Chat 11-22-04
Posted on November 22, 2004
Welcome to the chat, Ralph Roberts!
[Investment Chat]: Ralph Roberts has entered (7:53 pm)
Ralph Roberts: hi guys… won’t be long now
[Investment Chat]: djdto has entered (7:57 pm)
Ralph Roberts: welcome djdto
djdto: thanks. i’ll be reading the threads mostly. still finishing up my day job work.
Alan ~ Rochester, NY: Great! Didn’t realize I’d be the first one here.
Ralph Roberts: more should be showing up in the next couple minutes
Alan ~ Rochester, NY: Just Mike? Any guests?
Ralph Roberts: I don’t know, Mike sometimes surprises us
Ralph Roberts: but I did speak to him on the phone, he’s on the way
[Investment Chat]: Craig has entered (7:59 pm)
Ralph Roberts: hi Craig, welcome
[Investment Chat]: Mike Summey has entered (8:00 pm)
djdto: how many people usually show up?
Alan ~ Rochester, NY: cool; been reading old transcripts
Ralph Roberts: there he is!
Mike Summey: Hi everyone
Ralph Roberts: usually 10-20 or more, djdto
Ralph Roberts: it keeps growing
Mike Summey: What have I missed
Alan ~ Rochester, NY: Hey Mike! It’s been a long time!
Mike Summey: Its just now 8:00
Ralph Roberts: 8:01:42
[Investment Chat]: Robert has entered (8:01 pm)
Mike Summey: Hi Alan, glad you could join us.
[Investment Chat]: zert has entered (8:01 pm)
Mike Summey: Hi Robert
Mike Summey: Hi zert
Ralph Roberts: hi zert, Robert
Robert: Hi!
Alan ~ Rochester, NY: Been a few months
Mike Summey: We thought you were mad at us.
zert: Good Evening Mike and everyone
Craig: hi every
Alan ~ Rochester, NY: Rereading your book
Craig: hi everyone
Mike Summey: Craig, where are you from?
Mike Summey: And you too robert
Craig: Canada
Robert: I am from Jacksonville, FL
djdto: I may as well tell you where I’m from too, Mike. djdto is from San Francisco.
Mike Summey: Wow, you guys are a long way apart
[Investment Chat]: Tez has entered (8:03 pm)
Ralph Roberts: hi Tez
Alan ~ Rochester, NY: Naw; working on building credit and my FICO. Got back into this because I am going on three trips next year and it will be difficult to finance. Want to flip one house to get working capital before doing your Keeper method
Mike Summey: What does djdto stand for?
Robert: That’s the great thing about the Internet….distance makes no difference 
Mike Summey: Hi Tez
Tez: Hi Everyone!
djdto: it’s just my handle that i use for chats, but it does stand for disc-jockey david thomas oro. i dj too.
Mike Summey: Alan, where are you going?
Craig: What’s on your mind tonight Mike?
Mike Summey: I’ll just refer to you as dj tonight. that’s easier to type
Robert: I will hopefully be closing on a 2/1 by the end of the month. Anybody have issues renting out a 2-bedroom after it’s rehabbed?
djdto: easy enough
Alan ~ Rochester, NY: Virginia, Denver, and On a cruise starting from Puerto Rico through Barbados, etc
Mike Summey: Robert they are good rentals
Mike Summey: I own several
[Investment Chat]: Penny has entered (8:05 pm)
Mike Summey: Hi Penny
Penny: Hi Mike!
Robert: I remember listening to Carleton’s audio and he said “stay away from 2 bedrooms”
Penny: Looks like you guys have started without me!
Tez: I did initially, until the rest of the neighborhood improved a bit then it became what some experts refer as a bread and butter property
[Investment Chat]: MarkCT has entered (8:06 pm)
Robert: But they all have their place in the market
Mike Summey: Alan, are the trips as important to you as a couple of properties could be?
Mike Summey: Hi Mark
[Investment Chat]: Coach Karl has entered (8:06 pm)
Mike Summey: Hi Coach
MarkCT: Hi Mike. Its Mark Nadelson I took up your offer to join the chat.
Tez: Hey, you guys. Do all of you have your real estate license? We’re trying to decide if it’s necessary
Coach Karl: Hi Mike
Robert: Mike, do you try to “attract” certain kinds of tenants…i.e. yuppy types, DINKS, senior citizens, etc.?
Ralph Roberts: hi Penney!
Mike Summey: Robert, what Carleton is talking about is that 3 BRs are better, not that 2 BRs are not good rentals.
Alan ~ Rochester, NY: One is lol; haven’t had a real vacation since 1992. Now that I can afford that luxury {to an extent}, I want to sow my wild oats.
Penny: Hi Ralph!
MarkCT: Hi Penny. It was nice meeting you in NY.
Penny: Hope you are well!
[Investment Chat]: Ralph Roberts has entered (8:08 pm)
Mike Summey: Mark has a great story to share with everyone. We emailed today and he is doing quite well already.
Alan ~ Rochester, NY: This will force me to find a property {eventually; I am patient}
[Investment Chat]: Craig has entered (8:08 pm)
Mike Summey: Hi craig
MarkCT: I’m really just starting out but its going well so far.
[Investment Chat]: jeff has entered (8:08 pm)
Mike Summey: Hi Jeff
Craig: thanks Mike……….glad to be back
Alan ~ Rochester, NY: Try to have one by May, but I want to buy right. Western NY can be difficult
[Investment Chat]: Ralph Roberts has entered (8:09 pm)
djdto: Try the San Francisco Bay Area, Alan.
Mike Summey: We’re beginning to get a crowd, & I’m by myself tonight so if I miss a question, just ask it again.
Mike Summey: Good point Penny
Craig: Don’t feel bad Alan….it’s also bad here in the part of CAnada where I live.
[Investment Chat]: Ralph Roberts has entered (8:10 pm)
Alan ~ Rochester, NY: Yikes! California is for VISITING lol
[Investment Chat]: Coach Karl has entered (8:10 pm)
[Investment Chat]: Coach Karl has entered (8:10 pm)
Mike Summey: Coach, you’re back. Sorry, but no time to go to a private chat now.
MarkCT: It doesn’t get much worse than Fairfield county CT. That’s why I’ve ventured out of town.
[Investment Chat]: Ralph Roberts has entered (8:11 pm)
[Investment Chat]: Ralph Roberts has entered (8:12 pm)
[Investment Chat]: Ralph Roberts has entered (8:14 pm)
zert: how so ??
Coach Karl: I am Joining this Chat from Carleton’s Personal Coaching offices. If there is any thing that I might help with, just let me know.
[Investment Chat]: Al Lee has entered (8:14 pm)
Alan ~ Rochester, NY: What about the connections and getting things move/approved faster?
Mike Summey: If you’re licensed, it subject you to potential lawsuits and disciplinary actions if people try to claim you have taken advantage of them.
Mike Summey: Hi Al
Tez: It’s part of that power negotiating, right? Better to let them think you don’t know too much
Penny: Thats great isn’t it Tez, that means less time we have to waste on studing for a license and more on looking for properties.
Al Lee: Hi, Mike. Hi, everyone
Mike Summey: I was wondering if you were going to join us.
Al Lee: Better late than never!
Mike Summey: You can take a little pressure off me as I’m by myself tonight
Alan ~ Rochester, NY: Big Al!
MarkCT: I must say Mike is true to his word when it comes to his belief that this a get rich slow scheme. When I told him I bought 4 properties this year he told me to hold off buying any more until I built up some cash reserves.
Coach Karl: You Bet,
Al Lee: I’ll do my best.
Tez: Your so right Penny! And it saves money too…
djdto: where di you buy properities, markct?
Coach Karl: I’ll just jump in
MarkCT: I have a couple in Buffalo NY and a couple in Orlando FL.
Mike Summey: Coach, just jump in anytime…don’t be bashful.
Coach Karl: you got it!
Mike Summey: Ralph, why are you in and out tonight…having problems?
[Investment Chat]: Ralph Roberts has entered (8:16 pm)
[Investment Chat]: Ralph Roberts has entered (8:17 pm)
Coach Karl: Tez, do a little market research in the new area.
Tez: MarkCT, Don’t you run into probs w/ your management company…you know, not following up like they should, vacancies, etc.?
Coach Karl: Is it buyer’s or seller’s market?
MarkCT: I did find a very nice deal in Orlando. Got into something on the ground floor and have already made over 100K in appreciation. Going to take out that equity and buy more (once I’ve build up my reserves).
[Investment Chat]: Ralph Roberts has entered (8:18 pm)
[Investment Chat]: Ralph Roberts has entered (8:18 pm)
MarkCT: Tez, It took me a long time to find the right management company. Lots of Emails, phone interviews, and calling references. There are a lot of duds out there.
Ralph Roberts: I’m really still here … just my connection bouncing
[Investment Chat]: Ralph Roberts has entered (8:19 pm)
[Investment Chat]: Ralph Roberts has entered (8:19 pm)
Coach Karl: Tez, Property Management is where you make money, or lose it! be selective, do your due dilligance!
Tez: I know what you mean MarkCT…you have to do a lot of follow up initially and periodically thereafter
MarkCT: As far as the question of Buffalo depreciating I’m not worried about that now. All I know is that the rent meets my NOI.
Mike Summey: My first property manager was the guy who evicted me when I still had to rent. I knew from that moment on that if I ever owned rental property I wanted him managing for me. He really looked after his owners.
Welcome to the chat, Ralph Roberts!
[Investment Chat]: Ralph Roberts has entered (8:26 pm)
Coach Karl: Craig, do you feel the sellers might want to “carry” for 48 hours?
Mike Summey: Craig, you have to just keep exploring until you find something that works. since all properties are different and all people are different, there conceivably could be as many different ways to buy property as there are combinations of property and people.
MarkCT: Alan. It may be weird but people want to make a quick buck and they get suckered in by the deals on Ebay.
Alan ~ Rochester, NY: What’s your Property Manager Company? They extent into my city?
Craig: no
zert: MarkCT - I grew up 20 mins from Buffalo
Coach Karl: craig, you can originate a note/mortgage, and sell to mortgage investors to cash the seller out.
Tez: MarkCT, that sound like the property manager from heaven. I did a fair amount of property management when I was in college so I know a bit about it but…
Coach Karl: Craig, the key is FINDING those FLEXIBLE sellers.
Mike Summey: Coach, that’s a good point. could you elaborate on it a little more for everyone’s benefit.
Tez: I also know it’s really hard to find the good ones..and in some communities down right impossible
Coach Karl: Dont try to put a square peg, into a round hole.
Craig: Karl,they are next to impossible to find here in Canada
MarkCT: zert. I’ve never been and I know I’m taking chance buying so far out but so far so good. Just keeping my fingers crossed.
Coach Karl: Sure mike.
Mike Summey: Craig, next to impossible is not impossible.
zert: like everywhere some good and bad neighborhoods
Craig: I was referring to mortgage investors
Alan ~ Rochester, NY: Use a chisel to knock off the edges! Creative thinking!
MarkCT: Tez. I lucked out with this manager but my due dilegence and preserverence paid off.
Mike Summey: The buyers broker that I use told me many years ago that it was impossible to get owner financing at 0% interest. That was many such transactions ago.
[Investment Chat]: Doug in CT has entered (8:29 pm)
Tez: Sound like it MarkCT….so, want to share some of those 20 questions?
Mike Summey: Hi Doug
Alan ~ Rochester, NY: Mark; who is the company? I’m sure they’ll appreciate the attention
MarkCT: For the lessons I’ve learned I will never consider buying in an area until I’ve established a relationship with a property manager first.
Doug in CT: Hello Mike.
Mike Summey: Doug, I think I’m coming to CT im May. Not finalized yet by right now thats the plan.
Tez: That’s a good one MarkCT!
Doug in CT: Sounds Great, we will look forward to it.
Alan ~ Rochester, NY: You meet SUZE Mike?
Mike Summey: No, I was too busy.
Coach Karl: Table funding is when we create a note with the sellers. We will create this note with the SOLE expectation to sell to a note investor. Someone like mike was describing. He invests in mortgages to get a higher yield than a CD.
Coach Karl: We will create a note to fit the investors level of comfort and desired return.
Alan ~ Rochester, NY: Oh, I want to meet the quadruple threat in person, RobKiyo, Suze, You, and Carleton
zert: Coach - what kind on interest rate do you usually see
Mike Summey: Coach, what you’re talking about is creating a note that you can discount enought to give the investor the return he wants, right?
Mike Summey: And get the money you need in the process.
Coach Karl: the rates are competitive. But based on the “Desired” return
Coach Karl: right now about 7-8.5%
Mike Summey: Has anyone purchased Carleton’s Real Estate Toolkit…the one I mentioned in my email?
Doug in CT: I got it.
Craig: I did Mike
MarkCT: I have it as well.
Mike Summey: How do you like the financial calculator in it?
Coach Karl: Mike that is correct.
Alan ~ Rochester, NY: Got a great site for your Real Estate Calculators.
Craig: it’s great
Mike Summey: I think it is very easy to use even if you don’t have a good math background.
Doug in CT: I liked it, it helped me see what you were talking about in the book as far as what was a good deal.
Coach Karl: The discount will creat the differene between the face rate and the desired return.
Robert: What do you all think about buying a property “subject to” and then renting those out? No credit checks, no banks needed…
Welcome to the chat, Ralph Roberts!
[Investment Chat]: Ralph Roberts has entered (8:36 pm)
MarkCT: Got to put the kids to bed. This was fun. I’ll be talking with you Mike.
Ralph Roberts: rough connection tonight
Coach Karl: Carleton’s tool kit can do these calculations.
Alan ~ Rochester, NY: Okay; I tried it with mine and it was impressive
Mike Summey: See you Mark, I hope to have something to send you in a few days.
zert: thanks for the info Mark
MarkCT: Looking forward to it.
Coach Karl: Alan, if you mean an amortization table, the tool kit does that.
Alan ~ Rochester, NY: Why is Carleton downsizing his properties?
[Investment Chat]: Kay has entered (8:38 pm)
MarkCT: Anytime zert. If you want my property management questionaire Email me at unixnttalk@yahoo.com and I’ll send it to you.
Alan ~ Rochester, NY: his estate
Mike Summey: I think the hurricanes downsized them for him.
Coach Karl: 3 in a month
Alan ~ Rochester, NY: lol…Mark you neverr answered either question I asked you
Mike Summey: The eyes of two of the storms passed over his home.
Alan ~ Rochester, NY: Insurance pay it off?
Mike Summey: Very little.
Mike Summey: He had a huge deductible.
Alan ~ Rochester, NY: really?? He lost money?
Mike Summey: but it was all he could get where he lives.
Alan ~ Rochester, NY: Miami?
Mike Summey: I think he said in the last chat that he lost 15 of 70 properties totall destroyed.
Mike Summey: Stuart
Craig: good thing he believes in diversifying
Mike Summey: Right
Alan ~ Rochester, NY: What you think of Wilmington NC Mike?
zert: Mike / Coach / Al - do you have any experience with Mobile Homes and holding the notes
Coach Karl: good point craig.
Mike Summey: Has anyone other than MarkCT purchased anything lately?
Doug in CT: I have a contract on a four plex in CT
Mike Summey: Wilmington is a good market, but also very prone to hurricanes.
Al Lee: zert: mobile homes are not like houses at all. They are like automobiles. the don;t appreciate like houses and the actually depreciate.
Mike Summey: Great Doug.
Coach Karl: Zert, I do not invest in Mobile homes, or MH paper.
Doug in CT: I got $195,000 of owner financing at 7.5%
Mike Summey: zert, I stay away from mobile homes for the very reasons Al is talking about.
Al Lee: zert: you will have a different type of tenatn in a mobile home, also. possibley more problems. Then, too, storms blow them away like matchbooks.
Coach Karl: However, there is a coach that has a portfolio of MH paper that is producing 36% yield.
[Investment Chat]: Kay has entered (8:44 pm)
Al Lee: Coach: I get 36% on my dollars invested in SFH and don;t have the risk
Kay: Hi Mike, I’m new to the chat, just figured out the “program”. Let me observe until I get up to speed! Thanks.
Mike Summey: Kay, you back?
Coach Karl: Money CAN be made in MH.
Coach Karl: Look to buy MH parks.
zert: thanks - definitely do not want additional problems
Mike Summey: Kay, the message panel is at the bottom of the chat window. Just type your message there and hit enter or the submit button.
Al Lee: I like moble home PARKS better than mobile homes–unlses you get the MH’s dirt cheap.
Kay: Got it! 
Coach Karl: AL, I agree!
zert: what about just holding the notes for the owner?
Mike Summey: I bought a MH park & I got two of the homes with it. When the first one went vacant, I hauled the home off and trashed it. Now I just rent the lot.
Coach Karl: Al,36% is great! Good Job.
Al Lee: Mike, you are really smart. You go for the money and leave the haeadaches to someone else.
Mike Summey: zert, my experience is that mobile home financing can be high risk and you may end up owning more of the homes than you want.
zert: due to the nature of the tenants?
Mike Summey: I like owning the parks.
Coach Karl: Zert, you may need to be PREPARED to own the home again.
Mike Summey: I’m looking at another one now.
Coach Karl: You can always sell the paper to an investor!
Alan ~ Rochester, NY: Good Night all. Football time; Monitor is about to blow up
Mike Summey: zert, most of the MH financing is for people who are going to live in them and a very high percentage of them are high risk credit.
Al Lee: Coach: I have found that stetements with ALWAYS or NEVER are RARELY true! lol
Coach Karl: watch out for the pre-game show alan.
[Investment Chat]: Kay has entered (8:50 pm)
Coach Karl: al, well said.
Alan ~ Rochester, NY: I can’t wait to get reindoctrinated into that porn! lol
Tez: Gotta go feed Tez. Thanks to all!
Coach Karl: lol
Al Lee: If you are holding a note on a MH, there is a good chance the collateral is insufficient to recover your investment if you need to sell. They are often way overpriced.
Mike Summey: I’ve found a way for the chats to end on time. Hold them on Monday night one hour before the football game. Ha!
Craig: lol
[Investment Chat]: Tez has entered (8:51 pm)
Coach Karl: Al, there is a safe ITV.
Alan ~ Rochester, NY: I can’t believe you actually had one before the Super Bowl! Now THAT’s dedication.
Penny: Thats true Mike, even for us women in the chat.
Coach Karl: INVESTMENT TO VALUE.
Mike Summey: I’m not a big fan of Pro football so I stay a while if everyone wants. If it were college ball that would be different.
Coach Karl: with MH, it is often 50% or less.
Penny: I’m saying goddnight also. Thanks everyone. It was great fun watching and learning.
Mike Summey: Goodnight Penny
Ralph Roberts: goodnite, Penny
Al Lee: Goodnight, Penny
Penny: Goodnight everyone!
Kay: Me too. I’ll catch y’ll at the beginning next time!
zert: Mike back to you question some time ago. I have a contract on a SFH 4/2. Will assume the existing balance and have the owner finance the difference
Mark in NC: So Karl you are saying that mobile home paper is worth only about 50% of the stated value of the home?
[Investment Chat]: Coach Karl has entered (8:53 pm)
Mike Summey: Speaking of mobile home parks, I own a building next to one where the owner owns all of the homes. 42 of them. The park was flooded in the recent storms and he is losing everything. No insurance! All of the homes have been condemed and the inspectors have found asbestos in most of them.
Al Lee: I used to have a relatinship with a lender and they weoul offer to sell me REO proeprties at below what they had in them. The mobile homes were not worth even the discounted prices.
Coach Karl: By the dirt,
Coach Karl: have the owner dispose of the “Homes”
Mike Summey: I’m thinking about it Coach, but I have to give him time to come to reality.
Mike Summey: It may well cost him more to get rid of the homes than the dirt is worth and he has been ordered to dispose of them.
Mark in NC: Where is the park Mike, I have a distant relative who owns some parks near Hendersonville
Coach Karl: a loss like that , it should not take long.
Mike Summey: Its near the river in Asheville
Mark in NC: Probably a different guy.
Mike Summey: Coach, I’m not sure he can pay to have the homes removed and he would have to pay me to take it with the homes in place.
Mike Summey: The asbestos removal is the problem.
Mike Summey: I’ve heard as much as $5000 per home.
Coach Karl: the homes sound like an Environmental hazard
Mike Summey: They are.
Mike Summey: Very old trailers.
Coach Karl: If he walks, and leaves the homes there. Will it effect the value of your property?
Mike Summey: Fortunately no, the town will force the property to be cleaned up even if they have to do it and put a lien against it for the cost.
Coach Karl: sounds like a fun project.
Mike Summey: Yuk!
Mike Summey: Anyone else have any burning questions or is it time to go watch football?
Coach Karl: right!
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