Chat Transcript - November 26, 2007
Posted on November 27, 2007
Mike_Summey Hello everyone!
santo hi mike
Lon Hey Rosebud, I read last week’s chat. You will get a lot out of your seminar this weekend. Those three are good.
scotyl10 I am haveing Vincent send me listings and they sure look inteesting
Al Lee Hi, Roger.
Lon Hi Mike & Roger.
rosebud Thanks, Lon. I’m looking forward to it.
Roger Dawson Hi everyone
Mike_Summey How did you like last week’s chat?
rosebud It was better than I ever expected.
rosebud I’ve already checked my credit score.
Mike_Summey I think Maxine & Rod will join us again after the first of the year.
santo al, no i was not a marine, they would not have me but i will tell you when i see you in person
Lon Mike, do you know Jim Hitt at Entrust?
oz it was very good mike….
rosebud Great participation, too.
Mike_Summey Lon, yes I do. He has bee a guest expert in a previous chat.
Mike_Summey Hi Mac
Lon I was just thinking he would be.
Mac Good evening Mike
scotyl10 Santo when you go up to boffalo do you drive from the city.How long does it take?
Mike_Summey There was a big article in the newspaper Saturday under the headline “Mortgage Crisis Deepening”
Mike_Summey Hi wps
wps Good evening to you too
Al Lee Mike, what did the article say?
Mike_Summey sub Title was “New wave of failures could launch economic nightmare”
Mike_Summey Hi Penny
santo scoty, no, i fly—1 hour—driving which i will not do, about 8 hours
Penny Hi Mike
scotyl10 Santo is that Jet Blue
Mike_Summey It predicts a downturn like we haven’t faced since the Great Depression.
Al Lee I can tell you that it DOES get COLD in Buffalo in the Winter.
rosebud Lon, are you located in NC?
Lon Rosebud - SC
rosebud Good buys there, I’m thinking.
Lon They did the class in Greenville this past Spring.
santo scoty, yes–$100 one way
Mike_Summey The article was an Associated Press article from New York.
Mac Mike, I read an Economist article that said that the downturn in housing will reduce consumer spending and put a dent in the economy; maybe trigger a recession.
Lon There still are around here.
Al Lee The worse the lending situation gets, the bette rthe renting situation gets.
Mike_Summey That’s correct Al
Mac I think it is really scary that people’s spending is tied to how “wealthy” they feel because of the value of their homes.
rosebud What about interest rates? I hear conflicting opinions that they’ll go up, then no, they’ll go down.
Al Lee ALso, the inflation that might come with that “downturn” ultimate makes us a lto of money in increased equity and higher rents
Mike_Summey When declining sales that lower prices and more rental demand that raises prices meet, the real estate downturn will stop and things will pic up again.
Mac Mike, well said
scotyl10 Santo I work for the airlines so i can jump seat costs $0.Do you rent a car when your up there or does Vincent take you around?
Mike_Summey rosebud, my prediction is that rates will decline for at least another 1-2 years.
Al Lee rosebud, I preach to peopel to use FIXED-rate loan. For those folks, interest rates can go wherever they want; but THEIR loans stay the same for 30 years.
Al Lee If rates do go down, we just refi our loans and lock in the lower rates for another 30 years
rosebud Yep, I know. However, I purchased my own house in Asheville on an ARM and am watching to refinance at a fixed rate.
santo Al, my last 3 family was 8% 30 year fixed with a mortgage of $375 a month total rents $1500
rosebud Santo, you get those great deals 
Al Lee santo, on that deal you coudl have paid 12% and still come out ahead.
Al Lee Nevertheless, the lower the rate, the better.
wps Mike more on the article??
santo Al, 12% is absurd
Mike_Summey My son just bought a house last week using the Offer Generator…and a little help from me.
Al Lee santo, I have seen 18%- for real!
wps Mike tell us about your son’s house deal
Lon Al, was that 30 years ago?
rosebud In the late 70s when interest rates went sky high (18, 20%) I worked in a real estate law firm and it was unreal.
Al Lee Lon, 1970’s
Mike_Summey Hi nisaf
Lon Mike, were you able to contact the owners of those two complexes?
nisaf Hi Mike - question: I live in an area where prices are very high (cap rates approx. 5 to 6%) and it is very hard to find properties that even break even — any suggestions
Mike_Summey Hi alex
alex hi
santo scoty, i think you misunderstood me i plan to go there soon, i have to talk to vinnie, he would meet me and drive me around—but i don’t like to impose i will rent a car
Mike_Summey nisaf, that’s been the case where I live for the last 35 years. You just have to keep making offers until one is accepted. Make offer that work for you because you will be the one paying the bill.
nisaf I have been looking at all kinds of properties — from single homes to mult family up to about 25-30 units
nisaf I thought one of your main rules was — don’t buy unless your property make a positive return cash flow.
Al Lee If you go back 30-40 years the average interest rate will be about 9%. We are still in low-rate times today.
scotyl10 santo do your tenents inBuffalo pay for there own oil if the building is oil heated
Mac nisaf, I live in a similar area. I have bought properties in a distress situation (bad condition, foreclosure, death). I end up with a small enough amount invested that the result will cash flow.
Al Lee nisaf, think about investing out of state. Go to www/buyRentHouse.net and look at the deals there.
rosebud Mike and Roger, I know there are all kinds of landlord/tenant laws these days, mainly to protect the tenants, but if you use a management company, are you protected, for the most part?
santo scoty, all properties are gas furnace— they pay for their own heat
Mike_Summey nisaf, do you have the Offer generator?
nisaf I am still trying — things are very competitive though. I think that with the trotroubles in the stock market lately, many investors are looking to buy real estate.
nisaf No I don’t have the Offer Generator — I don’t see how that can help
Mike_Summey rosebud, that’s one of the primary reasons I use management companies. They are licenses and I require that they carry errors & omissions insurance to protect me if they violate landlord tenant lws.
Mike_Summey Hi zert
Al Lee nisaf, that was supposed to be www.buyRentHouse.net
scotyl10 Santo what are the taxes like in buffalo
nisaf OK thanks Al
zert Hi everyone, Happy Thanksgiving
rosebud That’s why I asked the question. I knew there were other advantages and thought that had to be one of them.
Mike_Summey nisaf, the Offer Generator computes the offer for you and will allow you to generate dozens of ways to buy any given property that will all cash flow.
Mike_Summey Would someone who uses the Offer Generator please tell nisaf why its improtant?
Mike_Summey Hi broadway
broadway Hello Mike and everyone
Mike_Summey Hi Phoenix
Phoenix Shredds Hi Mike, everyone
Al Lee Hi, broadway.
broadway Hello Al
santo scoty, taxes are cheap like everything else 3 family $1200 2 family $700–$800
zert I am looking to make an offer tomorrow on a SFH, funny though people are telling me to wait until next year when the prces come down
Mike_Summey I used the Offer Generator last Wednesday to help my son buy his first house.
zert Mike - I read your note about the OG, that’s cool that you gave the owners a short deadline
rosebud Nisaf, I have yet to use my offer generator, but the reason I purchased was to guide me in creating my offers, which is the value I see to the offer generator. It’s the next best thing to having Mike at my elbow.
Mike_Summey We computed offers on 4 houses, gave the sellers 3 hours to respond and got one rejection, 2 counters and one acceptance within the allotted time.
santo scoty, insurance is cheap too—-one family $690 a year—-2 family $734 a year—3 family $1189 a year
Roger Dawson Because you can make a lot of offers with minimum effort using the Offer Generator, it enables you to quickly locate sellers who want to make a deal.
broadway Mike, that ought to be enough reason to get that software
Mike_Summey Roger, that’s exactly what happened with the offers we made last week.
Al Lee Roger, please let someone else get a word in edgewise! 
Roger Dawson Sorry Al, was I showboating again?
Mike_Summey We looked at 7 houses before lunch, inspected 6 of them and made offers on 4. It took less than an hour to prepare the 4 offers and have them submitted to the sellers.
Al Lee flibbertygibbet!
rosebud I had to keep checking your name to be sure you were still logged on.
rosebud That was for Roger.
scotyl10 Santo those are amazing numbers I definatly have to get up there to start looking after the holidays if the snow isn’t to high
Roger Dawson I’m layed low with the flu and can barely move, much less think.
rosebud Sorry. That’s bad.
wps Al try the web site addresss agin it still doesn’t work
Al Lee Just click on it here: www.buyRentHouse.net
santo scoty, vinnie has a 4 family for $80,000
Al Lee I just tried and it worked.
Mike_Summey Roger has been sick the past week. :p
nisaf It sounds like the Offer Generator might be just the tool to give me a competitive edge in this tough market
santo scoty, that 4 family is is brick
Mike_Summey nisaf, there is nothing like it on the market today. It takes the teachings from our books and incorporates them into a computer program that does all the work for you.
Mac nisaf, what will give you the competitive edge is finding lots of properties to make offers on, THEN use the offer generator to make them
gggggg nisaf-what part of this country do you come from?
scotyl10 Al are there any new radio shows on your site I checked last week but I had already lisented to those but I always find them very informative
nisaf Canada, eh.
Al Lee scoty, there are 2 new ones you probably havan’t heard. Also, another broadcaster intends to record some shows to put on www.WealthRadio.biz
Mike_Summey When we made the offers last week, my son said he didn’ tthink any of them would be acceptable. We bought a 3 br 2 bath 1500sq. ft. house w/fireplace and detached storage building for $86,000. It was listed for $110,000.
Lon What kind of financing on that, Mike?
Mike_Summey Lon, that was a cash offer that we will get financing on later.
wps Mike, explain the OG some more
nisaf Mike - to give you a comparison, that house you bid on would cost about $286.000 here wher I am.
Mike_Summey nisaf, same here in Asheville. the house was in Alabama.
Phoenix Shredds yeah, similar to nisaf, a house like that would probably be in the 300,000 range out here
Phoenix Shredds ahh
Lon nisaf, what part of Canada?
Phoenix Shredds that makes sense
nisaf At those prices, how can you make money renting it out. The rent on a house like that is about 1200 to 2000.
Mike_Summey nisaf & Phoenix, I’ll bet rents are much higher where you are also, right?
santo $286,000 would be the down payment on 12 4 family houses in buffalo
nisaf what is the rent in Buffalo
Lon I know when I lived in Toronto, a small 2 bed 2 bath apartment was $1200 per month.
Lon That was 12 years ago.
Phoenix Shredds well, the rents out here rarely seem to meet a mortgage payment, but they are higher than in alabama, of course
santo nisaf i family–$650 to $750
Al Lee I always look at the rent/price ratio. If a house will bring $1000 a month rent, I value it at $100 times the rent or $100,000. I try to buy below that, but if I pay $100k I will still make out using standard financing.
Mike_Summey Phoenix, as the sales market cools, the rental market will heat up and eventually you will find that you can buy houses that the numbers will work with.
wps Thanks Al got it now
Mike_Summey Al, that’s a good rule of thumb unless there are extenuating factors such as having to pay utilities, common area maintenance, tec.
Al Lee If I look at a duplex, I want 90 times the rent as a maximum price. A 4-plex, 80 times rent.
Mike_Summey Al, also the current interest rates can have a major impact on rules of thumb.
rosebud Al, why decreasing with the number of units instead of increasing?
nisaf Al - so if I can charge 1200 to 2000 for a 3 BR bungalow, nice house. I should be paying about 120 to 200K. However, the selling prices are 275 to 300K .
Mike_Summey Roger, how are the leggs?
Roger Dawson Mike, you endorsed using a rule of thumb? What next?
Al Lee Mike, you are right, BUT, I never pay utilities. If you pay the utilities the tenant will leave the door open with the air conditioning on and you will pay big bucks.
Mike_Summey nisaf, is that selling prices or asking prices. I’ve bought many properties at 50-60% of asking price.
Roger Dawson Mike, the leg clots are improving. It’s the flu that has me knocked out.
nisaf Those are selling prices — these days, selling prices are very close to asking
nisaf All the real estate agents I talk too think prices are too high, but things still sell for the crazy prices
Al Lee nisaf, you have it right. That says you might be advised to look elsewhere. I believe that if you use professional management you do NOT need to live near your rent houses.
Mike_Summey nisaf, be patient and make offers that will work for you. I think you will find sellers becoming increasingly flexible on both price and terms.
nisaf Al - are you behind the buyrenthouse website
Mike_Summey nisaf, is that the price of housing where blue collar workers live?
Roger Dawson WB penny
Penny 
thanks Roger
Mike_Summey qqqqqq, you’re being awful quiet tonight!
Mike_Summey Is there an area of expertise that anyone would like us to have a guest expert join us to discuss?
Al Lee nisaf, yes, my son and I operate that website and we have the houses built.
Lon Tax time is around the corner, CPA? Tax Lawyer?
rosebud I think it would be helpful to have a real estate management rep as a guest.
Mike_Summey I hAd a banker call me today to ask if I was interested in adding to my portfolio before year end.
scotyl10 Santo do many of the people that live in buffalo work in canada or what type of work is there
Al Lee They are all in the Dallas-Fort Worth area,m which is where most of my own houses are. I believe it is the best place to be investing now.
santo mike, real estate attorney
broadway al, how can you determine a good or bad property manager if you have no experience in that field?
Mike_Summey Lon & rosebud, I’ll try to work that out in the next few weeks.
rosebud Thanks. Broadway’s question is right on point.
Mike_Summey santo, we’ll try to have a real estate attorney join us also, but not all states use attorneys for closings.
gggggg mike-I can’t see how even if someone could by a house down here cash, how can you make money with taxes and insurance in the double digit increases.
santo scoty, they work in hospitals in buffalo
Al Lee broadway, it is not easy, but you can start by checking references and professional affiliations. To locate property mangers in an area, look at NARPM.com to see it they have members in that area
nisaf Thanks everyone - have a good night.
Al Lee Sorry, that is www.NARPM.org
rosebud ‘Bye, Nisf.
rosebud Nisaf
Al Lee goodnight, nisaf
broadway I’ve checked that that website but don’t have anyone on that list. I’d have to rely on references but you know they won’t give any bad ones.
Mac Enjoyed it, folks. Got to go.
santo mike, how about a person that owns a property management company
Mike_Summey santo, I can arrange that too. I’ll have one of my property managers join us for a future chat.
Penny Mike, I believe you had a realestate Mangement company represented in one of the earlier chats, Pam. Is that chat still posted where people could see those Q&A’s?
broadway Mike, that would be another excellent chat like last weeks!!!
alex Mike, I live in Northern Virginia, can you recommed a SFH property manager in this area?
Al Lee broadway, if you check several references from one company, you shoudl be able to ferret out the truth about them. It is hard to have good references if you are not doing a good job. I have been used as a reference when I was unhappy with a company and I told the people what I thought. Don;t just check one reference.
Mike_Summey Penny, yes it is. Just click on the chat icon beside one of the chat transcripts on the home page and that will bring up the archive of the chat transcripts. Then click on the “see all” link at the top of the list and scroll down the list until you find it.
Mike_Summey alex, I’m not familiar wit property managers in that area. You might check the link Al postred earlier.
Mike_Summey Hi Zoe, a bit late tonight, aren’t you?
alex thanks
Zoe Yes, but I’m just glad I got to get in
scotyl10 Santo how’s that old car of yours do you store it for the winter.I drive my 68 Mustang all year round it’s my daily driver
Lon Alex, if you have a local REIA group, you could ask some of the members for references also.
broadway Al, thanks for the info. I’ve just taken the approach that I’d manage my own for a while til it got too much but by that time, I’d know as much as a property manager and know all the “tricks” hopefully.
Al Lee broadway, make sure you have lots of insurance and stay up with the laws and changes that affect property management.
broadway Good point Al, thanks
Al Lee Youare the front line when somethng goes wrong if you are managing your own properties.
Mike_Summey I think everyone should interview propety managers to make sure their personality fits with yours. I’ve seen some managers who were great for some people and awful for others. Tell them what you expect and ask how they will meet your expectations.
rosebud Al, that alone makes the management company worth it!
Al Lee rosebud, you are so right!
Al Lee they carry lots of insurance and they are a brick wall betseen you and the tenants.
rosebud That’s what I’m talking about!
Mike_Summey I’ve never managed my own properties from the time I bought my first one. I want to be an investor, not take on a second job.
Zoe Mike/Roger, What you do when your trying to do a deal for a new construction and the listing Brokerage continues to insist that I get a Licensed Agent?
Al Lee There have been numerous instances in which my managers went to corut over a deposit not refunded or some other trivial matter. If I were managing my properties it would hav ebeen me in that courtroom.
santo scoty, it’s in my garage now with a dead battery— i was so busy with the real estate i just did not have time– but with my retirement next month i will get it on the road again—it has 68,000 original miles on it —not bad for a car that is 66 years old.
rosebud Al, some things just are not worth any amount of money.
Mike_Summey Zoe, can you rephrase the question. I’m not sure what you asked.
Al Lee rosebud, right again!
Al Lee , what is your old car?
Al Lee santo, what is your old car?
Roger Dawson Zoe, that doesn’t make sense to me. Why wouldn’t the listing agent want to represent you also?
santo al, i have a 1941 oldsmobile 4 door sedan— the old gangster type
Phoenix Shredds Well, I’ll see you all next week. Mike, I purchased Mindset liek you recommended, so maybew next week I’l have some things to say abotu the book.
Lon Santo - sounds cool.
Al Lee santo I want a 1953 Studebaker Speedster.
Phoenix Shredds ater.
Phoenix Shredds See you all later*
rosebud ‘Night, Phoenix.
Mike_Summey Phoenix, I’ll be interested to hear your comments.
Phoenix Shredds goodnight
rosebud I’m checking out, too. Goodnight, all.
scotyl10 Santo do you have hose bullet hole decals in the windows they are so CUTE
Mike_Summey goodnight rosebud
santo al, when you come to n.y i will show to you and take you for a ride
alex good night
Lon Rosebud, I want a full report on your seminar.
rosebud You got it.
Al Lee santo, you are tempting me to come to NY. You know I grew up in NYC, don;t you?
santo scoty, no i have real bullet holes
broadway I’m going to bail too. Good night all. Talk to you next week.
santo al whenever you are ready
Mike_Summey It looks live everyone is either tired tonight or going to watch the football game.
Roger Dawson Mike see you go to the Florida game this weekend?
Lon It’s been another fast hour. Something about this 8:00 - 9:00 Monday time slot really flies.
Al Lee I’ll be sure to let you know if I am planning a trip up there.
Zoe Sorry Mike, I am trying to help one my brothers at church to get into a new home (i.e. New Construction) and with all the learning I’ve received from the WM materials I consented to help in what ever way I could to keep his cost down for purchase. Yes Roger the listing agent was concerned about “Dual Representation” or something like that pertaining to the way our laws are here in Alaska.
Mike_Summey Personally, I’m tired, I was working with my son last night on patrol with the Sheriff’s ooffice and didn’t get to bed until 2:00AM
scotyl10 Al I was brought up in Astoria till I was 12 them moved to Long Island where i live today
zert good night
Al Lee Astoria is where I lived
Mike_Summey Roger, I did not. Thank goodness!
Al Lee 3450 28th Street, Astoria
Al Lee Queens, NY
santo al, the car is in showroom condition after a $20,000 restoration
Roger Dawson Zoe, I’m familiar with dual representation but I’ve never heard of an agent turning down an offer because of it.
Al Lee santo, sounds cool.
Roger Dawson Gotta run, see you next week.
santo al i grew up in woodside queens
Al Lee I would love to have a classic car and used to have an airplane. Now I have kids again, so all that is out.
Mike_Summey Zoe, me either. Most of the time an agent love to represent both parties. That way he/she gets both sides of the commission.
scotyl10 AL 2615 30th st taht was my adress
Penny goodnight
Al Lee scoty, we were neighbors if you happen to be about 61 years old!
Lon goodnight penny
Zoe I think their worried about if I know what I’m talking about
Mike_Summey I’m outta here too. Goodnight everyone. See you next week!
santo nite mike
Lon goodnight mike
scotyl10 Had a birthday 2 days ago 57
Zoe Goodnight Everyone
Al Lee scoty, I rode a taxy under the “el” a few years ago in Astoria and noticed that the Italian girls looked the same as when I was young. The ones I remember were their GRANDMOTHERS!
santo nite al, have to nap—i am a old man now
Al Lee scoty, we lived that at the same time then. My brother is 60 and lived there longer than I did.
Al Lee Goodnight, santo
scotyl10 I went over the triboughbridge the other day and was remined of my youth
Al Lee scoty, the Queensborough bridge reminds me. It used to smell like Silvercup bread!
Al Lee Well, I need to go now, too.
Al Lee was real fun.
Al Lee Goodnight
Lon See you next week, Al.
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