Chat Transcript – June 16, 2008
Posted on June 22, 2008
santo hi Roger
Roger Dawson Hi Al and Santo
Al Lee So, you spent the $1200 wisely. 
Al Lee Hi ROger. how are you?
santo Al, yes
Roger Dawson Great Al. Hot day in CA today. 92 I think.
Al Lee I think we hit 100 F here today. HOT!
Al Lee I have been going to the pool at oru country club and look like I live in Florida now. Tan!
Roger Dawson Mike should be with us soon. He’s been buying the other half of Asheville that he doesn’t already own.
Roger Dawson Do you Texans take your boots off when you sit at the pool?
Al Lee I hear Asheville is a really nice town. I have to go there some time.
santo Roger, he makes me green with envy
Al Lee Naq! We have water boots for that.
Roger Dawson It is a great town.
Mike_Summey Hi everyone.
Roger Dawson Hi zert and sparky
Al Lee e woudl look funny with our hats and o boots, don;t you think?
sparky37 Hello All
Al Lee o boots
Al Lee no boots
zert Hi Mike, Roger, Al and everyone
santo hi, mike
Al Lee Keyboard issues tonight!
Al Lee Hi Mike.
Roger Dawson Gerrmany had U boots in the war
Al Lee Jawohl!
Mike_Summey I just came in from riding the trails in my woods. I had them all cleaned out today with a small bulldozer.
sparky37 I just came in from a terrential downpour!
Mike_Summey Hi Ken
Ken Hey guys and gals
Roger Dawson Mike has a shooting range on his estate. He damn near scared me to death with some of the guns he’s got.
Mike_Summey What’s everyone interested in tonight?
Roger Dawson Making money
Ken Mike Motivation……
santo mike, more houses
Ken I’m so lazy lately
Mike_Summey It doesn’t take much to scare Roger. He said the same thing about me taking him for an airplane ride a few years back.
Al Lee Mike, in your plane I would be more scared of the fuel bill.
Mike_Summey Ken, the only way I’ve ever found to motivate myself is to get started doing something. One thing usually leads to another and another.
Ken Does anyone use a Treo or smart phone
Roger Dawson We started same sex marriages in CA today, if anyone’s interested.
Ken Mike your right. I just keep putting things off.
Mike_Summey Ken, I don’t know what that is. I guess I’m old fashioned.
Ken Roger Nah
sparky37 Mike, how do you find and target an area? i.e. my part of state is too expensive but in PA 200 miles away house are cheap
santo Al, my wife said, don’t forget you have yor monday night blabfest
sparky37 but I know nothing about area
Al Lee When I want to do something and do not feel the energy to do it, I force myself to do one little thing to start the ball rolling. Then I suddenly get the energy and follow through.
Roger Dawson Hi Penny
Ken Mike its a phone that is a PDA. I carry a notbook around for my To Do list. These phones I guess will also be the notebook
Al Lee santo, you done real good with that dinner and check.
Penny Hello Roger, Mike, and all.
Ken Sparky what part of PA. That is were I live.
sparky37 Wilkes Barre
Mike_Summey sparky, if the area near where you live is not good, find another area as close as possible. Then start riding and learning it. I like to keep properties grouped within a relatively small area so I can maximize my time when I visit them.
santo Al, I said don’t worry your tenants are paying
Mike_Summey Hi Penny
Al Lee I am going to give my wife the new iPhone. It seems to have everything you coudl want or imagine built into it.
Roger Dawson Sparky, I don’t think you have to go 200 miles to find modestly priced houses that would make good rentals. The blue collar people must live somewhere closer.
Ken Al did you see that crazy table microsoft made? it’s like the Iphone but wayyyyy bigger
santo roger, in my case 400 miles
Al Lee Ken, no, I didn;t
sparky37 Roger, I am in Northern NJ 15 miles from NYC and the surrounding areas are still priced high
Ken AL to much to explain but it just blows the mind away
Mike_Summey I have trouble with my simple cell phone. I don’t know how all the fancy gadgets work nor do I care. As long as I can make a call, that’s all I need.
Mike_Summey sparky, I just read where NJ now ranks 3rd in foreclosures. there must me deals there.
Al Lee Mike, I have gotten used to text messaging also. That is really nice when talking on the phoen would be impractical. It is like email, sort of.
santo mike did you look at those row of houses you mentioned last chat
Al Lee I also take photos of the hosues we are building with my phone and send them to my computer by email so I can post them to the website. Very handy!
sparky37 Mike that is mostly in Trenton areas which too be kind, you don’t want to got there in daytime let alone nightime
Mike_Summey santo, not yet. I had problems last week after the chat. My mother had surgery and I had a bad lightening strike here that knocked out several pieces of equipment including my telephones.
Mike_Summey Al, my phone has a camera, but I’ve never taken a picture with it.
santo mike, hope it all works out
Ken I was just looking for something to do away with the notebook i carry around.
Ken Those phones are a little to costly for me.
Al Lee Mike, fly here to ADS, pick me up, fly us back to Asheville so I can see the town–and I will show you what you are missing with that phone. The camera is a GREAT addition to the phone.
Mike_Summey I serve on the Environmental Advisory Board here and they have asked me to do a live demo of the Offer Generator at this week’s meeting. They are all big into the affordable housing debate, so I think they will be shocked when they see the value of what they consider affordable when you try to rent it.
Mike_Summey Al, you buy the gas & I will.
Ken Mike define affordable houseing
Al Lee Mike, I’ll start saving up for that “gas”, it is really diesel, isn’t it? OR Jet A?
Al Lee kerosene
Mike_Summey Ken, to me affordable housing is housing that you can rent for a reasonable rent and get a decent rate of return on your investment.
Mike_Summey Al, it uses Jet A
santo mike, when you said you bought a house for $95,000 cash and closed in 1 or 2 days–then you said you got a term loan from the bank, did you get all of your money back—and is it like putting a mortgage on it
Ken Mike ok I thought it was something to do with the government
Mike_Summey santo, I bought two houses in the mid $90s and was able to obtain a mortgage for $110,000 on each one the next month after I closed. The NOI will easily carry the debt service and I got to put some cash in my pocket.
Mike_Summey Wonder where everyone is tonight?
Ken Farming 
Mike_Summey I think things are slowing down during the summer months. People are on vacations and it is staying daylight until after 9:00.
Roger Dawson The reason that Mike can get all of his money back is that what you pay for a property has absolutely nothing to do with the value of the property. If you pay $160K cash for a house that is worth $200K you’re not going to have any trouble borrowing $160K on it.
Mike_Summey Roger, you are correct.
santo mike, maybe i can do that when I am not a rookie anymore
Mike_Summey The secret is buying right.
Al Lee if santo is a rookie, he is also MVP for the year.
Al Lee You make your money when you buy it!
Ken Yeah I agree AL
Mike_Summey When you buy wholesale you can usually finance 100% of the purchase, but if you pay market value you’re going to have to put up a sizeable down payment.
santo Al, when I have 50 units—I only have 14 now
zert Mike – how does closing costs and legal fees fit into your scenario ?
Mike_Summey zert, I treat those the same as I would a down payment or repair costs. I expect to get a reasonable return on any cash I put into a deal no matter what it is spent on.
santo Al, by calling myself a rookie–It pushes me toward my goal of 50 units
Ken How many days a year do you guys expect a house to be vacant?
Al Lee santo, I have no doubts you will get there.
Mike_Summey santo, I have no doubt you will reach that goal and much more. You seem to be doing all the right things.
Mike_Summey Ken, that varies market by market and also is a reflection of the conditions in each market.
santo mike, thanks, I think I have been very lucky
Al Lee the difference betseen santo and so many other people is that santo learned enought to ge3t started and then he GOT STARTED. Too many peopel think they have to knw everything about real estate before they can buy something. If I believed that I would still not have my first property.
Al Lee betseen
zert One of my goals is to follow Santo’s pace
Al Lee between
Mike_Summey Ken in some areas 2-5% is a reasonable vacancy factor, but there are others where vacancy can run 20-30%. Also the more expensive a property is the higher the vacancy factor will be.
Al Lee Mike, how did Rocco and Tiger do today?
sparky37 Tiger won in sudden death
Al Lee He’s hard to beat.
zert I sent a very conservative goal of 5 properties in my first 3 years. August will mark my 2nd year and I already own 5 SFH
sparky37 91 holes
Mike_Summey Al, they played 18 holes and were still tied. Tiger birdied the last hole to put it into sudden death play and he won on the first extra hole.
sparky37 zert, what part of country?
Al Lee Tiger is the Mike Summey of golf. 
zert WNY
sparky37 Western NY?
Al Lee zert, that is terrific!
santo Al, a lot of people i speak to want to do what i am doing now–I must have given my brokers number to 15 people
Ken Zert do you get snow
Mike_Summey I just bought 14 houses and only have about a third of them rented so far. I will probably slow down a bit until I get them all online and bringing in some cash.
Al Lee santo, don’b breed yoru own competitors. :{
santo sparky, where is western ny
Al Lee don’t
zert Thanks Al – If it weren’t for people on this Chat helping me, I still would be kicking the tires
sparky37 don’t know
sparky37 zert said WNY
Ken ?
santo Al, they did not follow through
zert WNY = Western New York yes and we do get snow, not today though !!!
Al Lee I have had people come to my seminars for the third time and they still did not buy a single thing. I asked them why. They said they wanted to be sure they did not miss anything. I tell them they knwo more after hearing me talk for 3 hours than I knew when I started.
Mike_Summey Those of you who are regulars in the chat know that we see people come and go without ever doing anything. It’s a shame that they can get so enthused one week and then lose their enthusiasm with the first rejected offer.
Al Lee Even Mike once confided in me that he might not yet know everything there is to konw about real estate–but he is doing OK with it.
zert Al – I started out like those people, finally I just purchased one. I’m sure I made mistakes, left money on the table and a bunch of different things, but I did it. I learned from it and the second was a little easier and so on
Mike_Summey I had a local guy who bought all of our books, audio program and Offer Generator a few months ago, but when I saw him over the weekend and asked how he was doing, he said he had tried it but it didn’t work. He said he had made three offer and not one of them was accepted.
Al Lee zert, I have yet to make a perfect deal. The thing is I do not put of doing something until I think it is perfect. It just has to be good, not great, not perfect.
Al Lee A bunch of good deals will make you rich.
zert That’s true Al – Thanks
Mike_Summey I can’t understand why people think everything has to be easy. If it was too easy everyone would be doing it and there would be no opportunities for those of us with a little persistence.
Roger Dawson I think that too many new investors are focussed on no money down deals. Leverage is a good aspect of real estate investing but it’s not everything. If you put 50% down on a property and just held onto it, it would show a fantastic return.
Ken Al just the idea of having 3 properties for retirement is a nice idea
Mike_Summey Good point Roger. I think people have been misled by all the no-money-down get-rich-quick schemes that have been advertised on TV for years.
santo Al, a famous fighter, who fought from 1940 to 1965–Sugar Ray Robinson, knew the value of real estate–in 1948 he bought 3 50 unit apartment buildings for cash, because he knew when his career was over, he would have a nice cash flow–smart man.
Ken Mike when you refinance your properties after paying all cash for them what type of closing cost to you usually get hit with
zert I’m letting my reserves build back up after my last purchase and then I will begin looking again
Al Lee santo, smart indeed. I have had a few friends who were pro athletes and had made a ton of money. None of them has any today.
Al Lee It isn;t how much you make, it is how much sticks to you.
Mike_Summey Ken, I usually willhave to pay attorney fees to prepare the documents and provide the bank with title insurance. sometimes there will be a small fee from the banks. Usually the closing costs are not nearly as high as you have with a conventional loan closing. The one disadvantage to paying cash and then financing soon afterward is that you have two closing costs. One for the purchase and another for the financing.
Al Lee zert, that is smart. You can fail by being too careless or too cautious.
Mike_Summey I try to maintain cash reserves of between 3-6 months of the total cost I have each month. That means the more properties I acquire the larger the reserves need to be,
zert Al, I try to follow the ‘slow and steady’ approach. Eventually I will get there
Al Lee Roger, please let someone else get a word in here. Don’t hog the bandwidth.
santo Al, I blong to the veteran boxers association, and we help boxers who are not doing to well today–one man made 5 million in the ring, and we pay his rent–another, was the middlewt champ 5 times–made 5 million also, we buy his monthly medicine–
Al Lee zert, the subtitle of my book is “How the Tortoise Got RIch”.
Mike_Summey With one property that has expenses and mortgage payments totalling $1,000 per month, $3,000 to $6,000 is adequate reserves. If you have a hundred of them your reserves need to be $300,000 to $600,000.
zert Mike, is that Debt pymt, expected vacancy, tax, ins, maintenance, and prop mgmt fees?
vtor hi leigh
santo hi vtor
Al Lee santo, I am friends with Marques Haynes, the famous Harlem Globetrotter. His is not broke, but he does not have the money he ought to have. He is an icon amont basketball people.
vtor what up
zert Mike, those numbers sure add up huh ?
Mike_Summey zert, debt service, maint reserves, taxes & insurance. No need to reserve for vacancy or property management as these are not cash outlays if the unit is vacant.
santo Al, vtor is my broker and my property manager
vtor You telling these guys what a great investor you are
Mike_Summey Hi vtor
vtor Hi Mike
Al Lee Hi, vtor. Santo speaks well of you.
santo vtor, they know already
Mike_Summey vtor, santo has been bragging about you for months.
vtor I hope so I try and work hard for everyone
vtor LOl, I rule our properties with an iron hand
Mike_Summey vtor, you may find some more investors in these chats.
santo Mike vtor handles about 78 units–pm
vtor Thats is always a good thing”
Mike_Summey vtor, we have a very light turnout tonight. Probably due to vacations & the weather.
vtor We are up about 145 now leigh
sparky37 Santo is it okay to get vtor;s info?
santo vtor, wow that went up fast
vtor Yeah I meet this guy from NY he has many properties so I manage all of his
santo sparky, just ask him
sparky37 thanks santo
Mike_Summey vtor, if you want to give out your email address and any other contact information, it will be posted to the website along with the rest of this chat transcript tomorrow.
Al Lee vtor, do you own some properties in Buffalo yoru self?
vtor Yes about 22 units
Mike_Summey I’ll be right back. Need to step away for a min.
vtor www.tortorapropertymanagement.com
santo vtor, your leaving me in the dust
vtor no i just sold one so i have two left
vtor two less
Al Lee santo, you are not in a race with vtor, you are in a rac ewith poverty and mediocrity. You are winning!
santo vtor, how did that apraisal go on 244 vermont
santo Al, your right
vtor lee is doing a great job and its not a race I just happen to be a bit crazy and bought two buildings that need alot of work cause i got them cheap
vtor Good except it took the tenants a while to answer the door cause they were sleeping instead of working
Mike_Summey santo, one of my cardinal rule of life is to never worry about what others are doing. Just be better tomorrow than you are today and you will be successful.
santo mike, I won’t forget that
vtor Great answee Mike
vtor answer
vtor Mike Leigh is awsome and the best investor i know
Mike_Summey Al, I didn’t see you volunteering to buy the fuel for me to come get you!
santo vtor, all my tenants sleep a lot
Al Lee I was checing the fuel prices. What is Ja A these days? How many GPH do you burn?
vtor Well Leigh I hate to say that why you get alot of goverment checks
vtor LOL
Al Lee Jet A
Mike_Summey Asheville to Dallas and back…probably $4,000 – $4,500.
Al Lee OK, I’ll call you , don;t call me :p
vtor Well my truck gets 8 miles per gallon guys
santo vtor, hoo-ray for the govt.
Mike_Summey Al, at current fuel prices, it’s about $11 per minute.
Ken Mike I could afford about 20 mins, what happens after that?
santo Al, my 1941 olds get 13 miles to the gal.
Mike_Summey Needless to say, I haven’t been flying a lot recently although I do have to fly to SC later this week.
Al Lee santo, that is not too bad. I age 12 MPG in my Expedition.
vtor Thats also pretty bad Leigh but your car is older that me so thats pretty good for the old gal
vtor So does everyone own property here
Roger Dawson I was talking to a power boat owner at my yacht on Friday. He told me it would cost him $1000 in fuel to go to San Diego and back. That’s only 120 miles away.
Al Lee I have 4WD, the extra long body, 35-gal. fuel tank, etc. I can be pretty expensive to fill up.
Mike_Summey vtor, how is the market in Buffalo? From what Santo says it sounds like there are some fantastic deals there. Why?
santo vtor, I think everybody does
vtor For residental properties pretty much sucks if your an investor no place better for deals
Mike_Summey vtor, why are sales so weak there?
Al Lee Roger, I hear the Schwarzinator is thinkg of ways to tax wind. Then you won’t be so smug, will you?
santo mike, no work
Mike_Summey vtor, what market conditions are holding prices down?
vtor It seems to me we have a depressed area to start and with the banking industry the way it is just add’s to it
Mike_Summey santo, they can shovel snow for about 10 months of the year.
Ken VTOR did NAFTA hit your area hard? I live on the outside of the rust belt. my area has been in a steady decline for about 35 years
vtor Yes excepts in the areas investors like those prices are stable
vtor I think so
vtor You can get a solid two unit here for around 40k
zert Mike, it’s only 7 months Oct-Apr
Mike_Summey Ken, have you noticed how NAFTA has seemed to hit unionized industires the hardest?
vtor just sold a great 14 unit for 180k
santo mike, the days it does’nt snoe, it rains
Ken Yes, Mike
Al Lee Mike, and Unionized companies like GM.
Ken it’s a shame
vtor Leigh, Sarah say HI
Ken i hear Pittsburgh is on the verge of bankrugpcy spelling
santo vtor, tell her hi also
vtor I will
Ken the area I live in have been labeled by the Government as economically depressed for the last 15 years no end is sight
Al Lee Ok, everyone. Kepep watching http://www.buyrenthouse.net/RavenviewPhotos/ for the status of the project we are doingt here. We hope to start closing onthe purchases next week.
Mike_Summey Years ago, my dad used to say he couldn’t understand how Detroit could pay union workers $50 and hour to make cars to sell to people making $5 an hour.
Al Lee I need to run now and tend to family stuff.
Al Lee goodnight, all
Mike_Summey Goodnight Al
vtor Very true mike I know a janitor at the Gm plant he is pulling in over 85k a year
Ken Mike your right, now Toyota pays them $28 I hear
Ken Ford can’t compete with that
vtor Mike you run this web site
Mike_Summey I think unions started out with good intentions, but they put greed ahead of the health of their companies and now they are paying for it.
santo mike, I can’t complain about unions—I collect two pensions from unions
Ken Mike your right. I work in union shops all the time. I am non union it get tough at times
Roger Dawson I need to run. See you next week.
Mike_Summey vtor, I try to keep up with things as much as possible, but I am not the webmaster.
Ken Santo if it wasn’t for the mining union my dad would be living in a card board box.
vtor I see but you write these books
Mike_Summey I’m going to have to sign off also. Other things to do before bed.
Ken night,
santo nite,mike
Mike_Summey vtor, join us again next week and we’ll continue the dialog. I have to run now.
vtor Bye Mike
santo vtor, on this site there are books
vtor I see
vtor Ok this chat is every week same time
santo I am going too—nite vtor–nite all
Ken vtor I bought mike and rogers book and didn’t read it for a year because of the color of the book. soon as I did read it I could not put it down and picked up my first property about 30 days later
vtor Very cool ken
vtor Goodnight Leigh
santo vtor every mon. night 8:00 pm
vtor See next week Leigh
santo nite vtor
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