…will get it done before then!
Mike_Summey Everyone, on the matter of surveys, we always get a survey so we can get title insurance without an exception to what a survey might reveal.
Mike_Summey I’ll stay another 5 minutes since I was later getting here. Does anyone have any last minute questions?
RonW Hey Uncle Mike, What was it you said about borrowing money from family members?:D
Joshua Mike, I’ve bombarded you tonight! Thanks for all you do for all of us
txfirefighter Mike thank you for your time and answering all my questions and thanks for everyone else for putting up with the new guy here.
Jason come back!
Mike_Summey Ron, I made a deal with my banks many years ago. I tole them if they would stay out of my business, I’d stay out of theirs.
broadway I agree with Joshua, after reading your books, you have tons offered to all of us.
broadway LOL
RonW Thanks.
wild billy Great Job Mike, glad I tuned in.
Joshua Mike, since you’e sticking around, question about townhomes (I know you’re opposed to condos). If they share the same wall, no HOA, has the land (albeit small ~0.03 acres)–do you offer on these?
broadway Hope everyone has a great evening. Hope to see you all next month!!
Mike_Summey Everyone, this is your opportunity to get answers straight from Roger and me and several others and it doesn’t cost you a penny. Tell you firends about our chats and invite them to get involved too…sepecially any who might have some money they want to make a better return on than what they are getting at the bank.
CHARLIE Jason are you coming on friday
Greg Thx Mike, see you next month!
hawkeye775 Goodnight all
txfirefighter good night thanks everyone
Jason Not sure yet…with Denise as pregnant as she is and delivery coming just any day probably not…plus Mom and Dad are going on to Columbia to see Matt
Mike_Summey Joshua, I just bought 5 townhomes last November and will probably buy 9 more over the next 3-4 months, but they are in an unusual situation. Ther is a total of 15 in the complex and I will own 14 of them and there is no HOA. This is a rare situation.
Mike_Summey Well, goodnight everyone. I’ll see you here next month. Until then…HAPPY INVESTING!!!
RonW Good night. Thank you all for the insight.
Jason Goodnight…good month!! See you next time\
CHARLIE Goodnight everybody