Chat Transcript - July 16, 2007
Posted on July 17, 2007
Bill L Hi santo
santo hello Bill
Bill L How have you been and how was your holiday?
santo bill, everything went fine how bout you
Bill L pretty quiet, stay at home and worked around the house
santo my 5th property is under contract
Bill L Great!!!!
santo a 2 family for $44,000
Bill L Hi Penny
Penny Hi Bill and Santo.
Penny Looks like we beet the pros here tonight
santo rents total $900 mortgage $214 hi penny
Bill L how was your holiday penny
Bill L Santo what a deal…..
santo hi roger
Bill L hi roger
Bill L mike
Bill L hi mike
Roger Dawson Hi Santo, Penny, Bill and everyone
Mike_Summey Hello everyone!
santo hi mike
Bill L hi lauren
Penny hello Mike and Roger
Lauren23s Hello, this is my first time here
Roger Dawson Welcome Lauren
Mike_Summey Roger & I are back and we’re ready for a good chat.
Lauren23s Thank you Mr. Dawson
Mike_Summey Hi Lauren! We’re glad you have joined us.
Mike_Summey Hi cambridge
Lauren23s Thank you Mr. Summey
Lauren23s I’m excited and eager to learn
cambridge Hi Mike
Roger Dawson We were attending the National Speakers Association meeting in San Diego. Mike gave a great speech about wealth building.
Mike_Summey Anyone have a burning question to get us started?
Lauren23s I’m a fresh college graduate and I’d like to invest
Mike_Summey Lauren, have you read our books?
Lauren23s I don’t want to get ahead of myself and bite off more than I can chew but I need a game plan. No, but I am certainly making it a priority
Mike_Summey Lauren, you should read the books before doing anything. You will find the game plan right in the books.
Mike_Summey Hi Scoty
Lauren23s Sounds good
Roger Dawson The Weekend Millionaire program is a buy and hold program. Buy one rental house at a time in a way that makes it break even or better and never sell it.
Lauren23s Mr. Summey, which one should I start off with?
Mike_Summey Roger, thanks for the compliment.
Lauren23s Ohhh okay
santo mike, i was telling Bill L about my 5th property, a 2 family that was priced at $47,000 but my broker got the lady down to $44,000, the total rents are $900 and the mortgage is $214. we have it under contract now
Mike_Summey Lauren, I’d recommend the Mindset book first, followed by the Secrets to Investing in Real Estate. The FAQ book is a companion to the real estate book.
Mike_Summey Santo, that sounds great.
Bill L Lauren, they are very good and should be read more then once.
Lauren23s Does it happen to explain good vs. bad debt or is there a real difference?
Mike_Summey Santo, I got an email from someone who wants to talk with you. If you want to hear from him, why don’t you give us your email address in the chat and then he can pick it up from the transcript.
Mike_Summey Hi Yameen
Yameen Hi everyone.
Bill L hi Yameem
scotyl10 Hito everyone. Santo, I am like you I liv ein Ny where things are very expensive. I would like to learn more about investing in Buffalo
Mike_Summey Lauren, chapter 6 of the Mindset book is titled “Debt: Constructive vs Destructive”
Mike_Summey Hi mpaske
Roger Dawson Lauren there is all the difference in the world. Good debt is when the return you’re making on the loan exceeds the cost of the loan.
santo mike, my email is santosleigh@hotmail.com
Mike_Summey Thanks Santo. Maybe the other investor will contact you after reading the transcript or may join the chat tonight.
scotyl10 I have done some preliminary investigation on the web. For investing in Buffalo but I need to have some personal references and some contact numbers of people who can help me in the BUffalo area
Lauren23s I can’t wait to read the book, I’ve heard good things about it and I am eager to learn. I have $7,000 in debt including college loans and furniture for my 1st place. I’m moving to Nashville, TN from Asheville, NC
Mike_Summey Lauren, what takes you to Nashville?
Lauren23s I just graduated from ETSU and I got a job with the Food and Drug Admin
Mike_Summey I understand that Nashville is a very good place to invest.
Mike_Summey Hi zert
zert Hi Mike and everyone
Bill L hi zert
Roger Dawson Scoty, buying the cheapest real estate is not always the best thing. Desirable real estate enables you to raise the rents faster and keep them occupied. Problem is that you have to put more down to get cash flow. But if I’d have put 50% down on a four plex in Beverly Hills 20 years ago, it’s all the real estate I’d need to own.
Mike_Summey Roger is bailing out on me until August 13th. He’s heading to China to speak.
Mike_Summey Hi Scott
santo scoty 10 try the website bid4assets.com they have a lot of buffalo properties on it and real estate brokers you can contact
Scott S. Hi all
Roger Dawson Hi Scott
Mike_Summey Hi intromaster
Lauren23s I may be ahead of myself a bit…I got an apartment at a beautiful property. This is my first place and I love the area. After learning more I’d like to consider investing in Real Estate in Asheville or Nashville
intromaster (MikeF) Hey everyone!
Bill L hi Intro
Lauren23s This of course means getting on my feet 1st
scotyl10 Santo according to what is professed on this site. I really also would like to know a good property management company. Could you suggest one?
Mike_Summey Lauren, you may find it easier to find good deals in Nashville than in Asheville. Asheville has yet to experience the slide in prices some areas of the country are experiencing.
Bill L Roger, China where abouts?
Mike_Summey I think it will be another year before Asheville feels what the rest of the country is feeling right now.
Mike_Summey Hi jmich
jmich18 ‘Evening
Lauren23s Oh yes, I know. I saw a similar place near Valley Springs MS and that property was MUCH higher than the Hamptons at Woodland Pointe in Nashville
Roger Dawson I’m speaking in Shanghai for three days. Then my wife and I are going to Tibet, Xiang and Guilin.
Mike_Summey Roger is going to climb Mt. Everest
santo scoty 10 wny4rent is the firm i use, todd@wny4rent.com
intromaster (MikeF) I need a little bit of help structuring a deal.. The price is 45K and the home rents for $700 month. after calculating, the NOI is $321.92
Bill L Wow, That sounds like a wonderful trip. Enjoy…
Mike_Summey intromaster, do you have the Offer Generator program?
Roger Dawson I did climb to the base camp of Mount Everest when I was young. Don’t think I could do it now.
scotyl10 wny4rent. Is that a website?
intromaster (MikeF) yes, I am using it, but stuck
santo scoty 10 that is the name of the company
intromaster (MikeF) I have cash to offer the seller, but dont want to use tie it all up in this property
scotyl10 I’ll give them a try and possibly make a trip up to Buffalo to check out a few properties.
intromaster (MikeF) I want to use it for reserves (just in case)
Mike_Summey intromaster, when you get to the part where you compute a financed offer, put in the amount you want to pay for the property, the payment amount you want to make and then adjust either the interest rate or the length of the loan to determine how you can pay that price with the NOI available.
intromaster (MikeF) the seller is asking for $16K down
Mike_Summey intromaster, the Offer Generator will calculate the circumstances under which you can pay what the seller wants or it will compute what you can pay under the terms the seller wants.
Mike_Summey Hi Kelly
Kelly hi
intromaster (MikeF) I want to offer between $32K - $38K
intromaster (MikeF) ok, will do
santo mike, have you bought any new properties lately.
Mike_Summey intromaster, there is always a circumstance under which you can pay the amount the seller is asking or a price at which you can meet the seller’s terms. It’s seldom that you can do both.
Mike_Summey santo, only the two houses I bought from a bank a few months ago. I’m currently devoting most of my time to the new office building I want to build.
intromaster (MikeF) ok, working on it now! Mike
Kelly Mike, how do you feel about houses in neighborhoods with home owners associations. Do they ever restrict use as rentals?
Mike_Summey Kelly, houses are not as much problem as condos or townhomes, but homeowners associations can be a real problem to investors. That’s why they are called homeOWNERS associations instead of investors associations.
Mike_Summey HI Ken
Kelly Mike, what should I ask to see if one is ok or not?
Ken I was running late
Mike_Summey intromaster, just keep working on the numbers until you find a combination you think might work.
Roger Dawson Yes, homeowners associations can pass a ruling that there be no rentals.
Mike_Summey Kelly, ask whatever you would like.
Mike_Summey If anyone has a question, just jump in and ask it. We will try to keep up.
Ken Roger My association has that rule but there are rentals. I don’t think the association is stron enough or even wants to deal with it now. I am sure they will in time
jmich18 Kelly: Many associations restrict or ban rentals, around PA and on Long Island, NY - you have to review the restrictive covenants, by-laws and rules before considering a deal…
Roger Dawson I think that one of the reasons Mike is so successful is that he’s a good numbers person. He runs the numbers on what a property is worth and never let’s his emotions get in the way.
intromaster (MikeF) I can offer his asking price of $45K but I dont want to pay $16K cash down
Penny good response Mike on the homeowner’s assoc. vs investors’s assoc. So true.
intromaster (MikeF) I am doing what you suggest, Mike!
intromaster (MikeF) thanks so much!
santo mike, i will have 9 units soon with the 5 properties, am i doing okay for 6 month’s work. i am only a rookie as you know.
Lauren23s I need to read the book 1st then I’m SURE I’ll have many more questions. I’m doing more listening now
Roger Dawson That’s great Santo
scotyl10 Santo I fou. nd a website dpmny.com which is dependable property maintenance. They have houses for sale and also do the managment. Have you every heard of these people
Ken Lauren if your new to the chat I would write question down on paper in the week to prepare for the chat, that has helps me lots.
santo thanks roger
Mike_Summey jmich, that is true everywhere. The problem is that even if you review the documents, there’s nothing to stop the association from ammending them after you buy. What’s even more important is to determine what areas of maintenance the association is responsible for and be sure they are reserving funds to handle it. Unless they are, the most recent owners can get hit with a huge assessment because previous owners did not set aside money for what they used.
intromaster (MikeF) Mike, how about u structure the deal for me, and I’ll pay you 
-earn 100 bucks in only 10-15 mins
santo scoty 10 no
Lauren23s Thanks for the tip Ken!
Kelly Mike or Roger, all of my offers lately have been at a price that is at least 70% or less than the appraisal but also would work with the NOI. Which essentially would be a no money down deal since I would finance 100% of the purchase price. I have only had one acceptance in over 1 year. Is this a reasonable approach or is it unrealistic to not have to put some of my own money in as a down payment to make the numbers work?
jmich18 basically very true Mike, however those are sonsidered major changes and have to be voted upon by a majority of the owners. But being careful is of paramount importance!
Mike_Summey intromaster, nice try! 
You won’t learn how if I do the work for you. If you can’t find a way to make it work with the Offer Generator, it could be because it is not a good deal.
jmich18 Mike: What geographical area are most of these folks working in?
intromaster (MikeF) no, I dont want you to do the work, just guidance I will do it and you review it
intromaster (MikeF) dont worry, Mike. I will get it!
Roger Dawson Kelly we’re not big on no money down purchases. Even if you can manipulate the numbers to make the cash flow work, you’re buying a property that nobody else wanted to invest in.
Bill L Northern VA
intromaster (MikeF) the deal is good because I can pay the sellers asking price and still get +cashflow
Mike_Summey Kelly, if you purchase just one property per year, in 10-15-20 years just imagine how wealthy you will be and how much income you will have coming in. What is more likely is that you will get better with time and be able to purchase more than one per year.
Mike_Summey jmich, we hae people in the chats from all over the world.
jmich18 thx…
Mike_Summey jmich, each week is different, but we’ve had people from China to Hungary in the past.
jmich18 great variety! I’m on Long Island and Poconos, PA - soon to be upstate NY (Albany cty)
Ken I am mid state PA.
santo mike, that’s right, i am shooting for 10 units a year with multi family homes
Lauren23s I’m just trying to gather more info and I’m from Western NC
Mike_Summey intromaster, if you can put an offer together with the Offer Generator that the seller will accept and that does not produce a negative cash flow, it will be a good deal.
Kelly Mike/Roger, I could make more deals if I used my own money for the down payment (Large enough for to meet the NOI). I just don’t have enough on hand to buy as frequently as I would prefer. When you started were you putting in substantial amounts of your own earned money? or structuring the deals with minimal impact on your savings?
jmich18 will there be enough buyers around with the upcoming crash in foreclosures? Or will we have to buy and hold?
intromaster (MikeF) I am pluggin in the #’s as I type
Mike_Summey Kelly, when I started I didn’t have any money to invest so I had to make no money down deals. I made offers for an entire year before I bought my first property. I bought 2 the second year and 4 the third year. The rest is history.
scotyl10 I have been to budapest and the whole down town area is booming.fixing up old buildings with modern interiors but keeping the Baroque exterior and giveing it a face loft
santo mike, that office building you spoke of, how many tenants will it hold.
Roger Dawson My first few deals I was always worrying that I wouldn’t be able to scape up the money to close. It gets easier when you’ve got some equity build up.
Mike_Summey jmich, the idea is to buy and hold. I’ve been doing this for over 35 years and I still own every property I ever bought.
jmich18 that’s a remarkable situation Mike, congrats! I look for turn-arounds on lots but am expanding into income properties, slowly!
Roger Dawson Los Angeles is going through the same thing as Budapest. Nobody wanted to live downtown five years ago and now it’s booming with upscaple lofts.
santo mike, i will never sell either
Mike_Summey santo, I’m trying to attract a large corporate tenant to take the whole building or a substantial portion of it. It is over 150,000 sq. ft.
Ken I seen a graph that trended the price of home sense 1890 or so. sense 1998 till now the spike on that graph is the largest by 4 times.
Mike_Summey Wonder where Al Lee is tonight.
Ken Hope he didn’t get washed away with al lthat rain he got
Mike_Summey Ken, that’s why I believe we are in for a huge correction which will be great for long term buy and hold investors.
santo mike, about one of the banks you use a tenant for that building
Lauren23s Time is money…I know I have to be conscious of where and how it is spent. As I mention before, I just graduated and my salary is 48k. I’m going to read the book but at this salary would it be financial suicide to try to invest within the next 2 years?
Kelly Thanks for the info. This is a great resource.
intromaster (MikeF) Mike, what do you think of investing in multi-family (up to 4 units)?
Ken Not sure if anyone will agree but for rentals you need to take care of todays debts first. Nothing like buying a house then a furnace goes out then you put that on a credit card at 19% interest
Mike_Summey Lauren, just don’t try to live a $60,000 standard of living on a $48,000 salary. Live a $30,000 standard and save the rest. If you do that for a few years you will be ahead of about 99% of the people you age by the time you’re 30.
Lauren23s Thanks
intromaster (MikeF) I would like to do these deals because it’s better cash flow and a faster way to reach my goals (5K net monthly income)
Ken intromaster that is my goal as well. long way to go for me.
Mike_Summey intromaster, small multi family properties are great, but I’d recommed getting 2-3 single family house first just so you can get some experience. Multi family properties come with more problems than single family.
Roger Dawson Delayed gratification takes discipline when the entire world is trying to get you to spend yourself into debt.
Lauren23s I’m thinking of setting aside a percentage of my paycheck each month but I need to sit down with someone to figure what is a good percentage to set aside
jmich18 Anyone rent to Section8 tenants? If so how has the experience been?
santo mike, how about one of the banks you use as a tenant in that office building, do you know what i am thinking about.
Mike_Summey In our Secrets to Investing in Real Estate book, we list the #1 mistake new investors make as “Being Impatient.”
Ken www.cnnmoney.com I just seen some ranking of affordable homes seems OH, western PA and some of NY are tops on that list
intromaster (MikeF) ok, thanks!
zert jmich18 - I rent to Section 8 tenant, Section 8 pays a portion and the tenant the remaining portiopn, so far so good
Roger Dawson Jrich, you’ll get mixed reactions to Section 8 tenants. They don’t care could care of the property but at least you know where the rent money is coming from
Mike_Summey Lauren, sit down with yourself. The more restraint you can have in the beginning, the faster you can reach financial independence. A person who saves and invests 30% of their salary becomes wealth several times as fast as someone who saves and invests 10% of what they make.
jmich18 thx Roger
Mike_Summey jmich, opinions on Section 8 vary. Several people like the program very much. My personal experience has not been that good. I don’t like the caliber of tenants that come from Section 8.
Bill L Mike, you wrote the article about Chevy vs Cadillac. A prime example…
Mike_Summey Yes Bill, that is correct.
Lauren23s Is there a way I can get the chat transcript from tonight?
jmich18 thx you Mike
Bill L The numbers say volumes
Mike_Summey Lauren, if you are in Asheville, did you read that column in the newspaper?
Mike_Summey Lauren, it will be posted on the website tomorrow for everyone to read.
Lauren23s No Sir I haven’t.
zert Mike / Roger - I have only had the S8 tenant a short time so it is really too early for me to form an opinion either way
Lauren23s Great thanks
Mike_Summey Lauren, you will find the article on the website also. It should still be one of the ones on the home page.
Lauren23s Thank you
Lauren23s I am just starting out in the “real world” and I want to do everything I can to do it right!
Mike_Summey Bill, that Chevy vs Cadillac example is also on page 32-33 of the Mindset book.
intromaster (MikeF) Mike, do you put a 10% for desired return on the down payment? (offer generator)
Bill L Yes, I know but the article I has some added info.
intromaster (MikeF) I mean any percentage
Mike_Summey With Roger leaving for China, I will try to have some other experts fill in for him the next few weeks. I’ll let everyone know via email who my guests may be.
santo mike, up in buffalo, all we have is chevy’s
Bill L Thank you Mike, Have a wonderful trip Roger.
Penny Roger, I hope your time in China is productive as well as pleasant. Enjoy your time with your lovely wife.
Bill L in VA it is a 15 year old ford…
Mike_Summey intromaster, use whatever percentage you feel comfortable with. There is no magic number. The higher return you want on the down payment the less you will have to cover the financing.
Mike_Summey There’s Al!!!
scotyl10 if I come to buffalo there will be a Mustang there to
Bill L Hi AL
Al Lee Better late than never!
Al Lee Hi
Roger Dawson Thanks Bill. China’s an exciting country with a great future.
Mike_Summey I was just asking where you were tonight.
Al Lee I got tied up with a meeting and just got back
santo the famous Al Lee is here yea
Al Lee Bidness!
Penny Hey Al, you made it just in time for me to say goodnight to you.
Al Lee Hi, snato
Al Lee goodnight , Penny
Al Lee santo
Roger Dawson Hi Al. I had a great time in Plano last Thursday. That area is booming!
Al Lee Roger, you bet it is!
santo hello AL
Al Lee Next time we need to have dinner or at least a few drinks
Roger Dawson I’m looking forward to it.
Al Lee Fastest growing metro area in the US
Al Lee The GPS in my car can not keep up with the changes. Sometimes it thinks I am driving on the grass because the road is so new it is not in the database yet
Roger Dawson I thought that the Main Street concept was a great one. I’d seen one the week before in Minneapolis. I can see all developers doing that in the future.
Al Lee We set the pace for the rest of the US 
Al Lee Did I miss much interesting chat tonight?
Roger Dawson You’ve already got LAs traffic!
Roger Dawson You missed a great chat
Mike_Summey Al, I flew my plane to Carson City, NV then on to LA to visit Roger and then we went to San Diego together. I flew home Friday.
Al Lee Mike, I envy you that plane !
santo Al, yes please don’t be late
Scott S. Thanks Mike and Roger; great chat….
Roger Dawson Thanks Scott
Al Lee Roger, do you ride shotgun in Mike’s plane?
jmich18 Good night folks, thanks for the input!
Roger Dawson No he put me back in the baggage section
Mike_Summey Thanks everyone for joining us.
Al Lee Does Mike let you do a few aileron rolls ?
zert good nite everyone, have a great week
Mike_Summey Al, I had my sons as co-pilots.
scotyl10 Al I really enjoy your streaming audio from your web site it is very informative
Al Lee goodnight, zert
santo nite all
Penny goodnight Al, Roger, Mike & all. See you all (except Roger) next week.
Bill L Good NIght Santo
Roger Dawson Al, Mike was a real star at the convention. After his talk people were swarming around him!
Mike_Summey Goodnight all. I’m going to call it a night. See you here next week.
Al Lee scoty, thanks. We have had some tech problems a few weeks and the soudn quaiity is not what it ought to be on those recordings–sorry!
Al Lee Goodnight, Mike
Bill L GOd NIght All, see you next week.
Roger Dawson Goodnight everyone.
Bill L Good Night
Mike_Summey Al, we have a new book coming out later this year. We’ll have to do a show about it when the time comes.
Al Lee Mike, absolutely.
Mike_Summey Goodnight all!
Al Lee Let me know when it is coming out and we will shcedule you on then.
scotyl10 I got to go also see you next week
Al Lee I will log off now, too
Al Lee night
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