Chat Transcript - November 10, 2008
Posted on November 11, 2008
ong3232 I am a property investor in UK. I would like to buy a property in New York City, New Jersey and Los Angeles. possibly in Hawaii too. I may need your help. my email is ong3232@gmail.com. sorry I cannot stay to chat, for it is 1240am in UK.
Mike_Summey Hi onq
Mike_Summey You’re a few minutes early.
Mike_Summey onq, do you have a question before everyone else gets in the chat.
Roger Dawson Hi Mike and Ong!
Mike_Summey Hi Roger, onq isn’t talking right now.
Mike_Summey Hi Carleton
Carleton_Sheets Hello Mike, Roger and all!
Mike_Summey Things are starting slow tonight. Wonder where everyone is.
Carleton_Sheets Hello ong. Where do you live?
Roger Dawson Hi Carleton. Thanks for stopping by.
Mike_Summey onq, you can respond by typing in the message area at the bottom of the screen and hitting enter or the send button.
Carleton_Sheets My guess Mike, is that sadly, they are not out buying real estate or…they’ve had enough of that Sheets’ guy
Mike_Summey Hi shidokan
shidokan hello
Roger Dawson Hi shidokan
Carleton_Sheets Hello Shidokan. From where?
shidokan i am from chicago
Mike_Summey I’ve been amazed at how the number of people in the chat has dwindled as the market has cooled. Now is by far the best time I’ve seen in my lifetime to buy investment properties.
Carleton_Sheets What part?
Mike_Summey Hi mayorad
Carleton_Sheets Hello Mayorad!
shidokan south side i am a truck driver looking to get in buying rentals
mayorad Good evening, you two. Nice to see you in the chat room again, Carleton.
Carleton_Sheets Thanks!
Mike_Summey I received an email today from a builder who knows of 20 houses in the Atlantaarea that were selling at $300,000 and he said they could now be bought for about $50,000 ea.
Roger Dawson Here in California real estate sales are back up, with over half of the sales foreclosures or bank owned. Prices are down 30 % in most areas from last year, although that depends very much on the area. In desirable areas like the beaches, prices have not dropped.
shidokan whats is the best way to start since i don not have the capital and the banks not lending much
Mike_Summey I read today where Greenspan thinks real estate still has another 5-10% to drop before it stabalizes.
Mike_Summey Hi Penny
Roger Dawson Hi Penny
Penny Hi Mike
Carleton_Sheets Shidokan, turn that desire into a goal and the goal into action. You can indeed buy some rental property. Just a few hours a week on weekends to educate yourself about the market place, then use the techniques Mike and Roger and I teach.
Carleton_Sheets Hello Penny!!!!
Penny Hello Roger, Carleton, and everyone
Penny 
Mike_Summey shidokan, in your position, you will probably need to find sellers that have large equities in their properties and get them to finance a substantial portion of the purchase. Get a bank loan for 20-40% and get the seller to carry the balance.
shidokan its crazy how everybody that was into flipping properties and rehabbing but the people who purchase rentals are doing ok
Carleton_Sheets 10% down would put the median price at approximatly $170,000 in this country…down from nearly $230,000 severa years ago. But, when I started investing, the median price of a single family home was about $55,000 (1970)
Mike_Summey It is easy to get bank financing when the seller has a second that is larger than their first. That basically gives the bank two people to guarantee that they get paid back. I use this technique to buy no money down deals.
Mike_Summey shidokan, that’s the difference between speculating and investing. If you have to sell to make a profit, you are a speculator, not an investor.
shidokan even if you credit is not that good and have no cash in this enviroment not trying to sound negative
Carleton_Sheets So many ways around that Shidokan. Try lease options. Or what about getting ten truck drivers who would love to own property to put in $1,000 each?
Roger Dawson Mike, it’s interesting that Warren Buffett feels the same way that you do. He buys companies at the right price and hangs onto to them, rarely selling.
Mike_Summey shidokan, if you have poor credit and no money, you definitely will have more problems than someone with good credit and cash reserves, but that’s no reason not to try.
Mike_Summey shidokan, when I started, I was in the same position you are in. I made offer for a year before I finally got one accepted.
Mike_Summey Carleton, why don’t you tell him how you started.
shidokan would it be better using a realtor, knocking on doors to find motivated sellers
Mike_Summey shidokan, use any method you can think of. There is no set way to find properties. Also, you never know what someone will do until you put a written offer in front of them.
Mike_Summey It’s amazing how people think. When real estate is booming and prices are sky high, everyone wants to get in on the act. When the stock market is booming everyone rushes to buy stocks. However when prices fall in both markets and fantistic deals are to be had, everyone runs away. No wonder there are so many broke and in debt people in this country.
Carleton_Sheets Shidokan, try to get as much education about the market place as you can. read Mike’s and Roger’s books or go to my website www.carletonsheets.com where my entilre course that use to sell for $295 is on line…now FREE! Then go into your local market after you have chosen where you want to buy, and get to know it. then make 25 offers without ever thilnking you’ll get one accepted. Use the techniques we teach. You’ll be amazed at how much you will learn and you’ll probably will buy a property. But remember as Mike says, the financialanalysis is so important. Every property has got to support itself. (WHEW!)
shidokan its kind of crazy that all of a sudden i got remotivated in being in realestate after playing monoply and betting a few friends i had mortgage all there properties and put hotels and houses on them
Mike_Summey Hi pt & david
pt hello
Carleton_Sheets Shidokan….LOL
Mike_Summey shidokan, Carleton is right. Make Offers! Make ones that will work for you and don’t worry about insulting the sellers. I’ve never lost money on a property I didn’t buy, but I’ve learned a lot from the responses I’ve gotten when I’ve made offers.
Carleton_Sheets Hello PT
Mike_Summey shidokan, I tell people all the time that investing in real estate is like playing Monopoly for keeps.
Carleton_Sheets …and David
shidokan i think thats my problem over analyzing and not doing anything like most people who want to get into any business
Carleton_Sheets That’s fear, Shidokan
Mike_Summey The flaw I see in most people is that they do not have patience. They want to turn big profits quickly, but as the saying goes, “easy come, easy go.” Building wealth with real estate is a slow and methodical process.
Carleton_Sheets Amen
Carleton_Sheets …although it get’s easier with experience.
Carleton_Sheets PT where are you from?
Mike_Summey I lived on the salary from my job for the first 20 years I was investing in real estate. I left the money in and used the excess cash flow to buy more properties. Eventually, the income from my properties surpassed the income from my job and that’s when I quit work.
pt sorry I won’t be able to stay long in the chat. I’m just here to let everyone know that the guaranteed rent program offered by Al Lee is a total fraud. I met Al through this chat and got into his program. I hope any newbie out there who’s thinking of investing out of state should be careful about those guaranteed rent program.
Mike_Summey Hi Rocky
pt I contacted other owners of properties offered by Al and they’re all inthe same situration as me. Al lured many new investors into his guaranteed rent program. As soon as escrow was closed, he never paid us and blamed on the long process of getting tenants. He wanted to cancelled the contract at our expenses.
Mike_Summey pt, what happened?
shidokan wow
Roger Dawson The FHA has some great programs for first time buyers. You could buy a fourlplex (4 unit apartment building) for very little down as long as you lived in one of the units.
Mike_Summey Hi erskine
ROCKYDIDONNA [b][/b]hi sorry i’m late
pt he never paid us even though the contract said he will starting the month after close of escrow
Roger Dawson Hi Erskine and Rocky!
shidokan i will check into that roger
Carleton_Sheets I’m so sorry to hear that, PT.
pt we live in San Jose where investing is close to impossible so we looked into out of state investment
pt Al Lee’s program sounded great and we thought we did our homework of flying out there to see the site and to meet him
Mike_Summey pt, I thought he was selling the properties and had a property management firm to rent them. I wasn’t aware of any guaranteed rent program.
erskine214 hello everyone!
Mike_Summey erskine, where are you from?
ROCKYDIDONNA what do you think of debt resolution
erskine214 spartanburg
pt yes, so his guaranteed rent program says that regardless of vacancies, he’ll pay us on an agreed rent amount every month for 1 or 2 years depending on the contract
Mike_Summey erskine, I thought so. Glad you joined us.
Mike_Summey pt, that is interesting. I wasn’t aware of that.
Carleton_Sheets …nor i, pt
pt he hires prop mgt but didn’t pay us for 2 months. After many emails and phoen calls, he suddenly sent out email saying that he ran out of fun and would terminate the guaranteed rent contract immediately
Carleton_Sheets PT, funds???
pt funds…(sorry)
ROCKYDIDONNA how is the housing market in the carolina’s?
pt he wanted to cancel contract due to his own funding problem, yet he makes us pay all the expenses like leasing fees etc that are between him and the prop. mgt company
Mike_Summey I spoke to Al last week and I know the property management firm and builder he was using filed bankruptcy. He said he has tried to take over their roles, but that’s about all I know. I kidded him about us not having the debate over whether or not it is good to have a lot of equity in properties. I think he now sees why I like to have equity.
Mike_Summey Hi Rolyn
RolynProperties I’m here Yippie!!!
RolynProperties Mike
RolynProperties I thank yo
RolynProperties You
Mike_Summey Rocky, where are you? The sales market here is like much of the rest of the country…down and still declining. That’s good for me.
pt I spoke to other owners and they had the same problem w/ Al. They all want to sue him but the fact that Al can take advantage of us is b/c we’re out of state
RolynProperties Hey Roger I have to ask you….
RolynProperties Last week you predicted an Obama landslide, How did you know?
Mike_Summey pt, that’s too bad. I don’t know much about Al’s situation other than he used to join us in the chat regularly.
Roger Dawson Rocky, Mike can answer your question about the Carlinas better than me, but I have a friend who bought four brand new rental houses and a home over the border in Jacksonville, Florida. He’s having problems finding tenants who can afford the rents that he needs to cash flow.
Roger Dawson I think that Obama won because people are really angry over the Bush presidency. Any Democrat except John Edwards could have won.
Mike_Summey Roger, he should have read our book. You don’t look for tenants who can afford to pay enough rent to make a deal cash flow, you look for a deal that will cash flow with the market rents.
pt Mike, sorry for using the chat to inform everyone to be careful about those programs from Al. I just hate to see other newbies like me get into the same thing
RolynProperties lol@John Edwards
Mike_Summey No problem pt.
Carleton_Sheets Roger, that friend was sure not Mike. He or she obviously didn’t know the rental market.
Roger Dawson Mike, he felt good about buying new homes, but they are tough to cash flow in the best of times.
Mike_Summey pt, I only wish Al was here to respond to your complaints.
RolynProperties So you think that his campaigning had nothing to do with it? Obama spent a lot of money.
Carleton_Sheets The homes in Atlanta that Mike mentioned Roger, would cash flow based on what I know about the market.
pt he refused to talk to us now. He told us to get an attorney and we want to communicate anythingn to him
Roger Dawson He had also moved from San Diego so everything in Florida looked like a bargain to him.
Carleton_Sheets Good point, Roger. And a lesson to us all.
Mike_Summey Roger, even with the sever drop in prices, most of the new homes won’t cash flow. I have always started with the rent I felt a property would bring and backed into the price I wanted to offer. It has served me well for many years.
pt we disagreed to his attempt to cancel the guaranteed rent contract, so now he’s still stuck w/ it, but we’re not getting paid either. If he explained his situation nicely from the beginning and cancelingn the contract w/o making us pay for his mistake then we would have agreed to it
Carleton_Sheets Not to souond too religious Mike but Amen a second time.
Mike_Summey Using that formula, in all the years I’ve been investing, I’ve never had a property that lost money.
Mike_Summey By staying true to basic investing principles, I’ve found it difficult to buy when the sales market is booming and more deals that I could purchase during times like this.
RolynProperties Hey Carleton, I’ve studied your courses and books. Maybe I have overlooked it but what is next for you? Are you coming out with another course/book?
Roger Dawson Mike, did you reach a deal with that builder in S. C.?
Mike_Summey Roger, I spoke with him today. He is trying to get his bank to go along with my offer. He said he feels sure they will, but it may take a few days to get it worked out.
Mike_Summey Hi Mark, long time no see.
Mike_Summey Hi Rod
Rod hi Mike
RolynProperties (A question anybosy can answer) How do you get your economic news? and how do you separate it from the doom and gloom the media always portrays?
MarkCT Hi Mike. Actually got the kids to bed early tonight.
Mike_Summey Is this Rod from TX
Mike_Summey Good for you Mark.
Rod No, Rod from NY. haven’t been on in a while.
Mike_Summey Mark, how are things going with yo?
Mike_Summey Hi trico
Mike_Summey Rod, any questions?
MarkCT Work related or Real Estate related?
Mike_Summey Mark, real estae, of course.
Mike_Summey Mark, how are the properties doing?
MarkCT Real Estate related everything is going pretty well. I’m 100% rented and have raised the rents on a few of my properties.
Carleton_Sheets Rolyn, just rying to offer my courses (yes, all of them) free as kind of a pay-back. Anyone can go to my web site www.carletonsheets.com and access my courses at no charge. I’m helping my marketing company promote that fact and am getting some wonderful feedback…a great reward at my advancing age. Oh, and it shouldn’ surprise you that I have bought 9 properties in the last 10 months. Not a lot but still going at it after 38 years!~
MarkCT In these times with the market going to pot it is nice getting rent checks in the mail.
ROCKYDIDONNA Carleton I want to thank you very much. I asked my bank to discount the my loan and they did $135,000 down to $10,000. I learned it from your course that even bank will discount thanks again.
Mike_Summey That’s great Mark. I’ve been able to raise rents more since May than I did over the two previous years.
Rod I haven’t tested the banks recently… is it really much harder to get a loan for a “second home” these days?
MarkCT I haven’t had a vacancy go more than a couple of weeks since June.
Mike_Summey Mark, it is only going to get better and you will find some great deals to buy over the next few months.
Mike_Summey Hi hawkeye
hawkeye775 Hi Mike, Everyone
Carleton_Sheets Rocky, that’s GREAT!!!
hawkeye775 Miss anything interesting?
trico Hi, just saw where to type.
MarkCT Deals are there. I’m getting Emails from my property managers all the time. Just don’t have the funds to jump in right now. Its a shame because the deals are amazing. I own a couple of units in Austin TX and haven’t seen anything that would cash flow for two years. Now there are a plethora to choose from.
hawkeye775 Mike, finished the FAQ book today. Good book. Filled in alot of questions.
Mike_Summey I have two guests from Experion, the credit reporting company, that will be joining us in December. It should be really interesting to hear what they have to say about how credit is affecting buying.
ROCKYDIDONNA then I tried with my credit cards and saved of $70,000 thanks again Carleton
Mike_Summey hawkeye, I assume you read the real estate book first. The FAQ book is a companion to it.
MarkCT I know you own some properties in Florida Carleton. How are they fairing?
Mike_Summey Hi Lon
Lon Hi Mike
Lon Hi Roger
Mike_Summey Rocky, you saved $70,000 on your credit card debt???
Roger Dawson Hi Lon!
Lon Hey, you are awake.
hawkeye775 Yes. The real estate book, I’ve read a couple of times. My mother gave it to me for Christmas about 4 or 5 years ago. It was what got me interested in investing. She reads and cuts out your articles every week in the Ashevile Citizen Times.
Rod Carelton, “free” is music to my ears. I’m going to head over to your site and register as soon as we are done here.
Mike_Summey hawkeye, does she send the articles to you?
Carleton_Sheets Mark, I have about 100 units her and the market where I am is lousy. I’m running about 75% occupancy and am thinking about a new management company altho I’m not sure they would do any better. I live in Martin County and it is the wealthiest county in FL and unfortunately the labor market is bad here andthus the occupancy rate. PS Tiger lives in my county
hawkeye775 I finished the Mindset book about 2 months ago. She gives them to me sometimes or to my nephews.
Roger Dawson I’ve know Carleton for 25 years and strongly endorse his training materials and methods.
ROCKYDIDONNA Yes Mike and had Discover card went form 25% down to under 1% on $40,000
Mike_Summey Rocky, are you aware that the discounted debt is treated as income by the IRS. You may have to pay tax on it.
Carleton_Sheets Thanks, Roger. Very kind.
MarkCT Carelton I would think that a bad labor market would mean less home buyers and more renters or are they going to other towns to find cheaper rentals?
Rod Yeah, good question… the “for rent” signs are growing around me too… are all the renters buying now?
hawkeye775 I may have missed out on a deal, because I didn’t jump in and make an offer. It was a foreclosure that I looked at about 6 weeks ago. The numbers were close, but not where they needed to be for asking price. They dropped the price 5k last week. I was working with the agent to get an offer in, when I found out they accepted one on Saturday. Hopefully, it stings enough that I don’t at least get my name in the hat next time.
Carleton_Sheets Mark, they have just left the area. After the hurricanes, the market was great, Don’t wish one on me but I do wish the rental market was better.
Mike_Summey Mark, some markets are so overbuilt that it is creating larage vacany rates and declining rents. Several markets in Florida are in that position. There are markets in Florida that may not recover for 10-15 years.
ROCKYDIDONNA yes I spoke with my accounted before I did it. he said to put about $5k aside just in case.
Mike_Summey hawkeye, don’t get over anxious on the next deal. Stick with common sense investing principles. As I said earlier, I’ve never lost money on a property I didn’t buy.
Lon Hawkeye, there will be plenty of other deals, and if the numbers were close, it wasn’t a good enough deal in this market.
RolynProperties Martin County? I thought Tiger lived on Jupiter Island?
Carleton_Sheets What a nice evening every one. Do follow Mike’s and Roger’s (and my) advice to go out and invest. Best of luck to everyone. And to Rolyn, he does. But that’s Martin County.
hawkeye775 True, but I should have at least made an offer. Maybe they would have come to me when they decided to lower the price. It’s not the fact that I lost the property. I might not have gotten it for the NOI, I needed, but I should have at least given them an offer that would have worked for me.
MarkCT Carleton does this mean that you will have to lower you rental rates so that you can up you occupancy percentage (and possibly have a negative cash flow) or will you hold out waiting for your rates to be accepted? What is the less of two evils in your mind negative cash flow or vacant units?
Lon What is Carleton’s website, for those of ME that showed up late?
RolynProperties Got it!!
Mike_Summey We started a bit slow tonight, but finally had several people join us.
Penny goodnight all
Rod www.carletonsheets.com
Lon that’s too easy
Rod mike, roger… this is a great service… thanks. please keep it going.
MarkCT Mike what is your opinion of the question I posed to Carelton
Mike_Summey Mark, let me answer that. Vacancy is 100% negative cash flow.
Lon Mike, a vacancy doesn’t damage your unit.
Roger Dawson I’ll be away for two weeks. Next week I’m speaking in New York and the week after in Kuwait. I’ll be with you again on December 1st. Mike will be here as usual next Monday.
Lon 6 - 1/2 dozen
ROCKYDIDONNA Mike do you have section 8 in your area and what do you think about it?
MarkCT True but if you lock in a renter that causes negative cash flow for year you could miss out on a renter that might allow you to positively cash flow. How long do you wait it out?
Mike_Summey Rocky, I have a few Section 8 tenants, but I also have more problems with them than others.
ROCKYDIDONNA what kind of problems?
Lon I must be lucky, I have the greatest section 8 tenant, ever.
Mike_Summey Mark, I would consider putting in a month-to-month tenant that I could ask to leave or pay an increased rent if the market improved.
MarkCT I’ve had mixed experience with Section 8. Some have been good some have been nightmares.
Mike_Summey Mark, same here. I’ve had higher maintenance expense with Section 8 also.
Mike_Summey Everyone, I have to leave you until next week.
ROCKYDIDONNA I had problems with section 8 in the past but recently its been alot better. I’ve been kicked off the probgram 3 times
Mike_Summey GO OUT AND BUY SOMETHING THIS WEEK
MarkCT Same here. Problem is the Section 8 inspectors make you fix things that I might not normally address.
hawkeye775 Thanks Mike:)
Rod Thanks Mike.
Mike_Summey Goodnight all!
MarkCT Good night all.
mayorad Thanks, Mike - have a good one.
hawkeye775 Good night everyone
RolynProperties Good night Mike and thank you for your education
mayorad Good night, everyone.
ROCKYDIDONNA I almost knocked out a section 8 inspector for failing my unit because a screen wasn’t in the window
Lon That seems too picky. My unit has more than one window with no screen. It just needs to be habitable and safe.
Lon A missing screen has nothing to do with either one.
ROCKYDIDONNA he was a new inspector and I had a history with his brother a few years earlier and told hiim to talk to his brother about me and how i keep my unit so he passed it
Lon all about who you know.
ROCKYDIDONNA Thank you all for your help. talk to you all next week
Lon 2 weeks for me, I have a REIA meeting next Monday
Lon ciao
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