Chat Transcript - September 10, 2007
Posted on September 11, 2007
santo hi, everybody, hope you all enjoyed your holiday
Bill L Hi Santo, I did hope you did also.
santo hi roger
Bill L Hi Roger…
Roger Dawson Hi Santo and everyone!
Bill L Roger, WHen is your book coming out?
Roger Dawson Welcome back to our chats. I hope that you enjoyed your Labor Day
Tina Hello All
NCD hi everyone
Roger Dawson Bill, we’re just now sending the corrected proofs back to McGraw-Hill the publisher. The last I heard it will be out in December.
Bill L Roger, I want one….
Roger Dawson Hi TAS
TAS Hello all
Roger Dawson Thanks Bill, I’ll have them print a second copy for you
Roger Dawson Lot of hard work in writing a book and I’ve never found a way to shortcut the process.
Bill L Well I guess we should have a copy for Mike, also.
Roger Dawson With every new book my wife Gisela has a copy bound in leather for my library. This will be number 16.
Roger Dawson Things are looking very good for investors these days. The enemy of the investor who must buy at wholesale is the buyer who wants to occupy the property. They will always pay more than an investor should. With the current credit crunch these people are out of the market.
Roger Dawson Hi Wood. How are things in Beijing?
wood Hi,everyone
wood the CPI is still a little higher than the bank interest
Roger Dawson We are still reeling from our three week trip to China. It’s hard to believe how things are booming over there.
Roger Dawson We went to ChongYang where they make automobiles. It’s a city of 30 million people that I’d never heard of before.
Roger Dawson Who has a real estate question? Mike couldn’t join us this evening but I know him well enough that I can tell you what he’d answer.
wood Reform and opening up have yielded substantial results.
santo roger i enjoyed the weekend millionaire dvds on negotiating, i like your style, but all my deals were done by my real estate broker and my attorney, my broker gets the price of the property down $4000 or $5000 each time or has the seller pay my closing, my attorney got the bank down on the rate, they wanted 9.5% and she got 7.5% on a 30 year fixed rate, all my investments are 400 miles away, so i have to depend on them what do you think of this
Tina Roger, what do you consider a safe investment group?
Roger Dawson Santo, as I remember you live in NY but invest in Buffalo. We’ve always advocated living close to the properties you buy so that you can at least drive by the properties but you seem to make this work.
Roger Dawson Tina, I’m not sure what you mean by investment group
zert Santo = how are the investments in Buffalo coming along?
santo roger, i fly there in one hour
Tina Roger, what to look for in investment groups
Roger Dawson Santo, I would suggest that you shuffle off to Buffalo every 60 days or so, so that you can check that you’re getting what they’re telling you.
santo zert, 6 properties - 12 units doing well
Bill L Roger, WOuld you suggest any books on Negontions(sp)?
zert Santo - very nice, are they all occupied ? I live about 1 hour from there and grew up in Buffalo . My Bills found another way to tear my heart out again !!
Roger Dawson Tina, we have a list of investment groups on our website. Most of them are very good, when they’re run by local investors. You learn a lot by hanging around with people who are in the market looking for buys. We tend to be suspicious of the people that are running around the country giving “get rich quick” seminars.
santo roger, i went there twice and the properties, looked just as good as they did on the internet pictures they sent me
santo zert, all rented
Roger Dawson Bill, of course I’m going to recommend my book, “Secrets of Power Negotiating” Second Edition from Career Press. You can order it from our website or from Amazon.com. It’s out in Russian now, if you prefer.
Tina Roger, thanks for the input. We have 4 different groups available in Austin. Too convient to attend all 4. 1st, 2nd, 3rd, and 4th week.
Roger Dawson Wow, Tina, that’s great. Try them all out and pick the best attended one. When I was in Austin last year I was amazed at the reasonable price of properties there (compared to California).
Tina Roger, for some reason Austin seems to have a strong market.. I’m still learning how all this works
Tina Sellers seems to be getting about 92% of their asking price, depending on the homes condition of course.
Roger Dawson As I travel around the country I’m amazed at the different ratios of rents to purchase prices. As a rough (very rough) rule of thumb, if you can buy a property for 120 times the monthly rent you can make it work. Some cities are well within that ration some are way outside it.
Roger Dawson In Los Angeles the more desirable areas are holding up but the less desirable areas are really having to cut prices to find a buyer.
zert Roger - wasn’t 100 times the norm a few years ago??
Roger Dawson Tina, do you know what the number of days in the market is? That’s a good indicator of the strength of the market.
broadway WOW 120 times?? I’m a newby at this (downsizing from re development) that seems real high if you have debt on the prop.
CBS Hi Everyone
wood Roger,the number here is about 300 far beyond that one,it seems it is not a good market at all.
Tina Roger, just to clarify - a home purchased for $144,000 should yield a minimum of $1200
Roger Dawson Yes, Zert, it used to be 100 times, but with lower interest rates, 120 times is viable or ten times the annual rents.
broadway I need to be more agressive!!!
santo roger i live in nyc so buying anything in my area is out of the question, $750,000 for a i family, so i think i am stuck with this long distance investing, but it is working for me–2008 i plan to buy four 4 family properties so i can add 16 uints to the 12 i have, that will be 28 units in 2 years, this is a good pace for a conservative like me, right, what do you think
Roger Dawson Tina, I had to use my calculator, but yes that’s right.
Tina Roger, go info. Thanks a bunch
Mac Santo, what negotiating dvd’s are you talking about?
Tina Roger, I’m getting us to working with NOI with the Office Generator. I love that program.
Tina oops… Good Info 
NCD what’s noi?
santo mac, the weekend millionaire dvds
Roger Dawson Santo, that sounds like a solid plan. As we say, if you only buy one rental and pay it off before you retire, it’s a better return than Social Security.
papa office generator..
NCD What does NOI mean
Roger Dawson I don’t think that we have DVDs do we? You probably are referring to the CD audio program.
Mac Santo, I can’t find any dvd’s in the WE Millionaire store
broadway Is there a rule of thumb on the amount to set aside from gross rents on repairs on a fresh rehab?
Tina double oops… Offer Generator
wood NCD,NOI means net operating income
santo roger, as Al Lee says, i don’t care if they ever get paid off
NCD thanks for the response
Roger Dawson NOI is net operating income. Your net rents after vacancies, minus Management, Maintenance, Insurance, Taxes, Utilities. It’s what you have left to pay your mortgage with.
Tina can you tell I’m in need of a weekend at the beach?
santo mac, i’am sorry those are audio cd’s
Roger Dawson Broadway, there’s no set amount if you’re talking about the money to make it ready for rental. Get estimates and figure it into the cost of the purchase.
Mac Santo, are you talking about Roger’s Secrets of Power Negotiating?
broadway good, I’m trying to be conservative to be prepared on future repairs after the renter has moved in (water heater, lights etc). thanks
santo roger, i will be 62 years old in dec. so i don’t think i will see the day when my 30 year fixed rate mortgages will be paid off, so the plan is to get as many properties as i can in a short period of time
Roger Dawson If you’re in an area where the rents don’t pay for the cost of owning it, you have to put more money down. Investors who put 50% on Beverly Hills apartment houses 20 years ago are sitting pretty now. Many beginning investors focus too much on low down payment deals.
santo mac,yes
mrsg Hi all
Roger Dawson Mac, Santo, we also have the Weekend Millionaire program on audio CDs.
papa 62….i’m 85years old.
Roger Dawson Hi, MRSG
Tina Roger, can you give a little input ROI % on down payment as well as repair cost return on investment in todays market?
mrsg Any thoughts on what’s the best type of investing in the So Fla market right now?
Roger Dawson My father took out a 30 mortgage when he was 89! That’s positive thinking for you!
santo papa how long are you investing
mrsg It seems that even the wholesalers aren’t buying as they once were
Roger Dawson mrsg, So Florida is notorious for people flipping condos. A year ago half the new condos in Miami were being bought by investors. Stick with bread and butter houses in working class neighborhoods.
mrsg Yes…tons of condos on the market right now
mrsg Any thoughts on investing in Gatlinburg, TN log cabins? Another area of interest of mine
Roger Dawson Tina, Mike is better at numbers than me, but if you figured 6% return on your money invested in down payment and repairs it would seem about right. It’s better than you’d get in a CD (Certificate of Deposit).
Mac Roger, Mike said you might have some information on the forthcoming Weekend Millionaire negotiating book due out at the end of the year.
santo roger, are you into multi unit properties
Kelly mrsg I would rent a cabin from you. I like Gatlinburg
mrsg Really?
Kelly Not to live in but for a long weekend.
mrsg does anyone in this chat know much about these cabins? Do they generate enough passive income?
mrsg f course
mrsg I know people rent them out for vacations
Roger Dawson I was in Gatlinburg once. Nice town. Just down the road apiece from Pigeon Ford, which is arguably the tackiest town in America, not to tak e anything away from Myrtle Beach. Don’t know anything about log cabins though.
Tina Roger, for some reason I keep lowering the % to make the deal look better until those words from the CD’s ring in my head saying “Make The Deal Work For You Too.
santo roger, are you into multi unit properties, do you have any
mrsg Is it possible to own one of these even if I didn’t live in Gatlinburg?
Roger Dawson Santo, I’m retired now but when I was active I owned everything from single family to 36 unit buildings. My philosophy is that you need a mix. Single family for liquidity and multi-unit for cash flow.
santo thanks roger
Kelly I have not looked at cabins but have looked at other vacation areas and it seems to be hit or miss. sometimes they rent well and other times not so well. Friend has one in Park City Utah and it rents for 800 + per night and doesn’t come close to paying for the mortgage.
Tina Roger, Great Tip
mrsg Thank-you for your insight, Kelly
broadway kelly, branson mo is hit and miss and they see 8mm visitors per year. I own a condo there and it’s lean
Kelly Roger did you sell your properties when you retired?
wood roger,market fluctuates all the time,so it seems that sometimes it is a good market and sometimes not.is it right?
mrsg kelly, does your friend have someone manage their property for them?
Roger Dawson Nickerson, who wrote a great book called “How I went from $1000 to a million investing in real estate” about 40 years ago, always warned against investing in resort property. I’ve never met an investor who strongly disagreed with that. There’s much less risk in bread and butter properties.
Kelly Yes, he lives in another state
gggggg Roger, what about properties right outside resorts?
Tina Austin seems to be Condo Happy right now. I’m more comfortable with single-family homes since I’m fairly new to investing in this area.
wood roger,i think it is not a good market here for a long time,because the number is 300 plus not 120.
Roger Dawson Yes, Wood it does fluctuate a lot. We’re going into a buyer’s market right now here in America which is great for investors. Prices may drop but rents rarely do.
mrsg Has anyone on this chat invested and suceeded by starting out not using their own money or credit?
Tina mrsg, great question
mrsg Thanks Tina 
Roger Dawson Wood, China is so different that the USA. In China the government owns all the land. Here we say the value of the land goes up but the value of the building goes down. So, it’s difficult for us to advise you.
Mac Wood, do you get high appreciation?
Kelly mrsg I wouldn’t say I have succeeded in anything but have found it very difficult personally make anything happen without using my own money or credit.
santo roger that 36 unit building you had, was it a problem, or was it a good cash flow
Kelly Roger In Tennessee the duplexes seem to cash flow much better than single family homes. Any downside compared to single fam?
Roger Dawson mrsg, I can see where you can buy no money down sometimes; but no money down and not using your credit (if that means not borrowing money) would be hard to do.
Tina my comfort zone is minimum 3 months reserves, but if you have a motivated seller, things can work out for both parties.
mrsg Does anyone here have experience with flipping contracts?
Roger Dawson Kelly, I don’t see a downside unless the owner is having to pay utitilities. You’re better off to have separate meters.
Mac Roger, looks as if my question may have rolled off the table. Could you comment on the forthcoming negotiating book?
wood Mac ,the price goes up steadily,but i think there is a lot of bubble and not too much appreciation.
Roger Dawson mrsg, you can promote these at investor groups. There are usually some people with money that will pay you for a deal.
mrsg Also ( and I apologize for so many questions) does anyone here have insight into the really cheap properties in East TN for rental income?
mrsg Thank-you for your responses, Roger
mrsg ved Weekend Millionaire audio by the way
mrsg Loved
santo roger, that 36 unit building you had, was it a problem, or was it a good cash flow,explain please
Roger Dawson mac, I’m sorry, I must have missed it. It should be out by December. It’s called The Weekend Millionaire’s Guide to Negotiating Real Estate Deals. Mike will put out an Email when it’s available. Good Stuff!
Kelly Goodnight all, thanks for the chat.
mrsg Goodnight Kelly
mrsg Thanks again
Bill L Good NIght Roger, Good Night All, Great Chat…Thanks
Roger Dawson Santo, it was great cash flow. I made the mistake of trying to convert it to condos and the city ganged up on me and wouldn’t allow it.
Tina Roger, care to give a few nuggets even though we have to wait to get the rest in December?
Roger Dawson Good night Bill
Roger Dawson Tina, we really get into how to locate good buys and how to negotiate with the owners. We also talk about bank owned properties. We’ve got some great real life stories to tell.
santo roger, are rates much higher when you go into 24 or 36 unit buildings
Tina Roger, those real life stories give such clarity.
mrsg What’s involved in finding some sort of coach or mentor for people starting out?
Roger Dawson mrsg, Mike lives in Asheville so he’s more familiar with Eastern Tennessee. He’ll be here next Monday night.
Mac Good night all. Looking forward to the negotiating book. I try to learn as much as I can about negotiating. I found out long ago that more money can be made or lost per hour in negotiating than in any other activity of real estate.
mrsg I know there are boot camps that run in the thousands…just don’t have that type of money to invest right now
Roger Dawson I agree Mac
mrsg Thanks Roger. I’ll try to be here next week as well
Tina Thanks to everyone for tonights chat
mrsg Thanks Tina
Tina Nite All
mrsg Nite
Roger Dawson mrsg, you might start going to your local investments clubs. There’s a list on our website. They can bring you up to speed quickly.
Roger Dawson I have to run, but you’re all welcome to continue. See you next week.
mrsg Have a great night Roger
santo nite roger, and everyone it was a pleasure
wood see you all next week!
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