chat Transcript June 12, 2006
Posted on June 13, 2006
Mike_Summey: Hi everyone
sermiex: Hi Mike
Mike_Summey: Hi dimasuris & ken
ken: Hey all
Mike_Summey: Hi Steve
dimasuris: Hello Mike and all
Mike_Summey: Pam should be along shortly
Steve_SC: Hi everyone
Mike_Summey: Hi Jeff
jeff.the.farmer: hi Mike
jeff.the.farmer: hi everyone
Mike_Summey: I’ve been dealing with lightening damage all day.
Steve_SC: Jim, are you following Carlton’s program?
jeff.the.farmer: my sister’s flight was delayed due to that storm
Mike_Summey: Jim, I see you purchased Carleton’s course. How did you like it?
Mike_Summey: Hi John
John_n_NEFL: Hi ya’ll
Jim: It motivated me to get started, and I’ve been able to purchase several properties “no money down.” Required some of my own money at the start, however.
jeff.the.farmer: Mike, if you see a house thats not for sale, but you want to know more information. Would you knock on neighbors door asking about it? Or just wait until you see a neigbor one day?
jeff.the.farmer: a house with overgrown grass.. ugly duckling type of house
Mike_Summey: No money down is always best if you can make the numbers work. You just have to be careful because you can buy a lot of properties with no money down that you can’t afford to own after the purchase.
Mike_Summey: Hi Pam
Mike_Summey: Hi tumbel
dimasuris: Hello Pamela. I have few questions if you don’t mind
Pamella_Diltz: Hi Mike and Everyone
ken: Does anyone use bandit signs? If so were do you hang the sign telephone pole or stacks in the ground
Jim: Absolutely - essential to crunch numbers very carefully to make sure it will work.
Mike_Summey: jeff, I would do whatever it took to find out who owned it and what the circumstances were.
jeff.the.farmer: It seems with the formula you set up in the book, combined with owner financing… it seems no money down that way is very safe
Pamella_Diltz: Dimasuris - I am ready!
Mike_Summey: ken, Asheville just outlawed those type signs and placed a $50 per day fine on using them…that’s per sign.
jeff.the.farmer: with the exception of neighbors, where can i find information for a house?
ken: Mike thats what i thought would happen
Mike_Summey: Pam is here, so take advantage of her. She really knows her stuff!
Steve_SC: Mike, I haven’t been here in a while. I just wanted to tell you I grew my portfolio after reading your first book. I started getting brave and investing in flippers. I must say - I like rentals much better. Your methods and philosophies work great.
Mike_Summey: jeff, the courthouse is a good place.
jeff.the.farmer: thanks for the tip Mike, i’ll keep that in mind
Mike_Summey: Thanks Steve. Where in SC are you!
Steve_SC: Florence
ken: The court house near me can give me a cd of parcels in my county, they are not on the internet yet
Jim: Pam, how about some creative suggestions for keeping good tenants!
jeff.the.farmer: Pam and Mike, do you find properties that are out of way, but have nice views or property good rentals?
Mike_Summey: Steve, just FYI, I’ll be doing a seminar in Greenville August 26th
Mike_Summey: Hi Corey
jeff.the.farmer: they are about 20-30 mins away from most of the major stores, malls, etc
Steve_SC: Mike, will that info be posted on the website?
Pamella_Diltz: Screening, Screening to get the good ones. Good maintenance and rapor with them
Corey: Hi Mike at work and had to sneek in the office to chat with you guys
Mike_Summey: Steve, yes it will as soon as I know the details. Exact location & times, etc.
dimasuris: What is property manager compensation is based on> Performance?By keeping low vacancy bringing good tenants and increasing owner’s annual NOI in this case the copensation is highier % or is it the same whether performance is good or average?
shoe_kc: Pam, if the majority of houses in a neighborhood/subdivision are rentals (to the tune of 70%), does that make it a good area to look for potential rental houses?
Steve_SC: thanks, Mike
Pamella_Diltz: Jeff - Yes they just require more drive bys
Mike_Summey: Hi reggie
Pamella_Diltz: Compensation is based on receiving the rent
reggiedunbarii: hello mike
dimasuris: Can the compensation be negotiated with the property mgmt company?
Homes_for_Families: Pam what is the most desireable single family home (size and floor plan,etc.)
jeff.the.farmer: thanks for the advice Pamella!
Pamella_Diltz: I would
Corey: Pam what credit score do you not accept tennants below
Mike_Summey: Hi Eddie
Mike_Summey: Hi jacepharm
jacepharm: Hello Mike, hello all
Pamella_Diltz: Di- in most cases
Steve_SC: Pam, what do you have to say for someone who can’t bear to relinquish control? I have 21 units and manage them myself. (I know, Mike, I should spend that time looking for other properties. I do that too).
Mike_Summey: Hi Hottie
Pamella_Diltz: Hff- 3/ with med yard A/c gar
hottiekindhart: Hey Mike
jacepharm: Mike, cant stop reading Mathew Martinez new book. It mirrors so much of what we have been learning as a weekend millionaire investor
Mike_Summey: Steve, you must be a glutten for punishment.
jeff.the.farmer: Mike, what are some advantages of owner financing that I can tell sellers? Like tax reasons, etc?
Pamella_Diltz: Corey - I look at the overall - I do not depend on scores
jacepharm: Hello Pam glad your hear today
Mike_Summey: jacepharm, that’s why I invited him to be our guest last week.
Mike_Summey: Hi Theo
Pamella_Diltz: j
Theo_SC: hi Mike & fellow investors
tumbel: Pam - At what point in my accumulation of properties does it make sense to get a property manager? Is it relative to the number of units or a cash flow issue?
Pamella_Diltz: -Thank you
Corey: Mike I have read where some investors keep selling their properties when they get so much equity and moving into larger and larger apartment buildings what is the benefit of this over just holding them and paying them off like you do
jacepharm: Mike, sorry I couldnt attend but I did read the transcript
Steve_SC: Mike, evidently so. I must say it has been surprisingly easy thus far. THat’s why I can’t stand to give someone else a cut for doing what I can do myself.
dimasuris: What questions should one ask a property mgmt co before deciding to hire one? How to determine if mgmt company is good and will take good care of your property?
Theo_SC: hi Pam…welcome
Steve_SC: Theo, where in SC?
jacepharm: Pam, I have about 15 units and have a property manager that charges about $450 for the first 35 units. Is that on par with the industry average from your experience
Theo_SC: Greenville, SC
Mike_Summey: jeff, the best owner financing comes from ones who are looking to convert equity into an income stream. For them, a very low or 0% interest rate can be attractive because they don’t have to worry about interest rates dropping a couple of points and having you refinance the property and dump all the money in their lap at one time.
Mike_Summey: Corey, you can achieve the same results by refinancing and pulling out equity to put in other purchases and not lose the properties you already have.
Theo_SC: Pam…do u turn everything to the PM Co. if they are charging 10%?
Pamella_Diltz: I base my fees strictly on the rent are you geting 4500 per month income?
Corey: pam when you look at the overall on the tenants what positive and negative things affect your response
shoe_kc: Pam/Mike, if the majority of houses in a neighborhood/subdivision are rentals (to the tune of 70%), does that make it a good target area to look for potential rental houses?
Mike_Summey: Steve, I know an attorney who was doing the same as you until he attended one of my seminars. After that he got professional management and today he will tell you it was the best thing he ever did.
Pamella_Diltz: Theo - not necessarily you could do some
jacepharm: Pam, they base their fees on the amount of units. Thy have a flat fee of $450 per month for the first 35 units they manage for you
Steve_SC: Mike, maybe I need to make that trip to Greenville in August!
Pamella_Diltz: Kc - I would look elsewhere
Theo_SC: Pam…I would like to continue to screen the tenants, is this a good idea?
jacepharm: Steve whats going on in August? Miek seminar?
Theo_SC: I am currently interviewing a local PM Co. in area
Pamella_Diltz: jac - I would look at the % of $ it is costing you to have them.
Steve_SC: Yes, Mike has a seminar
Mike_Summey: jacepharm, I’ll be doing a seminar in Greenville on August 26th.
Steve_SC: Pam, do you run credit checks or just check references?
jacepharm: Mike, Where can I sign up?
Pamella_Diltz: Theo - if you can cover credit, criminal, references, and employment
jeff.the.farmer: Mike, having any seminars around northern NJ or nyc?
Theo_SC: ok, thx
Mike_Summey: Jeff, not at this time.
Pamella_Diltz: Steve - criminal, credit, ref and empl
Theo_SC: I would like to stay in charge rent increases
Steve_SC: Pam, what if their credit it terrible but everything else is okay. That’s why the applicant is renting not buying.
jeff.the.farmer: Mike, do you have a limit on how far you’ll go out for a property from the main area/city?
Homes_for_Families: Pam do you try to get the property rent ready before you show it, or wait until you have a signed lease?
Mike_Summey: theo, why couldn’t you stay in charge of your rents even if you use a manager. Just tell them what you want them to do.
Mike_Summey: Ho pgarvey
Pamella_Diltz: Steve - I would watch that. Bad credit does not = a good tenant
pgarvey: Hi Mike, hi all
Steve_SC: Pam, I understand. How much do you use “gut”?
ken: I agree pam my best tenant just had a floreclosure
Mike_Summey: Hi Eric
Corey: Pam what are some of the things you see that are major negatives to you
Pamella_Diltz: HFF - I want the property ready before I shoe it
jeff.the.farmer: Pamella, what do you mean by hff?
Corey: Pam i was referring to the tenants application
Homes_for_Families: HFF is me
Pamella_Diltz: Steve - Sometimes, however being a Realtor I have to be able back up my decision and apply it fairly
Theo_SC: Mike…when I talked to them last week, I realized that a lot of the rates were low. They are renting a house next to one I own & they are asking $575 & I rent my for $670
jeff.the.farmer: ohh, haha, didnt catch that one
ken: Pam i’m dealing with the biggest managment co. in my area but my one unit is vacant for 2 months I use to have a for rent sign in front and i got about 20 names that i forwarded to the managment company and they have never filled it yet. what sould i do find another management co. I was trying them this one time to see how it goes.
Mike_Summey: HFF, that’s why I tell everyone to use a short easy to type name in the chat. It makes it easier for us to respond with minimal typing.
Pamella_Diltz: Corey - Collections when the unexpected comes up for pay day to pay day renters.
Steve_SC: Mike, are you still seeing a lot of novice “investors” jumping on the band wagon? I see a lot of it in my area still. I just sit back, wait for the right deals, and let them stumble.
kevindav: Hi everyone.
Mike_Summey: Theo, are there other factors, A/C, basement, larger, etc.?
Mike_Summey: Hi Kevin
hottiekindhart: Mike, do you own a lot of mobile home?
Theo_SC: don’t know all the details
Pamella_Diltz: Ken - I would ask them why. Has it been shown , what was the prospects reason for not leasing?
EricT: Hey Mike .. Sorry for the late response.. I stepped away for a second
Mike_Summey: Steve, there have always been a lot of novice investors. That will not change. the ones who take time to learn the business and make informed decisions will last, the other will not.
Theo_SC: I didn’t get a strong feeling with getting the highest rate possible
jeff.the.farmer: Mike, when it comes to paying some closing costs, inspections, etc. I know that you factor it into the NOI to pay over time. But does the money for that come out of pocket or do you just ask for a little more money when it comes to getting a loan from the bank?
Mike_Summey: Hottie, I own a mobile home part, but not the mobile homes.
ken: Pam They told me that area is slow moving I’m really thinking of calling to ask to break the contract and find somone that i can train for my rentals
pgarvey: Hi Pam, what is the most effective way to get the rents on time from tenants?
Mike_Summey: Pam will tell you…I ask her when something stays unrented for too long!
Steve_SC: Mike, that’s what I meant. “Novice” didn’t sound right because most of us are novices. I meant the people who are buying real estate for the glam of it and not for the smart investment.
Pamella_Diltz: Ken - where are you?
hottiekindhart: Mike, I heard that there can be insurance issues when it comes to
ken: Johnstown PA
Mike_Summey: hottie, I do not like to own mobile homes and yes they are more difficult to insure.
Pamella_Diltz: Pgarvey - do not allow the first time to occur. I send a notice on the 5th and a 10-day to vcate on the 10th
Mike_Summey: Steve, the novices to which you refer are the ones who make the #1 mistake I list for new investors…being impatient.
Mike_Summey: Hi Penny
Penny: Hi Mike
Theo_SC: Pam…do u have recommendation for finding good PM Co. in G’ville, SC…any national web sites to look at?
Theo_SC: hi Penny
kevindav: Pam, the going rate in Dallas seems to be 1 month rent to find the tenant, then 10% od receipts after that. With this expense I can’t make the NOI reasonable. Any feedback?
Steve_SC: I agree, Mike. I think experience, knowledge, and stamina sure that. The longer you do this, the more you hunger for better deals.
Penny: hi Theo & everyone.
Steve_SC: cure
Theo_SC: Steve_SC where r u in SC?
Pamella_Diltz: Theo - I would ask for references. I have prospective owners ask me. Also Realtors who sell only and have had good feed back from their investors
Steve_SC: Theo, Florence
Mike_Summey: pgarvey, the best way to collect rents on time is to file eviction papers the first time they are late. After that they will know that you won’t tolerate late payment so if they need to ride someone, it better not be their landlord.
pgarvey: Pam, is there a national site or company that you can use to check criminal or evictions?
Theo_SC: Steve_SC, I am looking @ some duplexes in your area
shoe_kc: is it reasonable to expect the ability to call up your prop mgr w/ an address/description of potential house and have them return estimated rent?
Pamella_Diltz: Kev - in our area that seem high. WE do not have a leasing fee plus mgt%. However I know that some companies here are going to that.
Theo_SC: we need to network
Mike_Summey: kevin, property management firms will charge all they can get away with. Be fair, but be firm. If they overcharge they will lose your business or never get it. If they are fair & help you make a profit you will be inclined to give them more business.
Steve_SC: Theo, that sounds good to me. Are the duplexes new?
Pamella_Diltz: Pagrvey - I use Clearscreening out of California
Theo_SC: Pam…would you go with an individual or a company?
pgarvey: Mike, do you include attorney fees and court fees to be paid by tenants in your leases?
Mike_Summey: Hi jimie
Mike_Summey: pgarvey, that’s aquestion for Pam. She handles the leases.
Pamella_Diltz: Shoe - reasonable but I prefer to go on site prior to the purchase
Steve_SC: Theo, I ask because their is a builder in town who keeps building them and saturating the market here
shoe_kc: thanks pam
pgarvey: Pam, does Clearscreening out of CA national? do they have a web site?
Pamella_Diltz: Ken - the one that gives the best service
Corey: mike this may be an impossible question but if someone had great credit and cash roughly how many homes would be a reasonable goal for them to attain in their first year. Can you give an approx. number 2 or 40
Mike_Summey: Pam, I advise new investors to work with a property manager in determining proposed rents. As you kow, even with as many as I have, I still call you and my other managers for your estimate of rent on a new purchase.
Theo_SC: Steve…I just submitted a letter of intent this week end. I believe it’s on Howard St. Do u know the area?
shoe_kc: I haven’t purchased a house yet…and am having trouble finding time to “interview” prop mgrs so far…I’ve done light research in the paper of comparable prop’s I’m looking at, but am not confident enough w/ my comparisons to use the #’s in calculation of noi.
Theo_SC: 10 units
hottiekindhart: pgarvey, i have used www.youcheckcredit.com. i like it, does credit and criminal checks, county, city and nationwide
Pamella_Diltz: Pgarvey - the court paper give court costs. The NC lease allows for reasonable legal fees. I do Small Claims myself
hottiekindhart: pgarvey, it also makes recommedations for tenants with bad credit and will create letters of decline for you
Steve_SC: Theo, I know the area. Is that Section 8 housing?
Pamella_Diltz: I will need to get Clearscreening info tomorrow emailme at Bayshoreco@aol.com
shoe_kc: would prop mgrs come out w/ me to look at houses to determine rent rates? even though I don’t have a “track record”?
Theo_SC: Pam…u must have a good system, do u have other PM working for u?
Mike_Summey: Corey, I wouldn’t let the amount of cash or quality of credit determine how may to buy, I’d let experience set the number. the ability to purchase and the ability to operate rental properties are not necessiarily the same.
pgarvey: thanks, hottie
Theo_SC: Steve…I believe it is
hottiekindhart: pgarvey, let me know if you use it and what you think next time
jeff.the.farmer: Mike, when it comes to closing costs, inspections, etc. Do you usually pay for these out of pocket or do you get extra cash on the loan to cover it?
pgarvey: Pam, do they check for evictions also?
Mike_Summey: shoe, do you have our Offer Generator computer program?
shoe_kc: mike, yes…but rent seems to be a crucial part of that that I want to be an accurate #
Pamella_Diltz: Shoe - I would!
Steve_SC: Theo, feel free to email and we’ll network. steve@carolinapropertiesllc.com. I come across deals in Greenville a lot so I’ll pass them along. I prefer to stay in my area.
jeff.the.farmer: shoe, i still have yet to buy a house. But I have had a property management company look at rentals for me
shoe_kc: Pam, wish you were here!
shoe_kc: jeff, that’s good to hear.
Mike_Summey: jeff, I usually pay for these out of pocket.
Mike_Summey: Hi noel
shoe_kc: a friend/mentor uses Apex for his north KC houses, and gave me som contact info…so hopefully I can call them this week.
noeljackson: Hello everyone
Pamella_Diltz: I have a staff of 3 fulltime including bookkeeeper
jeff.the.farmer: just ask shoe, and they probably will. I was little scared at first, but you’ll get over it
Corey: mike the reason for my question was that my wife and i disagree strongly on this point as hottie thinks you could only find 1 to 2 deals a year while i believe you can find many more than this what is your opinion
Theo_SC: Mike…you will be happy to know I got 2 responses from offers I sent 3 weeks ago using the offer generator, I’ll be calling them after the chat, I did not want to miss talking with Pam.
Mike_Summey: shoe, it’s like a baby learning to walk…the first steps are a bit shakey, but as you proctice and get better you will feel more comfortable.
shoe_kc: thanks jeff…hopefully I’ll get over it
Steve_SC: I have to check out early. Have a good night everybody. Thanks Mike and Pam.
shoe_kc: bye steve
Pamella_Diltz: Pgarvey - we check evictions thru coourt house
Pamella_Diltz: Goodbye Steve
shoe_kc: did anyone catch this on abcnews today? http://abcnews.go.com/Video/playerIndex?id=2066193
Mike_Summey: Corey, I’d listen to her to a degree. As you both get more experience, you comfort level will grow and you will not have discussions about how many to buy. You’ll eventually find that you are able and willing to buy more than you can find.
shoe_kc: looked interesting
Theo_SC: Pam…have u thought about expanding your business into Greenville, SC. u r not that far from G’ville 
pgarvey: Hottie, will do
Mike_Summey: Theo, the program is a real lifesaver for new investors, isn’t it?
jeff.the.farmer: Mike, I need your opinion. There a few houses that I can buy with 15yr loans, but there are some more nicer looking properties that I cant buy unless I go with 20 yr loans. I am afraid I may be rushing to buy properties by going with 20 yr loans, instead of being patient and finding houses that work with 15yr loans
Theo_SC: yes, yes, YES!!!!!!!!!!!!
Mike_Summey: Theo, leave Pam alone. She has all she can handle here!
shoe_kc: mike, yeah, still learning to walk…been studying/learning hard last 3 mo’s…now getting into looking at houses and making offers…getting nervous.
Pamella_Diltz: Theo - we are always open for offers However I do not feel that i could properly manage your units from here unless I had a cohart in GSC
Theo_SC: I was just getting to ask u if u would share her….LOL
Mike_Summey: shoe, I was scared to death at my first closing.
Theo_SC: Mike…u told me to ask all my burning questions…LOL
shoe_kc: the thing that’s been “spooking” me lately is a few houses that have had “for rent” signs out for quite a while…
pgarvey: Pam, what is the largest property you currently manage in terms of unit size?
shoe_kc: these houses are in my target neighborhoods
Mike_Summey: shoe, don’t be afraid to ask why they haven’t rented. Is it the area or are they asking too much rent? One you can fix the other you can’t.
Theo_SC: Pam…I figure since u have been in the business so long, u might know some folks down this way
jeff.the.farmer: ive seen houses like that here shoe, but they weren’t that great. When I talked to my property manager. Her vacancy factors were very, very low
Pamella_Diltz: Pgarvey - I have a 3500sf cond/ in # if units - 40
dimasuris: I have to go. Goodbye Mike, Pam and everyone else. Thanks for a great chat.
hottiekindhart: Mike, do you think it’s a bad thing to ask to much rent and lower your price after a month or so?
shoe_kc: I don’t think it’d be the ‘hood…and the houses seemed nice…so I’m hoping it’s the “too much”
jeff.the.farmer: so they could just be bad rental home, but doesnt show on the outside
Theo_SC: see u next week
Mike_Summey: Goodnight dimasuris
shoe_kc: guess I can get off my butt and call the #’s.
jeff.the.farmer: ive seen pretty houses on the outside, but inside… different story
Mike_Summey: hottie, ask Pam that question. Since I don’t get involved in the day to day rentals, I can’t give you a good answer.
shoe_kc: should I find the prop mgr I plan on using before trying to get them to come out to houses…or get them to come out to houses first…then decide which one?
Mike_Summey: shoe, just remember…MAN SIT A TABLE WITH MOUTH OPEN FOR VERY LONG TIME WAITING FOR ROAST DUCK TO FLY IN!
Theo_SC: Mike…u have to let Roger know I save $400 today in Attorney fee & on a paint job by flinching…LOL
jeff.the.farmer: Pam, how much do you usually raise rents by and is there a certain time that’s best for raising rents?
Theo_SC: LOL
shoe_kc: right on
Pamella_Diltz: Hottie - prospects may become weary if they se a house sit too long. I think it is better to ask a fair market value up front and get the $ rolling in!
Mike_Summey: Theo, that’s great. Let him know that the next chat he is in. He will be gone for the next 3-4 weeks. He is speaking in Nigeria and Londaon.
hottiekindhart: Pam, thanks.
shoe_kc: haha…I tried the flinching thing on a state trooper…when he said my license plate was expired…didn.t work.
Theo_SC: I wonder if this work else where
Theo_SC: doesn’t the police…I tried…LOL
Pamella_Diltz: Jeff - I try to give a nominal increase 3-5% yearly at the lease renewal. Enough to keep you current with the market but not to make it worth the tenant effort to move
hottiekindhart: I just learned about the flinching thing and can’t wait to try it out
pgarvey: Pam, why did you choose to be a property manager? when do you take vacations 
Mike_Summey: Everyone, I firmly believe that using professional management will make you more that it will cost you. Your time is better used finding deals than fixing toilets and repairing leaks.
hottiekindhart: I totally agree with Mike, i just have to find a good one
Theo_SC: It’s great…always say “is that the best u can do” & wait
Mike_Summey: shoe, flinching doesn’t work with someone who has nothing to gain.
Mike_Summey: pgarvey, she takes them all the time!!!!
hottiekindhart: I got a really nice discount on a nice watch by “is that the best you can do” line
pgarvey: Mike, how do you know when a porperty manager overcharging on repairs?
Pamella_Diltz: Pgarvey - I really enjoy my work most of the time. However, I now have 3 grans so I will be vacationing more.Cell phone are great!
Mike_Summey: pgarvey, property managers are like most other people, they do what you inspect, not what you expect!
shoe_kc: should I find the prop mgr I plan on using before trying to get them to come out to houses…or get them to come out to houses first…then decide which one?
Pamella_Diltz: Mike - we will talk tomorrow!!!!!!
Mike_Summey: Hi DC
Theo_SC: thx Pam
dc: hello
Theo_SC: hi dc
dc: been meaning to talk with everyone
dc: are you guys all investors?
jeff.the.farmer: Mike, do you think I should stick with 15yr payments or maybe stretch to 20yr loans? I think I may be trying to rush myself to buy a property. A few more nicer properties become available to me when I do 20yrs.
Corey: Mike I think pam just raised her fee on ya
Pamella_Diltz: Shoe- I would get them on site and let them talk
Mike_Summey: shoe, I would recommend that you interview several managers, find the one you want to work with and them assure taht one he/she will get your business when you buy.
Mike_Summey: dc, we have all levels of investors in the chats. Everything from novices to old time investors.
shoe_kc: ok…just wanna do what’s normal in the biz…not look like a fool and make prop mgrs mad, or waste their time.
shoe_kc: will prop mgrs take care of raising rent every year, or is that something we have to instruct them to do?
hottiekindhart: MIke, I think the best advice I have used from one of your books, is using the investor co. as the bad guy. i love that they take all the slack.
Mike_Summey: jeff, that is a personal preference. If you are in your 20s, 30 yr financing looks better than it does in your 50s.
jeff.the.farmer: make sure you ask of they do single family homes. Alot of managers here don’t do single fammily homes
Pamella_Diltz: Shoe - a good manager looks after the clients best interest. In turn it is in his or her best interest in returns!
jeff.the.farmer: you can weed out alot of property managers that way
dc: Mike - i’m about to purchase my first investments (2 homes) but it’s in a city that’s known for high crime.. like 7th in the nation.. but it’s got so much potential and a lot of developments
Homes_for_Families: thank for a nice chat tonight.
shoe_kc: also, sounds like it’s customary for a % of the first month’s rent to go to the prop mgr as a “finders fee” of sorts…do we need to figure this into noi, or just consider it to come from cash reserves?
Mike_Summey: Hottie, it is easier for a property manager to be the bad guy, especially in difficult situations because they can always say, “I’m only doing what the owner requires.”
Pamella_Diltz: Shoe - we normally do an increase upon renewal However I always welcome in put from my owners - excepy Mike
shoe_kc: jeff, thanks…good to know
pgarvey: Pam, who many more units are you capable fo managing? do you have a limit?
Theo_SC: Do your PM use their people for all the repairs?
pgarvey: how
hottiekindhart: MIke, I love that idea. I want to use it on our next investment prop.
Theo_SC: small or large?
Mike_Summey: shoe, I don’t pay a finders fee. That part of what the manager gets paid each month for. finding a tenant is part of management. The best incentive is that fact that the manager only gets paid when there is a tenant.
jeff.the.farmer: unfortunately my manager does that, maybe when I get a few more properties I can negotiate with them.
Pamella_Diltz: pgarvey - I will take on more as long as I can acquire the staff to adequately do a good job. I am almost to the point of adding another staff person now.
Pamella_Diltz: Theo - I use independents - they are great!
Mike_Summey: Hottie, one of the reasons I use managers is because they can do things I can’t or won’t do. When tenants are dealing directly with the owners they tend to try to shift their problems onto the landlord. they can’t do that with managers.
pgarvey: Mike, in CT most of the property managers charge 1 month rent to fill a vacancy.
Pamella_Diltz: dc - please
ken: Pam what is the radias in miles you manage properties in?
shoe_kc: I’ll just throw this out there too, imo, the best reason to have a prop mgr is they’re up to date on eviction laws…and they do the dirty work. I would personally have a hard time kicking people out…
hottiekindhart: Mike, I had to decline a potential tenant because of bad credit and payment history. i loved that the “investors” didn’t approve her. she was calling me everyday until the “investors” denied her. nothing I could do..
hottiekindhart: dc, yes?
Pamella_Diltz: Ken -40 miles
Corey: Mike Hottie and I have an 18 year old that is majoring in banking and finance with an emphasis in real estate. Should he be trying to buy property now as he is going through college
Mike_Summey: Hottie, if tenant come to the owners with excuses for not paying on time. Things like I was sick and out of work, or my child was sick, or I lost my job, it plays on owners sympathy to let them get by with not paying & getting further & further behind in their rent. All that does is shift their problem to the landlord. I din’t go into this business to do social work. That may sound hard hearted, but that’s what you have to be if you want to stay in business.
Theo_SC: Thanks Mike/Pam & all for this week chat. I have to go. See u all next week
dc: hottie and pamella or Mike - would you guys buy property in a crime ridden area which is growing?
hottiekindhart: dc, I wouldn’t buy property in that i wouldn’t visit after dark. If I don’t feel safe, I don’t buy
dc: this quest is for anyone
Mike_Summey: corey, he is probably better off concentrating on his studies. He has his whole life ahead of him to acquire properties.
Mike_Summey: dc, only if I could buy the whole area and kick all of the problem tenants out. I did this once. I bought 2 city blocks…43 units…and kicked everyone out.
dc: hottie- the city is washington dc…
Mike_Summey: Goodnight Theo. Thanks for joining us.
dc: Mike- hhahahahahah seriously? 43 blocks?
dc: units
Pamella_Diltz: Dc - i do not send my workers where I would not go.
Mike_Summey: Hi Scott
Mike_Summey: cd, that’s correct!
Mike_Summey: Hi Mark
shoe_kc: 43 units…2 blocks
pgarvey: MIke, were the rent on the 43 units too low?
MarkNC: Hi am I too late?
hottiekindhart: dc, been there and heard about it. I’ve driven through there with my husband on a motorcycle. honestly, just me personally, I wouldn’t do it.
dc: Mike - what’s bread and butter then.. where’d you suggest
jeff.the.farmer: How did 2 blocks of property end up for sale?
Mike_Summey: pgarvey, the units were bringing in about $6000 per month when I bought them. Today they bring in around $30,000
dc: hottie - it’s in anascostia where the nationals baseball stadium is going up
Mike_Summey: jeff, it was all one owner.
dc: hmmmm
Pamella_Diltz: pgarvey - Mike did a good job of rehabing them also
pgarvey: Mike, what did you do to the property? did you totally renovated?
jeff.the.farmer: that must of been a nice oppportunity, word of mouth?
Mike_Summey: pgarvey & dc, I spent about $1,500,000 on rehab.
dc: 1.5M? that’s ridiculous
Scott_Dallas: Hi Mike - sorry connection issues
Mike_Summey: jeff, it was an area infested with drug dealers, prostitutes & other vermin.
Mike_Summey: Scott, where ya been?
dc: i don’t have that sort of cash.. got a 750K but never thought about touching it
Scott_Dallas: You remember? Been a while! Saving my pennies. Traveling.
ken: Mike i think i know were the twin brother of that area is. its across the tracks from my rentals
pgarvey: Mike, that seemed like a risky investment
dc: pgarvey - very risky
Mike_Summey: dc, I couldn’t have done that either when I was first starting. I have been in the business about 20 years when I did it.
hottiekindhart: Mike, I don’t think I have the cojones for that one
jeff.the.farmer: must feel nice rehabing the area and making the city a little bit nicer
jeff.the.farmer: id like to do something like that eventually, rebuilding bad areas of the town
Mike_Summey: hottie, be patient! Cojones come with experience and a number of properties that cash flow well.
Corey: mike everbody is seeing the risk all i saw was the reward
dc: mike- on a yearly basis, how many homes should i buy?
Mike_Summey: Corey, you have to balance the two, but you can’t do that unless you can see both.
dc: corey - i agree with Mike.. rewards are great only once you’ve done your research
hottiekindhart: MIke, Corey and I are married, you would make a good referee
pgarvey: Pam, do you provide monthly, quarterly and anual reports to clients?
Mike_Summey: dc, if you’re just starting, why not have a goal to buy just one the first year. Then maybe 2 the second, 4 the third, etc.
Corey: Mike do you still get a little nervous on big deals?
Mike_Summey: hottie, marriage counseling is not my strong suit.
Pamella_Diltz: pgarvey - I sen monthly reports - the 15-20 of the current month
jeff.the.farmer: Pam is there any time when you would not raise rents? or you always do by a small %?
dc: mike - sounds like a great plan. In the end how many should i own after 10 years…. did you have a goal?
Mike_Summey: Corey, that depends. One house is a big deal to someone getting started. Right now I’m working on a deal that will be $25 - $30 million if I can put it together. Yeah, I guess I’m a bit nervous about it.
hottiekindhart: Mike, Corey has the forsight to see potential, I have the patience. We work great together, but it’s nice to hear a voice of experience
jeff.the.farmer: Mike do you see yourself going after the bigger investments now, or do you still go for single family homes?
Mike_Summey: pgarvey, except for mine! I’m luck to get it by the 1st week of the next month!
Pamella_Diltz: Jeff - if the market were to turn down or possibly the area became less desirable - industry or too many roosters!
shoe_kc: dc, be careful in buying for the sake of buying…set goals at a level prior to buying…like “make 10 offers per month based on noi”
shoe_kc: i’d guess in some years you’ll buy 1 or 2…and some years could be 10 or 20
Mike_Summey: jeff, I just bought 2 single families the end of March & gave them to Pam to manage.
jeff.the.farmer: so single families are still a bulk of your portfolio and income?
dc: shoe - how many do you own (got lot’s of questions)
shoe_kc: haha…I’m still in offering stage
dc: :))
shoe_kc: actually, my current goal is to find a prop mgr
Mike_Summey: Everyone, it’s well after 9:00 and Pam is going to need her beauty sleep. Let’s all thank her for being with us and extend an invitation for her to join again any time.
hottiekindhart: Shoe, how are you looking for a PM? I am looking, too
dc: shoe- isn’t that simple?.. i’ve chosen one of those big real estate companies.. Long and Foster
pgarvey: Mike, do you mostly buy SF for cash now or do you still do financing?
jeff.the.farmer: Thanks Pam for answering my questions you were a great help!
Corey: Pam thanks so much you have been a great help
hottiekindhart: Pam, thanks
Mike_Summey: Pam, feel free to stay and talk as long as you want, but don’t feel you under obligation to do so. I know you have other things to do also.
shoe_kc: I think the prop mgr is most important piece of puzzle…so I’m being quite cautious in this stage
shoe_kc: thanks pam!
Pamella_Diltz: Good night everyone! Mike has my # if I can offer assistance!
dc: thanks pam
shoe_kc: hottie, i’m asking friends that have rentals…gathering contact info right now…and hopefully find a block of time to have them come out and look at houses I’m considering.
Mike_Summey: pgarvey, I prefer to finance and let the tenants buy the properties for me, but if it takes cash to make an exceptional deal, I’ll do that too.
pgarvey: Thanks Pam for your great insights!
hottiekindhart: shoe, have you actually talked to any PM’s?
Mike_Summey: Pam, thanks for being with us tonight!
shoe_kc: hottie, not yet…hope to by end of week
shoe_kc: day job, and 2 night “jobs” are sucking up my time.
jeff.the.farmer: Mike, does most of your income now come from your single family homes you bought years ago?
dc: Mike- Who is Pam Diltz? and what properties do you go after
Mike_Summey: I’m going to have to go as well. It’s been a long day & I’m going to have to fly my mother to Tennessee tomorrow.
Corey: Mike I have a quite a few cars to have ready by tomorrow so I better get back to work or Hottie will scold me if i dont get home at a decent time tonight
hottiekindhart: Corey, yes I will
jeff.the.farmer: have a safe flight Mike
shoe_kc: thanks mike!
hottiekindhart: Mike, see ya next Monday
Mike_Summey: jeff, I’ve been buying for over 34 years and have never sold a property. Today about 70% of what I own is owned free & clear.
Mike_Summey: dc, Pam Diltz is one of the property managers I use.
Mike_Summey: Goodnight Corey & all.
Penny: goodnight all.
Corey: Goodnight
jeff.the.farmer: gnight Mike, take care everyone
dc: goodnight
pgarvey: goodnight Mike, goodnight all
noeljackson: good night everyone
tex: eddie u there
tex: we r to late
tex: r u an investor
scman: Well….I guess I will be reading tonight’s scipt next week
» Filed Under Chat Transcripts
Comments
Leave a Reply