Chat transcript, 6-06-04
Posted on June 6, 2004
Welcome to the chat, Ralph Roberts!
[Investment Chat]: Ralph Roberts has entered (7:59 pm)
Ralph Roberts: hi Mike
Mike Summey: Hi
[Investment Chat]: Roger Dawson has entered (7:59 pm)
Mike Summey: Glad you’re here!
Ralph Roberts: Roger!
Mike Summey: Well, its just us chickens right now.
Roger Dawson: Hi Mike and Ralph!
Mike Summey: Rog, did you play golf today?
Ralph Roberts: There are 7 people on the site right now.
Roger Dawson: I was at my grandaughters 7th birthday party today.
Mike Summey: I’ll bet that was fun.
Ralph Roberts: You could have taken her to play golf.
Mike Summey: I played yesterday…85!
Roger Dawson: She and her mother live in a home like the first home I bought for $12,700. It would sell for $550,000 today, and mayber rent for $2000.
Mike Summey: That was after 103 on Wednesday
Mike Summey: Is this Astride
Roger Dawson: I shot 102 on Saturday and was thrilled, after my 116 on Wednesday.
Mike Summey: Ralph, are you sure the email got out to everyone?
Roger Dawson: Yes, Mike, my grandaughter is Astrid. You’ve met here.
Mike Summey: I’m beginning to wonder if the email got to everyone. Usually there are people waiting on us before 8:00.
Ralph Roberts: I got it, Mike…. several times.
Mike Summey: Did you get it Roger?
Roger Dawson: Ralph, I was able to take that DVD demo and duplicate it here. Are you able to some of it up on my website?
[Investment Chat]: Warrior has entered (8:04 pm)
Roger Dawson: Yes, I got the Email, but it wasn’t until Thursday or Friday.
Mike Summey: Hi Warrior
Ralph Roberts: I am not having much luck with it, Roger.
Ralph Roberts: But no trouble with your video programs.
Mike Summey: Warrior, where are you from?
Ralph Roberts: hi Warrior
Ralph Roberts: welcome
Roger Dawson: Ralph, I’ll try to get you the script of the excerpts to use by Tuesday.
Ralph Roberts: thanks!
Roger Dawson: Warrior, where do you live?
Warrior: Hey! I live about 2 miles from Mike!
Mike Summey: Things are getting started slow tonight.
Ralph Roberts: I live about two miles from Mike, also.
Roger Dawson: I’d be a real estate Magnate, too, if I lived in Asheville.
Mike Summey: Warrior, you’ve got our undivided attention for now…any questions?
[Investment Chat]: Penny has entered (8:07 pm)
Mike Summey: Hi Penny
Roger Dawson: Hi Penny!
Penny: Hi, I did make it.
Penny: Hello Roger.!
Penny: and Ralph!
Warrior: Mike, I was reading in your book today and I am getting the concept of Negotiating. What type of attitude msut I have? Straight face or what?
Mike Summey: We’re off to a slow start tonight. Penny & Warrior…did you get teh email announcements about tonights chat?
Penny: Yes, got it yesterday.
Mike Summey: The email program on the website has been malfunctioning for the past several days, so the notice went out late.
Roger Dawson: I think that your negotiating style should match the style of the people with whom you’re dealing. If they are very analytical, you be that way too. If they are soft, warm, fuzzy people, you be a people person too.
Ralph Roberts: hi Penny
Warrior: So then I must adapt my style and personality to meet that of the people I am working with?
Mike Summey: Warrior, Roger is the negotiating expert. Listen to him. My answer is if they don’t do what you want punch them in the nose. Roger says that’s not the best approach.
Roger Dawson: Warrior, yes that’s right.
Warrior: Mike, I used to be the same way !
Mike Summey: I’ve learned a lot from Roger. He’s the best.
Penny: Yes Roger, you are right. People sometimes tend to think someone is a little wierd if they are not just like them. Thats human nature.
Mike Summey: That’s why we have made such a good team on the Weekend Millionaire project. We bring such different talents to the table.
Roger Dawson: For example, some sellers really care about who lives in the house when they leave. Mike just cares if the deposit check will clear the bank and can they get the financing.
[Investment Chat]: Testut has entered (8:13 pm)
Mike Summey: Hi Testut
Roger Dawson: Hi Testut!
Mike Summey: Welcome to the chat.
Ralph Roberts: Hi Testut
Testut: Hello Mike and Roger
Mike Summey: we’re just getting started, so jump in anytime.
Warrior: Roger, If a house is going for 69900 in the Asheville area and I put an offer to purchase in for 45000 and the agent says, “I not going to let you take advantage of this person like that ” then what do I do?
Mike Summey: Warrior, you might explain to the agent that if he says that he is letting his seller buy his property back for $45,000 hoping he can get a better offer.
Roger Dawson: Warrior, you’ve got to give reasons why you’re making a low offer. Tell them about NOI and why it will only work for you at this price. If you don’t give a reason, they think you’re trying to cheat them.
Roger Dawson: Always challenge an agent when you ask them to present a low offer.
Warrior: This is what I came up with as the NOI back in December for a house I was trying to buy. The agent would not even let me explain!
Roger Dawson: You say, “here’s what I want you to present to the seller.” But I reserve the right to meet with the seller if you can’t get it accepted.
Roger Dawson: People always ask me if the agent if working for the seller or the buyer. Truth is, neither one. They are working for themselves. Show them how they can put the deal together.
[Investment Chat]: MarkGinNC has entered (8:17 pm)
Ralph Roberts: hi Mark!
Mike Summey: Hi Mark
MarkGinNC: Hi its great to be here.
Mike Summey: Warrior, is the house you are looking at owned free and clear or is there a mortgage on it?
Testut: Mike, I am just getting started. I have a meeting tomorrow with a property management comany tomorrow that specializes in single family homes. They also have an agent that helps locate rental properties for investors, the thought being that they want to help me find a property and then have the opportunity to manage. Would you agree that this could be an asset to my team?
Roger Dawson: In a seller’s market, you’re going to get a lot of rejected offers. Don’t let that stop you. It’s a numbers game. If you’re thinking, “That didn’t work, so nothing will work,” you’re sunk.
Mike Summey: Testut, absolutely! If you can develop a relationship with a good property management firm they will often bring deals to you when they feel they will get to manage them in the future.
MarkGinNC: Mike, wanted to let you know the I saw you in Ashville a month or so ago and am closing on a property in two weeks and have a renter signing a lease next week.
Mike Summey: I’ve bought several properties that were referred to me by the management companies I use.
Roger Dawson: Congratulations, Mark!
Mike Summey: Mark, that’s great! Where did we meet?
Warrior: Mike, I have a 3BR 2BA home in the Asheville area. Pool, full basement, 1983 .36 acres very good shape. What could I rent it for?
Mike Summey: What area?
MarkGinNC: I saw you at the CREIA meeting, we spoke briefly, you know my father in Anderson, he was the newspaper publisher.
Mike Summey: The pool is a liability for a rental property.
Warrior: Off old #20 past the BP on Hickory Drive.
Mike Summey: Oh yeah, Mark, John Ginn is your dad, right?
Testut: Mike, do you know if Tennessee is a pro landlord state? I know California is more pro tenant.
Mike Summey: Testut, I don’t know about Tennessee. I’ve never done any business there.
Mike Summey: Warrior, what type pool is with the property?
MarkGinNC: yes, I am in Boone now where the market is dominated by student renters. A little different market but I have some trusted advisors showong me the ropes.
Warrior: Inground 14 x 28
Roger Dawson: In minority areas, California judges can be very protenant. In other areas, they’re okay. I evicted one tenant and the first think the judge told the tenant was, “Don’t even try telling me that you can’t afford to pay the rent.”
Mike Summey: Mark, I’m sure you will do well. Your father is a fine man. I knew him in the 1980s & 1990s.
Mike Summey: Warrior, who will take care of the pool?
Warrior: How do you feel about property in Madison County 30 minutes and closer to Asheville
Warrior: I guess I need to know if I need to feel it in or not?
Mike Summey: There are some very good buys in Madison Co., but you have to be careful. The rental market there is not as strong as it is closer to Asheville.
[Investment Chat]: Clair-MO has entered (8:26 pm)
[Investment Chat]: TT has entered (8:26 pm)
Roger Dawson: Hi Clair
Ralph Roberts: welcome Clair!
Clair-MO: Hi Roger
Mike Summey: Warrior, if I owned the property, I would fill it in because of the liability risk it poses.
Mike Summey: Hi Clair & TT
Clair-MO: Hi Mike
Warrior: Will the price of property in Madison Co. off-set the expensive nature of Asheville?
TT: Hi
Ralph Roberts: welcome TT
Testut: Mike, does a home with a basement add value as a rental?
Roger Dawson: What’s a basement?!!
Testut: Something you would never see in California
Mike Summey: Warrior, the price will be better in Madison county, but the vacancy rate will probably be higher unless the property is close to I-26 where the tenants can quickly get into Asheville.
Warrior: Roger, is it better to neg. with the seller directly or the agent representing?
Warrior: Thanks Mike!
Mike Summey: Testut, personally, I like basements. I have several houses with them and they all rent for more money and stay rented better than the ones without basements.
TT: Mike do you own any property in the Richmond Hill area in Asheville?
Roger Dawson: Warrior, I think the best buys are from For Sale by Owners, or institution owners, like banks. If the property is listed with an agent, the agent will do everything they can to stop you from dealing with the seller directly.
Warrior: I have experienced just that!
Mike Summey: TT, no, the closest thing I have to there is on River Road and in the Erwin Hills area.
TT: I am negotiating for a bank owned property in that area.
Mike Summey: I know the area well, I build several of the home there 40 years ago.
Warrior: Mike, Roger-How do you find out about properties that banks own?
Testut: Mike, after 7-10 single family homes is it time to venture out to small apartment complexes?
TT: I think it is a desirable rental area.
Roger Dawson: REO is “real estate owned.”
Warrior: Mike, I talked to you last night about the rental property I have in Avery County. Should i have someone up there manage it for me? It is the only rental prop. that I own at this time?
Mike Summey: Testut, if you already have several single family homes, you probably do want to start looking a small multifamily deals. I’d just be careful to not look at too big a project in the beginning.
Clair-MO: Sometimes I have found that REOs lists are somewhat covet by the banks until you have proven yourself of being serious investor.
Testut: Mike/Roger, thanks for the info, got to run.
MarkGinNC: Warrior, where in Avery county is your property?
Roger Dawson: Apartment houses give you better cash flow, but they are not as liquid as single family homes. Eventually you should develop a mix.
Ralph Roberts: Thanks for dropping in, Testut.
Warrior: On Hickory Nut Gap Road-
Mike Summey: Warrior, I’d get a professional manager to handle it if I were you. Managing properties will never make you as much money as spending your time looking for other deals will.
MarkGinNC: I know the area, are you handling it as a long term or vacation rental? There are
MarkGinNC: vacation rentals in the area but that is a REAL job. Sorry
Warrior: Mike- what is a standard fee for a Management service?
Roger Dawson: I’d stay away from rental properties, or any properties in resort areas. Stick with bread and butter.
Mike Summey: Clair, my experience is that most banks have no problem sharing their list or REO properties, they may; however, not be willing to talk seriously with you until they know you are capable of buying.
Warrior: MarkG, I used to live there and worked in the School Sysytem. We are renting it to two college girls!
Clair-MO: I agree
Mike Summey: Warrior, the fees will vary depending on the area and your ability to negotiate. It should fall somewhere between 5% and 12 % of the rents collected.
Mike Summey: Where are you from Clair?
Clair-MO: Springfield, Missouri
TT: There are several brokers who only handle reos that I have developed a relationship with.
Warrior: Mike, Roger- Is there any hang ups or cautions I need to know about before I seek help buying properties from Mortgage companies?
Clair-MO: I have investment properties in seven States
MarkGinNC: How has it gone. I have had great luck with college students in my rental but know of people who have horror stories. There is also more yearly turnover to college students so I think it would be tough to manage long distance.
Ralph Roberts: wow!… that’s good, Clair!
Mike Summey: Springfield is a great place. I was there a few years back visiting.
Clair-MO: Bass Pro Country!!!
Roger Dawson: I spoke for a National wide mortgage company on Friday. They wouldn’t own any property because they sell off all their loans.
Ralph Roberts: I have relatives in Springfield.
Mike Summey: Clair, how do you manage properties scattered throughout 7 states? I think everyone would be interested in that.
Clair-MO: I specialize in small apartment complexes Mike and I have on site managers
Warrior: M-G –I has gone great. I have had the same rentor for three years now. She gets a new room mate each year and she has graduated and still want to live there!
Mike Summey: Clair, what size complexes do you have?
Clair-MO: Between 4 to 89 units
Clair-MO: Altogether I have abiout 297 Units
Mike Summey: Clair, then you know the value of having your properties managed by someone else. Imagine if you tried to do it yourself.
MarkGinNC: Thats great. I have a friend who teaches with me at App who used to teach at Lees McRae, she did the same thing as you when she left and the student she rented to now has been in the house 16 years.
Warrior: M-G, My rental is a 3BR 2BA DW on perm foundation and rents for 750/mo. What does yours rent for if I may ask?
Mike Summey: Clair, you need to be teaching us. Sounds like you’ve got it figured out pretty well.
Clair-MO: LOL!! I know
Warrior: Do you ever think about getting another rental in the Lees McRae area?
Clair-MO: I have your book and I tell the folks that I mentor to pick it up!!! I love the negotiation part, Roger, You’re the Man!!!
MarkGinNC: I have a 4BR 3BA house that we have rented for $1600 starting in August, $1300 last year. THe one I close on soon is a $BR2.5BA that will rent for $1300.
Mike Summey: Our participation is very low tonight. Do you think it is due to the late notice we got out or the fact that it is summer and people are out doing fun things tonight?
Roger Dawson: Thanks, Claire! You made my day!
Clair-MO: You welcome!
Warrior: Mark G Where is it located?
TT: Warrior how has renting a dw been? Quality of tenants/vacancy?
Warrior: Very effcient! It looks just like a stick buit home.
Clair-MO: I need to say something that my name Clair is a man’s name therefore I am a man!!
MarkGinNC: Both are close to Boone, about 4 miles out 421 towards Wilkesboro, the older one is right on the New River and the new one in a little development there.
Mike Summey: I’m glad you made that clear.
TT: How old? Did you get a good deal?
Roger Dawson: Damn, I was just about to propose to you Claire!
Clair-MO: LOL
Ralph Roberts: with that many properties, you still might, Roger.
Mike Summey: Roger, its Clair, not Claire! Quit flirting or I will tell your wife.
Ralph Roberts: 
Roger Dawson: Nobody’s perfect!
Clair-MO: Don’t tell my wife that I’m not perfect!!!
TT: Warrior where is your dw,and did you get a good deal on it?
Mike Summey: Clair, I’d like to talk more with you about a new project we are looking at. Can you send me a email with your contact information?
Clair-MO: Sure! No problem
Mike Summey: Roger and I expect to have a couple of big announcements within the next few weeks. Those of you who are registered on the website will get the first word about them.
Roger Dawson: Is anybody in a buyer’s market?
Clair-MO: Is there an email address where I should the info to you Mike
Warrior: In the Banner Elk-Newland area. Yes an okay deal. I bought it before I got Charleton’s course or Mike and Roger’s book.
TT: Warrior how old is it?
Warrior: I mean Carleton’s!
Clair-MO: I have found the Mid-western States are a great buyer’s market
Mike Summey: I thought Carleton would join us tonight. I talked with him yesterday and he said he would try, but apparantly something else came up.
Warrior: About 8 years and the people that sold it to us were very good people. They only had it on the market for about 3 months-
Clair-MO: Carleton Sheets?
TT: Mike,Roger,Clair is this a buyers market in general for apartments?
Mike Summey: From what I can tell, the entire middle part of the country from Texas to Minnesota is a good place to invest.
Clair-MO: I agree
Mike Summey: Claire, yes!
Ralph Roberts: Clair
Roger Dawson: We highly endorse Carleton Sheets material. I’ve know him for over 20 years, and he’s one of the best guys on the real estate circuit.
Ralph Roberts:
Mike Summey: oops
Clair-MO: Nine years ago I bought his course and now here I am!
Mike Summey: Clair, Carleton is a great friend of ours and he has some very good materials.
Clair-MO: I have a young lady in Maryland that keeps telling me that I’m her Carleton Sheets!!!
MarkGinNC: So Clair, why do you invest in aprtments and not SFHs
Clair-MO: More money in it!
Warrior: Mike, What if I am $100 in the hole when I do the NOI on a property? Should i stille seek to buy in the negative?
TT: Does anyone think this is a buyers market in general for apartments?
Mike Summey: Warrior, I don’t buy anything that I have to feed to own.
Warrior: TT- I am new at this Sorry!
Warrior: Mike-Got it!
Mike Summey: We call those alligators.
MarkGinNC: So Clair did you start in SFHs or jump straight into aprtments?
Clair-MO: I have negotiate a deal on a 24 Units in Nebraska for 350k with a deferment of the second for 24 months and the owners are taking a 35% profit from the positve cash flow
Warrior: Mike, What is your experience with DW’s as far as rentals
Clair-MO: My first real estate transaction was a package deal on 7 homes bread and butter properties
TT: Warrior I’m not Mike but i have some sw’s and I like them
Mike Summey: TT, I’ve been at this for nearly 30 years. I’ve found deals in all market conditions. What I find is that there are more deals at some times than others, but if I look, I can always find deals no matter what the market conditions.
MarkGinNC: Wow, seven homes at once, that is quite a wAay to start.
Warrior: TT- How do you aquire your SW’s?
Clair-MO: I was desperate at the time and it took me 9 months of intensively studying the Sheets’ program
TT: listed foreclosures ,I offer about half listed price never more than 15-18,000.
Clair-MO: Not that I was slow but I wanted to be sure that I didn’t missed something
Mike Summey: Warrior, I personally don’t like double wides, but I know people who have made a lotof money with them. I feel they are better for older investors who aren’t looking a long term as I look.
MarkGinNC: So I assume the deal worked out for you. How long before you switched to apartments?
Mike Summey: Clair, have we met?
Warrior: Mike, I am 32 so it is probably not good for me to pursue that ave, right?!
Clair-MO: No, Mike! If we met you would remember!
Mike Summey: The problem with double wides and single wides is that they depreciate in value whereas houses and apartments appreciate.
Warrior: What is better 2BR 2BA, 3/2, 2/1? Anybody? Which ones rent better?
Clair-MO: Mark, I switched over to 4 plexes right after the seven homes. I have 18/4-plexes
TT: mobile homes are built to last about 60 yrs. that is a fairly long time,not as long as stick built but long enough for me
Mike Summey: Warrior, you can generate short term cash flow better with SW & DWs, but in 20 years you won’t have much to show for it.
MarkGinNC: Not that I am an expert Warrior, but I only look at DW’s if the proerty they are on could hold another unit because as Mike just said while I was typing, the value of the unit is going down so in the long run the land better be good for something else.
[Investment Chat]: simon has entered (9:03 pm)
Mike Summey: Hi Simon
MarkGinNC: TT-have you seen a 60 year old DW?
Clair-MO: Hi Simon
Warrior: I understand!
simon: hi mike
Mike Summey: I think Roger has left us.
simon: hello all
TT: not yet!!!
Warrior: Mike and Roger, How do I get the big news that you guys have coming out soon?
Mike Summey: simon, where have you been? We’ve all been waiting for you.
[Investment Chat]: Roger Dawson has entered (9:05 pm)
Ralph Roberts: Roger’s back!
Mike Summey: There’s Roger.
Mike Summey: Warrior, register on this website and you will get it first.
Warrior: Thaks!
Roger Dawson: Sorry! California is still here, but my computer quit working. Damn Union computers.
Ralph Roberts: 4,000 words so far tonight… not bad for so few people.
MarkGinNC: What about modulars, any body have andy experience or opinions on investing in modulars?
Mike Summey: Roger, are you on your good computer or that piece of junk I’ve been trying to get you to throw a way for years?
Warrior: Good Question!
MarkGinNC: Geez I can’t type tonight.
Roger Dawson: I had to get off the good computer and go back to the piece of junk. It works.
Clair-MO: Roger, I have heard that Californians are thinking of updating to computers!
Roger Dawson: Modulars have a bad reputation in California. People think of them like mobile homes, which is unfair.
Mike Summey: Modulars are a different story. When they are put on permanent foundations, they are treated just like a stick built home. I’m planning to put some modular homes on property I own.
TT: Roger what is the difference?
Roger Dawson: Clair, I can barely figure out my Mac computer. Windows still baffles me.
Ralph Roberts: not in California
Mike Summey: Clair, its the age thing with Roger. He can’t help that.
simon: I saw a modular put up near my in laws in PA. Its a great looking home.
Clair-MO: LoL
MarkGinNC: TT- around here most do.
Mike Summey: TT, modulars can be put on full basements.
Roger Dawson: Modulars go onto a foundation and are permanent, just like stick built. But they are assembled in a factory and shipped to the site.
Clair-MO: Mike, I tell folks when they ask me how old I am that I am 22 years old with 37 years of experience!
Roger Dawson: Truth is, all new construction has modular elements these days. Roof trusses, for example, are almost always factory built.
Mike Summey: Roger, the specifications for modular construction are the same as for stick built home here.
[Investment Chat]: Warrior has entered (9:11 pm)
Mike Summey: Welcome back Warrior.
Roger Dawson: You have building specifications in North Carolina, Mike?
Mike Summey: We don’t want to get that discussion started tonight.
Clair-MO: Got to go now everyone! The Boss wants me to do something for her!!!
Clair-MO: I’ll get that email off to you mike
Roger Dawson: I have to run too. I’ve got family visiting. Best of luck, everyone.
Mike Summey: The Realtor I have used as a buyers agent for years has gone into the modular home construction. I am going to have him build several for me.
TT: whats his name?
Ralph Roberts: hmmm… that’s an interesting concept, Mike.
Mike Summey: Yeah, I guess we should wrap things up. Tonight has been a slow night but we have had some good dialog.
Ralph Roberts: good solid discussion
simon: Mike & Roger - I recently read your book. I think it is outstanding. Bought more as gifts to friends and family.
MarkGinNC: Thanks all, I thought it was great.
Mike Summey: Thanks simon.
Mike Summey: We’ll try to get the notice out earlier for the next chat.
simon: I had been looking for guidance like that.
simon: thanks, will get in earlier next time.
Warrior: Mike-I signed the guestbook. Is there anything else. Did I register ont he guestsign book?
Mike Summey: simaon, are you registered on the website?
simon: yes, mike
TT: Mike who is your buyers agent?
Ralph Roberts: Warrior, registering is seperate from the guestbook
Mike Summey: When you go to the home page, in the top right corner, there is a box and one of the options is “sign up” That’s where you need to register.
Ralph Roberts: on the main page, look down on the right for where to register
Warrior: Thanks!
Mike Summey: TT, Harry Giezentanner
TT: yep I know him
Mike Summey: His company is Property Associates
Mike Summey: Good guy and very knowledgable about how we investors think.
TT: thanks see you next time
Mike Summey: Well, goodnight all. Thanks for joining us and we’ll do it again soon.
Warrior: Mike, What if the NOI is even or $0?
Warrior: Waht are your limits using the NOI?
Ralph Roberts: The transcript of this chat will be posted in about five minutes.
Ralph Roberts: Looks like Mike is gone, Warrior… you might email him your question … mike@weekendmillionaire.com
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