Chat Transcript March 19, 2007
Posted on March 20, 2007
Mike_Summey Looks like we have a few people raring to go tonight.
Mike_Summey What’s on everyone’s mind?
santosleigh mike, did you get my email today
Mike_Summey Hi Nan
Corey Mike what do you think of hard money lenders and then refinancing after you own the property
Mike_Summey leigh, yes I got it. The issues you discussed are the reason we recommend that you get title insurance on every purchase.
Mike_Summey Corey, I’ve never used hard money lenders, so I’m not a good one to ask about that.
eryk76 Mike, I have a non real estate question. Do you have a realitive named Josh Summey who races professional motocross?
MarkCT Seems I’m going through a bit of a bad stint in March. I was 100% occupied and then all of a sudden I get a tenant that skipped and one that needs to be evicted. Just got to ride it out for a while.
TAS Any suggestions on quality pre-foreclosure listing services?
Mike_Summey Mark, that’s why we recommend cash reserves. You have to be able to weather the storms in order to enjoy the clear sailing periods.
santosleigh mike,thank you and i always will.
Mike_Summey eryk76, no, I do not know him.
Mike_Summey Hi Billy
Mike_Summey Everyone, title insurance is cheap when compared with the problems that can pop up without a good title search.
MarkCT I agree and I’m glad I have some. It also helps to have some extra cash flow to buffer these times as well. Its a good argument to get some rentals free and clear to help cover down times.
Nan Green Mike, my husband and I are interested in buying a single family home near a college to rent to students. Any thoughts?
Nan Green Other than the obvious…?
Mike_Summey Hi Scott
Scott S Hello
eryk76 Do you recommend building cash reserves before you get started and if so what is a good reserve to start with?
Mike_Summey Nan, some people have done very well with college rentals and some haven’t. It’s like everything else…you have to do your homework. If you buy a house near a college and your son or daughter shares it with others, be sure to get good leases guaranteed by parents.
Mike_Summey Hi Roger & Bob
Nan Green Thanks, plus we have talked to a property manager today
Roger Dawson Hi Mike and everyone. Sorry I’m late. I had a problem logging in.
Bob (vegas) Greetings from Sin City
Mike_Summey erky, it is advisable to have a cash reserve of at least 3 months expenses when you start…more if possible.
Mike_Summey Hi Mark2007
Mike_Summey Roger, the problem wasn’t golf was it?
Roger Dawson With college leases be sure that it’s for the calendar year, not the school year, or get enough rents in nine months to carry you through the summer.
Mark2007 Hey Mike. My first time on-board. Met you at ACES. My wife is working on her login right now.
Nan Green OK thanks!
santosleigh mike, the bank in buffalo assesed my $50,000 house at $80,000 to give me a $37,000 loan, they too eager to lend me money, could it be my 816 credit score?
Roger Dawson No, Mike. My golf club is closed on Mondays but it will be a problem tomorrow.
Mike_Summey Mark2007, glad you could join us. We’re a friendly bunch, so just jump right in with any questions you may have.
santosleigh hello roger
Mike_Summey leigh, I’m not going to say I told you so. 
Mark2007 Mike, will do. Trying to help my wife over the phone.
Roger Dawson Yes, Santosleigh, that’s a great credit score and it makes a big difference.
MarkCT santosleigh I found the same thing happened when I went to refinance my Buffalo rentals. The local banks gave me a better deal then the national ones.
Roger Dawson Hi Penny
Bob (vegas) Mark do you have any rentals in Rochester?
Penny Hi Roger, Mike, and everyone.
Mike_Summey Mark & Leigh, there have been some unscrupulous people involved in buffalo real estate and it has made national news. That may be why the national banks are skittish.
Mike_Summey Hi Penny
Mike_Summey Hi Hottie
Hottie Hey Mike and Roger
Roger Dawson Hi Hottie
MarkCT No my only upstate New York rentals are in Buffalo. The cashflow in all the Upstate New York towns are about the same. I chose Buffalo because it is a city that is always in need of rentals and I found a great property manager that finds me good homes and good renters.
Mike_Summey Mark, I think there are quite a few good deals in Buffalo, but a few shisters can taint thing for everyone.
santosleigh mike, were these real estate companies or loners.
Corey Mike I met a guy today that just opened an office across from my house. He owns a 100 rentals and is also a wholesaler. He says he buys at least one house a day
Bob (vegas) I get these updates from cashflowandequity.com for rochester property that is all owner finance and “seem” like good deals
MarkCT Buffalo rentals are not good for appreciation but they provide great cash flow and help cushion times when I have vacancies for my other rentals.
Mike_Summey leigh, I think some were real estate people…or at least people purporting to be.
Mike_Summey Hi zert
Bob (vegas) Buffalo has the lowest price homes per capata
Roger Dawson Hi Zert and Mark
zert hi everyone
Nan Green I have a follow-up about the college rentals if I may, the Property Mgr we spoke with today asks 15% but really seems to know what she is doing, handles everything. According to your book it shd be 6-12%. She also can do “a la carte”.
Nan Green What do you think? The property is about 45 min. away from us.
Bob (vegas) 15% sounds high
Nan Green It did to us too.
Mike_Summey Mark2007, did you get your wife on yet. If not, she may be on a computer that does not have the latest version of JAVA, which is required to run the chat program. If that is the case, just have her go to www.java.com and downolad it. It is FREE.
MarkCT Mike I was lucky that I found a good property manager their that knows the area and finds me good properties. She is a member of housing court and is instrumental in trying to turn the neighborhoods around.
Mike_Summey Nan, 15% sound very high to me.
Mike_Summey Hi Pscherer
Bob (vegas) Mike that java “mess” is what has kept out of the room for the past 6 months
Nan Green We should negotiate, maybe get less?
Pscherer Hi Mike
MarkCT Bob that’s why if you know where to look great deals can be found. I bought one of my properties for $19K put $2K into it and rent it out for $520 a month.
Mark2007 Mike, she is changing computers and booting it up.
santosleigh mark ct, how many rentals do you have and are they all single family in buffalo
Mike_Summey Bob, Addon Chat supplies the chat program and they did an update that we had nothing to do with. It has caused problems for a number of people.
MarkCT I own 4 rentals in Buffalo. 3 are single family and one is a duplex.
TAS Has anyone had any success with pre-foreclosures or short sales?
Bob (vegas) my machine at home is a dinosaur……..with a tin can and string connection…
Mike_Summey Nan, personally, I wouldn’t pay more than 10%. Keep one thing in mind, property managers can find new tenants tomorrow, but owners are few and far between. You are in the drivers seat.
Nan Green That’s true!
Nan Green 
Mike_Summey TAS, I have bought many pre-forclosures. If you can find them just before they go to auction you can make some good deals. Banks do not want to foreclose.
Mark2007 TAS We’ve had a hard time getting deals on the courthouse steps. Thinking about going the route of “pre” foreclosure.
TAS Where do you typically find your listings, just though the courthouse, or through a service?
Mike_Summey Hi kawshilock
Bob (vegas) I have signs out
Mike_Summey Oops! Can’t type. kawhitlock
kawhitlock yeah….thanks!
Mark2007 TAS, my wife looks for the foreclosures in the paper. How do you find the pre stuff?
kawhitlock atleast you didn’t add a “t” to that
Mike_Summey Mark2007, I’ve never had much luck on courthouse steps either.
santosleigh mark ct, I am working on my second property, and hope to have 4 by the end of the year, i bought my first on jan.29th of this year. how is my pace.
Mike_Summey Mark2007, I try to work with my banks and suggest that if they have a customer that is getting in trouble that they give them my name.
Mark2007 TAS, The deals are there, but they are limited and get scooped up quickly in “side” deals.
TAS I have heard that title companies are a good resource, but as I am just moving into this field have not tried it myself.
Mark2007 TAS and Mike, it’s okay if you are in the “in” crowd which my wife is slowly doing.
MarkCT santosleigh your pace is fine as long as you have enough reserves to cover you if 2 or 3 of the places go vacant at the same time. After doing this for 2+ years the most important thing you can have are cash reserves because things will happen and they will all happen at the same time.
eryk76 I am just getting started and I like to drive the neighborhoods and look for distressed homes that are vacant. I love the winter since you can see if it’s vacant due to the lack of snow removal.
Mike_Summey TAS & others, I still think the best way to find properties is to get out and ride the neighborhoods on a regular basis, get to know people and they will tell you when someone is having problems.
kawhitlock how do you get past the “gatekeepers” at the banks, so you can speak w/ the people that can actually give you the “deal”
Roger Dawson Default notices must be published in the local legal newspaper.
Mike_Summey kawhitlock, you have to make friends with them. Until they think you are a serious buyer they will give you the run around.
Pscherer [kawhitlock] It helps to have a track record have yo bought anything yet
TAS Mark2007, have you tried negotiating with a second or third lien holders. I have heard one key is getting them to take 10-30% of what they are owed, since they typically receive little or nothing at auction, or if it goes REO.
kawhitlock I’m on my second one.
Bob (vegas) believe it or not Vegas is still on micro fiche system for NOD’s
kawhitlock Trying to sell this one because it is in a low-income area, but looking more like I may have to keep it as a rental–just concerned about wear & tear for the area!
santosleigh mark ct, but with a good property manager, it should not take too long to find new tenents.
Mike_Summey TAS, I have purchased several properties where I was able to negotiate deep discounts with 2nd & 3rd lenders and still pay the 1st if full.
Mike_Summey Hi Sol
Sol (Cali) Hi
Bob (vegas) Mike any “subject to” deals crossing your desk?
Mark2007 TAS, I have not approached 2nd and 3rd. Actually, I work at an “amenitized” community and spend 70 hours a week here. My wife is doing the Weekend Millionaire thing. I’m torn about which to focus on. Not enough time!
MarkCT It shouldn’t but sometimes it does. You just need to be prepared and not be caught off guard. In addition to vacancies you have unexpected repair costs. It is better to build a cash buffer and know that you can keep the properties you have then to rush out a buy a bunch and risk loosing them all because of a bad stint.
Mike_Summey Bob, most “subject to” deals violate the loan documents so I don’t get involved with them. Our state is about to outlaw them and the people who promote them.
Bob (vegas) Mike or Roger……have you heard “Jeffrey Gittomer” speak?
Bob (vegas) Comes from NC
santosleigh mark ct, what would you call a good cash buffer for 2 properties.
Mike_Summey mark2007, I can’t solve your delemma! Let her build wealth while you earn a living. Before you know it you will be able to quit.
Mike_Summey Bob, I know Jeffery well.
Mark2007 Mike, you read my mind.
MarkCT As Mike said enough money to cover the mortgage for 3 months.
Bob (vegas) You can solve his delima….
Mike_Summey Bob, I was the one who encouraged him to get into the speaking business.
Mark2007 Bob, how is that?
Roger Dawson Jeffrey Gitomer is a good friend. He’s a wild man!
Mike_Summey Hi cstew
cstew hi all
Bob (vegas) I am going to attend a presentation from hime soon
Bob (vegas) sound like a great guy
Mike_Summey mark2007, which community do you work with?
Corey Mike why did you join the national speakers ass.
Mark2007 Mike, The BriarRose…Lake Oconee, GA
eryk76 anyone here invest in the new england area?
Mike_Summey Corey, so I could hang out with important people like Roger!
cstew puter probs, need a new one, or use the real old one with win 98 that works great!
Corey Mike is it for the contacts you meet or another reason
Mike_Summey cstew, did you have problems getting into the chat?
Mike_Summey Mark2007, did your wife ever get in?
santosleigh mark ct, I guess i am safe i keep $20,000 aside for unseen costs.
kawhitlock yes, I’m hear, just listening to everyone!
Mark2007 Mike, yes, she is kawhitlock!
MarkCT That should give you a nice buffer.
Mike_Summey Oh! Hi Mark’s wife!
Bob (vegas) Welll ……g’nite all…west coast and several more hours of sun….
Mark2007 Mike, she’s in Athens. I’m at Lake Oconee.
Mike_Summey Mark2007, Athens is a good market for investors.
kawhitlock Mike or Roger - Should I keep my current property as a rental, even though it’s in a low-income area?
MarkCT Time to put the kids to bed. Good night all.
Mark2007 Hmmm. She’s happy to hear that. Oh, I have her on the speaker phone while we are chatting.
Mike_Summey Mark2007 & kawhitlock do either of you know my friend Billy Morris in Athens.
kawhitlock No, afraid I don’t.
TAS I am in Tarrant County Texas, and I can get listings no less than 21 days before they go to auction, but I am sure to get the best deals I would like to find them before they get listed publicly. Any suggestions?
Roger Dawson Ka, it won’t appreciate as much but it should show good cash flow.
Scott S Mike, what area do you like better for investing: Greenville, SC; Asheville,NC;Atlanta, GA?
Mike_Summey kawhi8tlock, does it cash flow? Can it be improved to increase rents?
cstew no, is this celeron..going to other machine
Mike_Summey Billy owns Morris Communications that owns the newspaper in Athens.
cstew I can answer that Scott….Greenville lol
kawhitlock Haven’t calculated yet, but pretty sure it will be postive.
Mark2007 Mike, oh, THAT Billy Morris. Don’t know him personally, but have met him at a Chamber meeting.
Mike_Summey Scott, from what I know of these three markets, I believe Greenville, SC may offer more potential.
kawhitlock Billy would be too high up the chain for my level of contacts!
Scott S Great, Thats home!
Mike_Summey Mark2007 & kawhitlock, I lease an office building to one of Billy’s companies.
kawhitlock in Athens??
Mike_Summey In Anderson, SC
cstew asheville is getting high, worries me on new buys
Mark2007 Mike, the reason we’re not sure of the cash flow is that kawhitlock has been “gasp” a speculator. She started out just wanting to “flip” houses, but I’m trying to get her to do rentals.
Mark2007 Mike, we’d/I would rather get out of this low income house and into more desireable neighborhoods (bread and butter as you say).
kawhitlock Unfortunately, that means I have to be “freindly” to do rentals. I’m not very good at that!
Mike_Summey Mark2007, I understand. Once she reads the Weekend Millionaire books and studies our audio program she will know for sure.
Scott S Do you believe the bubble will burst in Asheville and offer some good buys?
Mike_Summey Scott, I think things will definately slow down in Asheville, already have, but I don’t think we will see a fall in prices.
kawhitlock Have done so already, that’s why I really don’t want to keep this particular house as a rental–just get rid of it if I can!
Scott S Mike, will you be speaking in the NC, SC area anytime soon?
cstew I agree Mike, it is slow, and I am KICKING myself over a property in Oakley, but not going down
Mike_Summey kawhitlock, if it was a bad purchase from the beginning and you don’t like it, by all means sell it, learn from the experience and go forward with more knowledge. It not making mistakes that gets you, it’s making the same one over and over that kill you.
Mike_Summey Hi zert, you back?
Mark2007 Anyone. Mike suggests farming neighborhoods and making friends with the banks. Do any of you subscribe to “lists” of any kind that show pre-foreclosures. Does such a thing exist?
zert Yes I am Mike - will need to read the transcript to see what I missed
Mike_Summey Mark2007, how did you like the ACES meeting?
Mike_Summey Hi Ken
kawhitlock Yes, I knew going into this area, it was a risk, but it was such a good price I thought I would take a chance. I shouldn’t loose any $$ on the deal, just won’t make as much, the longer I hold it.
KenJ on AI Hi gang, Hi Mike. Long time no type
Sol (Cali) Mark2007, I found a website today called Realtybids.com that is an online auction site for real estate. They send you info on new auction houses in your designated area.
Roger Dawson Hi Kenj
kawhitlock Mike & Roger, what do you feel about auctions?
KenJ on AI Hi Roger
Mike_Summey Well, I have to confess…I didn’t make any real estate deals last week, but I did commit to purchasing a hig performance modification for my airplane.
KenJ on AI Oh yeah Mike, what’s that?
Mike_Summey I fly it to Arkansas later this week for the installation.
eryk76 When using owner financing once the owner is paid off how is the title or deed signed over? or is that not the way it works.
Sol (Cali) Good question eryk76
Roger Dawson Auctioning is very popular in Australia and I’ll attended RE auctions there. I’m suspicious that the auctioneers have fake bidders there to run up the price.
Mike_Summey erky, the deed transfers at the time of closing. The sellers note is secured with a deed of trust or mortgage just like a banks is. The one exception to seller financing is that only the property is at risk, not your other assets.
Sol (Cali) This Realtybids auction web site is more like an ebay for real estate with Realtors iding the transactions.
Mark2007 Mike, ACES trip was my first, and as I was told it would be, it was great. I’m working on getting down a really good presentation direct from Terry. Bought his CD’s too. As corny as some think it is, I’m going to use a lot of it word for word until somebody proves to me that they have something better.
eryk76 Mike.. erky? lol
cstew I had an owner fin, paid, but nothing on bunc county site, I have paper work, but should I see it there? for future sale.. my home.
Sol (Cali) Mike, with all the foreclosures “looming”, how can we take advantage when the original borrowed price was so high? I’ve seen some REO lists in my farm area and they are barely discounted at all.
Mike_Summey Mark2007, as corney as it may sound, many good programs work when you use them word for word. I’ve made millions using Rogers negotiating program word for word.
kawhitlock I have a question for everyone. Has anyone ever used www.foreclosures.com?
Mike_Summey cstew, did you buy the property from the owner or enter into a contract for deed?
cstew bought from owner, who died, paid estate
Mike_Summey Sol, the only way to benefit from foreclosures whe the original loans were for more than the property was worth is to let the banks foreclose and the negotiate deals with them where they take the loss not you.
cstew 20 yr, paid in 16, she died after 12 or so.
Sol (Cali) Thanks, Mike.
Mike_Summey cstew, but was it done with a property transfer (deed) or was it a contract for deed where the deed would not transfer until you paid the loan in full?
KenJ on AI kawhitlock, I think I’ve tried that and other sites for a free trial. I’ve had better luck with a local circuit court newspaper for finding pre-forclosures. I found the info to be more up to date and accurate.
cstew no, had a mort
Sol (Cali) KenJ, what’s a local circuit court newspaper?
cstew had a lawyer
Roger Dawson Sol, every town or county has a legal newspaper where legal notices are posted.
Mike_Summey Everyone, I’ve always had more luck riding neighborhoods and getting to know the people than I ever have at the courthouse or from the public notices in the newspapers.
Mike_Summey cstew, who is shown as the owner of record on the county records?
kawhitlock Sol, or a Legal Section, in the local newspaper.
cstew want to get to know “my boys” neighbors even better
cstew s
cstew us
KenJ on AI Sol, its a small newspaper published online that details the happens of the local circuit court. Unfortunately, everyone gets this information, so you will be one of many to approach anyone you find this way.
Mike_Summey cstew, so what was your original question?
Sol (Cali) Thanks Kaw and KenJ
Mike_Summey Hi cla333
eryk76 Has anyone here had sucess posting advertisments in the local paper looking for motivated sellers?
cstew I see in the bunc records on line, things show up to cancel mort
cstew other props I mean, why not our doc?
kawhitlock I’m sorry, what is “bunc”
cstew buncombe county
cstew NC
kawhitlock oh, thanks
Mike_Summey erky, I’ve never done it, but I’ve talked with several people who have and they seem to think it has been worthwhile. I will have to say, all of the people I’ve talked with about the ads were speculators, not investors.
cstew yeah, and by the way, that is where the word “bunk” as alot of junk comes from!
kawhitlock cool, will have to remember that little trivia!
cstew k guess it is good night time, thanks for y’alls time!!
kawhitlock goodnight!
Mike_Summey cstew, have you received a copy of the original note marked “Paid In Full & Satisfied?” If so, you will need to take it to the courthouse and have the deed of trust cancelled.
kawhitlock Mike, Mark2007 is about to send you a really long note, just wanted to prewarn you!
Mike_Summey Hottie, you’ve been awful quiet tonight!
Mark2007 Mike, here’s something for you. An investor was referred to me as a potential buyer in my community. He looked but thought he could do better buying foreclosures. When that came up in the conversation, I said we should get together and talk since my wife is doing that. We had coffee at Starbucks one Sunday, and he proposed us working together. He had a portfolio of previous investments. Sounds like he pretty much follows your program. His offer was that we would take turns buying the foreclosures. He would be happy to give us the first one, and we would go back and forth from there. He had an agreement we could sign that seemed very fair, references from bankers and previous people he had worked with. And, he would let us talk to any of them. Sounded like a real opportunity. The catch was, he wanted us to use our money (line of credit) to purchase the houses so that he could intentionally keep them out of his name. This way, they would look like they were “free and clear” and he could rapidly put a new mortgage on them, pay us back and then we’d do another one. Oh, he also offered to let us put a lien on other properties he owned if that would make us feel better. I asked our attorney as well as a mortgage broker friend, and they said to “RUN!” Have you (or anybody) heard of anyone doing this? Is this legit. By the way, I checked up on him, and several people knew of him in the local investors group and seemed to think he was and okay guy…retired engineer. What do you think.
kawhitlock Good Golly!
Hottie Just watchin and learnin while doing taxes
Hottie Ready to fly in the plane when you get the upgrade. Arkansas is close
Mike_Summey Mark2007, RUN. Isn’t that the same sort of dealing that a guy named McCorkle was doing in Florida? He had a TV infomercial about it. I think he’s still in jail.
Roger Dawson Mark, this sounds like a big scam to me. I would never get involved in anything that wasn’t totally open and above board.
KenJ on AI Mark, Why does he need your help if he’s doing so well?
Mike_Summey Good advice Roger
TAS Ken stole my question. Can’t he get his own line of credit?
Mike_Summey Good question ken & TAS
kawhitlock mark can’t type fast enough
Mark2007 All, I could never get a good handle on that. He explained, but maybe I’m just slow (or that’s the scam), but the gist was that he didn’t need us. It would simply be faster.
Roger Dawson I have to run. See you next week!
TAS Although at a high rate you can get hard money, or an unsecured LOC for interim financing if necessary.
Mark2007 All, he does have his own line too, but this way, he could double up in any given month?
Mike_Summey I’ve got to run tonight also. See everyone next week. You’re welcome to stay and talk with each other as long as you want.
Mike_Summey Goodnight
Mark2007 Still trying to figure it out, but we’ve decided to pass. Just wanted your imput.
Mark2007 See ya Mike
KenJ on AI Mark, the investments I’m making that I feel confident, I want to do those on my own.
Sol (Cali) Goodnight
kawhitlock take care mike
TAS I guess my point was that the more “successful” he is the more capitol he should have access to.
Mark2007 Yeah, makes sense. The only thing I can figure is that he waited too late in life and is trying to make up time.
KenJ on AI Mark, you can look and find deals on your own with your home equity.
KenJ on AI Mark good luck and good night everyone.
Mark2007 KenJ, that seems to be the course we’ll take. I appreciate all the input.
kawhitlock yes, this guy just had “an in” in a market area that is foreign to us.
TAS I think you could find a cheaper and less risky way to find a mentor.
Mark2007 Sounds like it.
kawhitlock I agree!
kawhitlock Well, goodnight everyone, maybe see you next week!?
TAS Good night, and good hunting.
Mark2007 Me too. Bye all.
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