Chat Transcript - November 12, 2007
Posted on November 13, 2007
Mike_Summey Hi broadway
jmich18 Evening all!
Mike_Summey Hi santo
broadway good evening all
santo hi mike
jmich18 John from Long Island says Hi!
oz Oops i was WRONG…
Mike_Summey Hi John from Long Island
santo hi roger
Mike_Summey I invited the listeners on Frankie Boyer’s show today to join us. Maybe we’ll get one or two of them.
Roger Dawson Hi Santo and everyone. Sorry I’m late. My son’s birthday party is cranking up and it’s crazy around here.
oz Hi roger, mike, and all
Mike_Summey hsafdari, where are you located?
oz Mike, i got the notice to late to listen in
Mike_Summey Did any of you take a look at the marketing materials for my new building that are now on the website.
Roger Dawson Mike, how did you speech to the sixth graders go? Did you get any offers to buy signed?
Mike_Summey Roger, it went extremely well. Those young people were on the edge of their seats taking notes. You shold have seen it. The teacher said he wished he could get them to pay attention taht way.
broadway train’em while their young!!!
Roger Dawson Congratulations Mike. I never was any good at talking to kids.
Mike_Summey I’m flying to Enterprise, AL next Tuesday to help my son Matt buy a house there.
Lon Mike, I’m pulling up the building info now.
Mike_Summey He will be in Enterprise for a couple of years going through Apache flight training.
Roger Dawson Is Matt in training there?
Lon Mike, did Matt ever check out Richard Davis’ show “The Real Estate Pros”?
Mike_Summey Roger, he reports for duty January 7. We’re going to rty to find him a house before then. He will rent out a couple of rooms to other pilots.
Mike_Summey Hi IB Mally
IBMally Hi all
Mike_Summey Lon, I told him about it, but he hasn’t mentioned it.
Roger Dawson I spoke to 350 real estate agents and brokers in Wilmington, NC. Never been there before. Nice, friendly town. I was impressed.
Mike_Summey Roger, did you tell them they should have me next year?
Mike_Summey The unsold inventory here in Asheville is exploding. I think by the first of the year there will be deals everywhere.
IBMally If you like Wilmington, go a few minutes south to Oak Island, nice vacation spot
IBMally Quiet night
Roger Dawson Not yet, Mike. I wanted to get paid first, then I will. Sold $5200 of CDs.
Mike_Summey One of the neighborhoods where I own several properties has not had more than one or two For Sale signs up at one time in the past couple of years. Saturday when I rode through there were 14.
Mike_Summey Hi Phoenix & Penny
Phoenix Shredds hello mike, everyone
Roger Dawson IBMally, they gave me a tour of the beach area but don’t think we got to Oak Island. Andy Griffith has a huge horse farm by the water. Beautiful property.
Penny hello Mike
Roger Dawson Hi Penny!
Penny & u2 Roger!
IBMally Property here (north pf Pittsburgh) remains stable. We never get the big swings up or down.
IBMally I would love to retire somewhere near WIlmington, lived in Winston Salem for a few years, much nicer waether than Pittsburgh!
Mike_Summey Everyone, I have two great guest for next Monday. Maxine Sweet & Rod Griffin. They are the Vice President & Senior Manager of Public Affairs for Experian, the credit reporting people.
Al Lee Hi, Mike, Roger
Al Lee anto
Al Lee hi, santo
Mike_Summey I’ll be sending out bios on them in the next couple of days. Get your credit questions ready.
Mike_Summey Hi Al
Roger Dawson I was just at a friend’s house today that apraised for $880,000 two years ago and reappraised now for $500,000. That may or may not reflect the true values. It does illustrate how conservatively bankers are treating real estate these days.
santo al, what happened yesterday on the radio show
Roger Dawson Hi Al!
Al Lee santo, I don;t know-what happened?
Al Lee Were you unable to listen?
Al Lee Hi, Roger
Al Lee santo, the show was recorded and is running in the schedule now, though
jmich18 Roger, what area was that house in please?
Mike_Summey Many of the ARM loans that were made over the last several years contain prepayment penalties. What’s happening is that when the paymants adjust people can’t make them and they can’t sell so the banks are forclosing and eating the profit they expected from the prepayment penalties.
MarkCT Hi Mike, Al, Roger
Mike_Summey Hi Mark
santo al, there was no sound, and for the whole hour i spoke to a woman named mary beth about real estate
Al Lee Hi, Mark
Mike_Summey Mark is the programmer for the Offer Generator software, so if any of you have any questions about it now’s the time to ask.
Al Lee santo, you “spoke” or messaged?
IBMally folks can I get your advice, I’m getting ready to close on a property that needs some repair. I’ll be paying cash. Is there a better way to do the transaction than to use a HELOC to pull most of my money back out for another property purchase?
Mike_Summey Hi Shane
santo al messaged, she had no sound also
shane_Ky Het Mike
Roger Dawson jmich18. It was on the intercoastal waterway a half mile south of the drawbridge. Other than that , I don’t know where I was.
Al Lee santo, I will have to look into it. I did not know anyone was having trouble hearing.
Mike_Summey IBMally, why don’t you use your HELOC for a down payment and finance the balance with a bank.
shane_Ky I mean hey Mike
MarkCT I don’t know about the rest of you but the the stock market going south the way that it has been its nice getting rent checks in the mail.
Roger Dawson Hi Mark, welcome
Al Lee santo, I shoudl have been able to see you dialoguing with Mary Beth, also. I did not see that.
jmich18 Thanks Roger but what town/state?
santo hi shane, how are those 350 units coming along
shane_Ky Great
Roger Dawson Jmich, Wilmington NC.
Mike_Summey Mark, I’ve been smiling as my rents increase, vacancies go down and the stock brokers cry.
jmich18 Ahhhhhhhh, thanks!
Phoenix Shredds Well I have prior engagements, so I have to make an early exit. See you all next week.
Roger Dawson Bye Phoenix
santo al maybe me and mary beth was doing something wrong
MarkCT I have the lowest vacancy factor I’ve had in a while.
jmich18 Anyone here do commercial? Specifically strip malls?
Al Lee I have decided to try buying mineral rights and royalties on gas and oil. I am givnig it a try with one purchase and will let you know how it goes.
Mike_Summey Mark, when the sales market tanks the rental market usually booms.
shane_Ky I have a low vacancy rate, but need to work on collections more
Al Lee Our rental market in DFW is booming now, too.
IBMally I was thinking I could tie up less cash. Purchase $88,000 plus $15,000 repairs. ARV $125,000 - $130,000. If I finance now, I will only be able to mortgage about 80-90% of the $88,000.
Lon Mike, on the ARMs, how much are the penalties, generally?
Mike_Summey When I go to Enterprise, AL next week, I will take my laptop with the Offer Generator on it and Matt & I will find a good property before we come home.
Mike_Summey Hi rocky
MarkCT Al I saw an advertisment for a home in the Dallas / Fort Worth area for sale as a rental that included mineral rights and generated an additiona $50 - $150 a month in income. What exactly are they getting paid for? What does mineral rights give you?
santo al, i just replaced a furnace yesterday, got a year old one for $1200
Mike_Summey IBMally, tell the bank you are going to pay for the $15,000 in repairs and you want them to finance the balance. You may have to escrow the money for the repairs, but you should be able to find a bank that will do that.
rockydidonna hi everone I havn’t been able to make the chats In 2 months but I read them on tuesday mornings
Mike_Summey Lon, many of the ARMs have a prepayment penalty that is enough to make up the difference between the low introductory rate and market rate. The banks were betting that customers would not be able to make the higher payments when the loans adjust and they would be forced to sell. Then the banks would collect the difference as a prepayment penalty.
Al Lee mineral rights is the subterranean rights to whatever oil, gas, gold, silver, etc. is taken out of that land. Often one party owns the surface rights and someone else owns the mineral rights to a piece of land. In the DFW area recently some developers accidentally forgot to exclude the mineral rights to the lots they sold and the homeowners ( I own one such property) own the mineral rights. If oil or gas it pumped out of the property, the owner of the mineral rights gets a royalty. That is nice easy money!
Mike_Summey rocky, well you’re here now, so if you have any questions let’s have them.
MarkCT Its not the default that you own the mineral rights to the land you purchase? Is that something that you have to specifically negociate for?
IBMally Santo, how did you find a one year old furnace?
Roger Dawson Mark: I get mineral rights on my home. About $300 a month because they drill oil out from under my property. Technically they have the right to come onto my property and drill if they wanted to, but I’ve never had a problem with it. One year I got a new fence from them when they wanted to bring a truck onto my property to replace an underground meter.
santo al, my real estate broker offered me a 4 family brick house for $80,000 but i am holding off to build my reserves a little more
Al Lee IN most cases the person who owned the property 100 years ago retained the mineral rights when they sold the land. It is unusual to get the mineral rights when you buy land. Sometimes, however, you get lucky.
MarkCT Have you and Mike scheduled your debate yet? It would be very interesting. After having done this for almost 3 years now I have my own opinions about which is better but It would be good to hear the experts duke it out.
santo bmally, my property manager found it
Al Lee santo, better safe than sorry. I wise man I know said he has never lost money on a property he did not buy.
Mike_Summey Hi jim
jimNC hi all
Roger Dawson Mark the concept of ownership is that you own from the center of the earth to the heavens. Any exclusions to that must be in writing in the title to the property.
Lon Mike, wouldn’t it make sense for the bank to offer the owner the chance to refi, absorb the penalty in the new loan, or forget the penalty, charge them higher points on the new loan, and save them the hassle of the foreclosure and loss in the short sales?
Al Lee Mike and I have not talked this week. we do need to get something going on that.
broadway wish I could stick around for the rest, got an appointment with my wife and two daughter in laws. I’ll look forward to the chat next week with Experian. Thanks Mike and Roger and all.
broadway good night
santo mike, anything new on your project
Roger Dawson Lon, I think that the lenders are going to have to be flexible during this crisis. One solution is for them to leave the payments the same but increase the length of the loan.
Mike_Summey Lon, that makes sense to us, but we aren’t banks. In my opinion, the banks got to flying so high in the recent boom that they didn’t think they could lose. Hello! Reality has a way of creeping into the economy when things get out of line.
jimNC Mike, why do you recommend starting with FSBO first weekend? Just curious…
Al Lee Roger, that is right, except that those exclusions have been written into the titles of 99% of the parcels of land that you will find for sale. In the DFW area and the case of the developers I mentioned, they did not realize that they owned the mineral rights to the land they developed and then did not notice that they had failed to exclude mineral rights when they sold the lots to builders, who sold them to buyers without excluding minerals because nobody normally THINKS they own the mineral rights. They usually have been excluded long ago. SOmetimes, as I said, you get lucky.
rockydidonna Mike I found a money partner who has $400,000 to invest and wants to give me a 40/60 split in his favor for any deals I find what do you think about that
Mike_Summey Roger, increasing the length of the loans is a no-no for banks. That’s why they like to have balloon payments come due about every 3-7 years. It keeps the maturity of their loan portfolio shorter and that’s good for them.
Al Lee rocky, I think I coudl find you deal that you can buy at about 65% of value right now if you have $400k to buy with. Cash talks!
shane_Ky Any guesses were interest rate will go or stay
rockydidonna where are you located I’m in the chicago suburbs
Mike_Summey rocky, I’m not a good one to ask. I’ve never had a pratner nor an investor in any of my real estate deals. I preferred to take it slow and build my portfolio as I could rather than to build it faster with partners. That’s just my way of doing things. I know others who have done very well with partners.
shane_Ky Santo. did any deals lately
Al Lee I have a medical office building that has been offered to me that will nedd about $500-600k down for a $3M property. It could be bought for well under market because of a legal situation that the doctors who own it are involved in. If you have $400k I coudl easily find the other $200k (already have interested parties) to take the whold deal down. It is a very nice proeprty.
Mike_Summey shane, the problem with further reductions in the interest rate is that it tends to devalue the dollar and with the price of oil where it currently is we have to be very careful about weakening it further.
shane_Ky I agree
Al Lee The weak dollar is one of the main reasons why the oil price is so high. It is expressed in dollars!
shane_Ky but it sure is nice for an investor with lower rates
MarkCT Al would you recommend putting the entire 400K in one property instead of spreading it around to multiple properties and hedge your vacancy risk?
Mike_Summey I’d be surprised if we see any further reduction in interest rates until after the first of the year and maybe not then.
Roger Dawson Rocky, being a minority owner really boxes you in. I think you’d be better off to take a cash commission on the first deal so that you’d have money to invest on your own. Be careful how you do it. In most states you need a real estate license to accept a commission.
santo shane, no just trying to build my cash reserves right now, because there are always good deals in the area where i buy—buffalo ny— like i said before a 4 family brick house is going for$80,000
rockydidonna I’m with you Mike I never had a partner but I’m kind of maxed out right now and feel I need a panter to get it going again.
Mike_Summey Roger, is a finder fee treated the same as a real estate commission?
shane_Ky I hane a refi in March, so any reductions appreciated
MarkCT Smart move Santo. You can never have too much in reserves.
Al Lee Mark in the case of this property, if it does come to fruition, it is a slam dunk. It will be sold because a group of doctors own it and they do not agree on anything. It will be a distress sale soon and that means DEAL BABY! It is in an excellent area close to a majro hospital and with high occupancy rates all around. It is in excellent condition. It is the victim of multi-party ownership woes.
rockydidonna I ‘m a real estate broker
Mike_Summey rocky, why not stop and catch your breath a while. build up some cash reserves and wait a few months before you buy again. I think the deals will be better in a year anyway.
Penny saying goodnight early tonight, see you next week. goodnight
shane_Ky thats a good deal, I found 36 units for 15,500 per unit, but not in good shape
Roger Dawson Mike, I don’t know. I would be cautious in case the investor refused to pay you at the last minute claimed that it would be illegal.
MarkCT Have to say goodnight too. Its good chatting with you.
Roger Dawson Goodnight Penny
Roger Dawson Rocky, then it’s not a problem.
Mike_Summey Lon, did you get my second email today about the apartments.
jimNC mike, why do you advise locating FSBO properties first…just curious?
rockydidonna I hate waiting around I feel I’m getting stale but I don’t want to do something just to do a deal and do something stupid
Lon Yes, I sent off for the information. He mentioned it might be easier for you to talk directly with the owner. I’ll send you the Broker’s contact information.
Mike_Summey jim, I didn’t know that I did unless you’re talking about the 8 weekends at the end of the real estate book. If so that was just an order to get you to do the things you would need to do to get started. Personally, I prefer to deal with realtors.
Mike_Summey Hi BFP
BFB hello
Mike_Summey Thanks Lon, do that & I’ll call him.
jimNC i was referring to end of book…I just finished it. thanks.
BFB I’m a bit late, and I know that this is going to end very soon. I’ll see you next week. Goodbye, all and have a pleasant week.
shane_Ky Thanks everyone, got to go
Mike_Summey Jim, those exercises are designed to get you to try the things you need to do to be successful. The order is not necessarily set in stone.
Mike_Summey BFP, we’ll be here a few minutes longer if you have a question.
Lon Mike, I like the look of your new building. Nice and close to I-26 so I can see ith when I drive by it and say “I know who owns that!”
jimNC understood.
rockydidonna is there anyone from chicagoland
Mike_Summey Lon, all I need now is a client for the building.
Lon You’ll find someone.
Mike_Summey rocky, don’t you have a corporate headquarters in Chicago that would like to move to the #1 place in America to live & work?
jimNC mike, why do you want them to move to Raleigh
rockydidonna mike where is the #1 place in america
jimNC 
Mike_Summey I think I’m trying to catch a cold. Nose running and feeling tired.
Mike_Summey rocky, Asheville, NC. Check out the info on the new building we jsut put on the website this week. Read the “Welcome Letter” for all the details.
jmich18 good week everyone! good night
oz Gotta run, g/night all, thanks, happy holidays
jimNC wow, building looks great
IBMally Thanks for the advise tonight gentlemen, talk to you soon
Mike_Summey Goodnight IBMally
rockydidonna Mike if I move to the north carolina I not much for nascar but I do like wrestling
Roger Dawson Don’t miss next week’s meeting with the credit rating service executives. It should be very informative.
Lon Rocky - pro or amatuer?
rockydidonna pro
Lon Whoooooo
Lon Ric Flair country
jimNC lived in charlotte for 3 years…big nascar. now lived in raleigh area for 3 yrs, and nascar culture not nearly as prevalent
Mike_Summey rocky, we have plenty of that here too. Mid Atlantic Championship Wrestling is headquartered in Charlotte.
rockydidonna is ric flair popular there
Mike_Summey yes, but he’s getting old.
Al Lee Okay, I am being called to help with 6th grade math and it is too hard for me to do while I chat, so I need to sign off a few minutes early tonight
Lon Definetly in the Carolinas, especially from the old NWA/Crockett days.
Al Lee Goodnight Mike, ROger, everyone.
Lon Night Al
Mike_Summey Al, give me a cll this week and lets set up our debate.
Al Lee goodnight, santo
Al Lee yes let’s get that started
santo nite al
rockydidonna I heard his house is for sale in charlotte
Lon Probably part of the divorce settlement.
Mike_Summey rocky, I was at a coctail party with him a few months ago. He’s not a very big guy.
jimNC yeah, he’s little. i was shocked when i saw him
jimNC little being relative or course
Lon He’s what, 6′ tall? 240 ish in real weight, not his “WWE” weight.
rockydidonna Mike are you going to get carlton sheets on this chat
Mike_Summey Lon, I’d guess more like 5′10′ 200#
Mike_Summey rocky, Carleton joins us periodically. I’m sure he will be on a chat again before year end.
jimNC i saw him at Hornets game. if it weren’t for unmistakable hair, i wouldn’t have believed it was him
Lon That would mean I’m bigger. But he’d still kick my butt, and he’s 17 years older than men
Lon me
Mike_Summey Lon, he’s totally different in person thatn in the ring. Nice guy.
jimNC i’m bigger too, but i think he’d beat me like a rented mule
Lon That’s great to hear.
santo mike, i am 6′3 260—and can bench press 350 at 61 years old when i was 19 i could do 525
Lon Government mule!
Roger Dawson It’s my son’s birthday so I’m going to join the party. See you next week.
Mike_Summey Well, it’s that time and I’m heading to bed to try to ward off this cold. I’ll see you next week along with our experts from Experian.
jimNC i’m out. have a great week everyone
Lon great chat! Real Estate & Ric Flair!!!
Mike_Summey santo, no wonder you’re getting all those deals. You scaring a few thousand out of the sellers.
Mike_Summey Goodnight all!
rockydidonna 525 bench that great!
santo rocky that was in 1965
rockydidonna thats still great I only got up to 315
Lon That’s impressive for anyone at 19, now or 1965, the year before I was born!
rockydidonna where are you guys located
Lon Santo, you work on farm there, hoss?
Lon I’m in SC.
santo but i slowed down now only 350 at age 61
santo lon , no i loaded tractor trailers for 25 years
Lon Still, 350 is good. I don’t know too many 61-year olds benching that much.
Lon Whatcha gonna do when Santo runs wild on you, brother!
santo lon, at 19 i did a two arm curl of 230
Lon You weren’t loading tractor trailers for 25 years at 19, what did you do before 19 to get so strong?
Lon Beating up them Canucks?
santo lon i started lifting weights at 13–i was 6′1 and 185 lbs.
rockydidonna I have to get ready for tommorrow have to look at 10 propertys talk to you guys next week
santo lon at 19 i was 6′ 3–and 270 lbs. with a 34 inch waist—59 chest
Lon Is your real name Charles Atlas?
Lon Did I see your picture in comic books?
santo no i was camera shy
Lon take care rocky, good luck with those 10
Lon Dang you were quite chiseled.
santo lon i was a little bigger than Arnold
Lon and no roids
santo lon no drugs—-just beer
Lon Did you still play football? That kind of build a coach would slobber over.
santo lon i was supposed to try out for the ny jets in 1966, but it did materialize
santo lon have to go goodnight
Lon yep, me too, talk to you next week
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