TalkCast 'o Doom Part II

Part II (acquired from Noble Transcription Services Blog)


CS: Looks like I’m back. I don’t know if I should continue. We do have a few people on here, still. The software crashed and I had to restart the whole thing. Hold on a second. I’m going to put myself on mute. One moment.
The call is still being recorded; the software’s still running, so I’m going to go ahead and take a few more.
We did have a few good questions coming in, so we’ll try with SanBerry. SanBerry, you there?
SanBerry (SB): Yes, I am.
CS: Hi. What’s your actual name and where are you from?
SB: Oh. My name is Sandra —
CS: Hi, Sandra.
SB: Hi. And I’m from California. I’ve been observing your blog. I might be one of the few supporters that you have, because I feel like you, as a young person, that you’ve done a lot for a young person.
CS: Thank you very much.
SB: You’ve made some mistakes, but we all make mistakes, and you’re still young enough to get better, or to get worse. It’s based upon what you want in life, and where you want to go. So, my question is: given everything that you’ve been through, what would you tell another young person starting out, how to start, or what they should do if they still want to get into this type of business.
CS: Sure. First of all, thank you very much for such positive words. It’s rare that I get to hear stuff like that. Let me go ahead with the answer. It would say to any young person, there’s nothing wrong with going out there and trying something. You’re going to fail, and if you’re afraid of failure, you’re never going to be successful. I know it sounds cliché, but if you ask anyone who’s successful how many times they failed, they probably failed a lot more and a lot bigger than anybody who hasn’t really achieved much in their life.
It may be a common sense answer, but a lot of people are just too afraid to try. Now, I would still say that, don’t just go out there and do what I did, which is — maybe I got a little too exuberant and too extreme with my business, going all over the country, buying properties, where I should have just focused on the local market and just done one deal at a time.
So I would just say, be careful; especially, be careful with leverage. Leverage is a beautiful thing. Up until recently, you’ve been able to get some amazing loans, and the loans are good if you use them correctly, but if you miscalculate, or do what you’re not supposed to do with your rehabs or your repairs, then you can get in trouble. So, don’t be afraid to try, but also do as much homework as you can.
And use mentors. That was probably my biggest problem, is that I didn’t have somebody to guide me through it. I’m a do-it-yourself kind of guy, and sometimes, that’s my weakness; I need, sometimes, to just follow until I get better.
SB: Do you think that there was probably some apprehension about doing your very first flip? Do you think that once you did it, that maybe, what happened is that it was so exciting to you, that you just decided, let me just do more?
CS: That’s a good point. Someone put it like this for me before: if you make money in your first deal, that’s a bad thing. You have to be afraid, because if you make money on your first deal, a lot of times — it might be beginners’ luck and you think you’re invincible at that point. Maybe I had some of that. I made a quick $30,000 on the first deal on Calloway. Sure, I had to get into a property, but what happened is, that other property was not such a good buy. I was acting out of desperation at that point, and at the same time, I thought, no problem, even though I’m buying it at more than I really should be buying it, as a wise investor, I thought, I’ll still find a way to resell it, because I was so excited about my first success.
SB: Yeah. The other reason I’ve been tuning in — and I’m not calling necessarily to advertise for my dad, but I’ve been working on his blog, and he is a realtor. He’s been in the business for over 50 years, and he’s in a small suburb outside of Detroit, Michigan. Right now, you’ve heard about Detroit and the subprime situation, and how houses there are cheaper than cars.
So my question to you is, is location everything, or do you think there is promise for people that want to invest in areas like that, where the economy is depressed. But there’s super-good deals, you know. I just wonder who would you expect to buy the homes in an economy like that, or if you have any insight as to whether you think location was key, or it’s not key; it just depends on your skill level in picking out the right type of property in a given place.
CS: Sure. Let me address that, and then I’m going to go to the next person, because everybody will jump on me for that. Let me just tell you from my limited experience. You can make money in an up market or a down market. For example, my local Rich Dad — he’s the father of my high school friend — I’ve been watching them make a lot of money in the last down market. I was talking to him, and what he said is, if you know how to buy right, which is — you have to buy cheap in a down market; really, really cheap — so that way, you can turn around, repair that thing, and put it back on the market at a very aggressive price. You can’t try to sell it for retail.
Basically, what I’m trying to say — you can make money in a down market; you just have to be very careful. Especially in a down market, you have to find yourself surrounded with mentors and work with people who have done it before. Don’t work with people who have only known how to make money in upswings. A lot of people are speculators. True, I was kind of being speculative myself on some of the deals.
Don’t give up. Even if your market’s in a correction right now, it’s a great time to get your skills ready, because you know what? Soon that correction’s going to reverse. Everything’s a cycle. Even if it comes down for a few more years, get yourself in position, surround yourself with money partners, and then you’ll be ready to snap up deals and wait until they start appreciating.
Even in a down market, you can make money as a wholesaler by simply finding deals for other investors. That’s a way to get started with no money down.
By the way, maybe your realtor connection there; maybe we can talk about some deals in Detroit. I haven’t looked at it very closely, but I heard there’s some sweet deals to be had out there.
SB: Oh, yeah; definitely, and in some really upscale, very nice neighborhoods. Recently, a guy got a house that was worth over $500,000 in one of the most prestigious neighborhoods to live in, in Michigan, and he got the house for like $120,000. Those are the kind of things that are happening there.
CS: Well, you know, if you’re going to do flipping in a down market, here’s the biggest thing. Buying is going to be easy. There’s tons of people giving houses away, including myself. You come to me; I’ll give you my houses away. Just take them over, or whatever; save me from foreclosure. So, buying is not going to be the hard part. Selling is the tough part. You have to get really good at selling your properties, and in a down market, you probably don’t want to buy anything that’s not a first-time-buyer home.
Even in a down market, first-time buyers are willing to buy, because they want to get into their first home. They’re not as sensitive, in terms of the market upswings and downswings. I have a friend right now who’s looking for a home, and he’s not too sensitive on if I get him a great deal or not, as long as he can get into a home, and I can help him find something and help him finance it, he’ll be happy to buy.
So, in a down market, I think the way to make money as a real estate flipper or fix-and-flip investor is you have to have a pool of buyers before you start doing your deals. Then you simply match up buyers to properties almost like an agent, but you’re actually acting as an investor. You find the right deal for them, and fix it up. You can even ask them what color carpet that want, and really have your buyer lined up, just like the builders do. They take a deposit before they build the home, and I think that’s a smart way to go as a real estate investor or fix-and-flip.
SB: Yeah, yeah. That was one of the suggestions that my father had, is that people don’t realize how important it is to work with an honest realtor. There are a lot of dishonest people in all stages of the business; mortgage lending —
CS: What’s your — you said that your uncle — or your dad — what’s his name, and what’s his website address? Nothing wrong with a little bit of a plug here.
SB: His name is Willie C. Williams, and his website is www.redcarpettimewillcooperate.com. We have a link to your blog.
CS: Great. Thanks for that, and thanks for calling in. Hopefully, that could be useful for somebody who wants to invest in some Detroit deals.
SB: Okay. All right. I’m wishing you much success. Like I said, you’re young. Don’t give up. You have plenty of room to grow, and I really think your attitude of wanting to share the triumphs as well as the low times in your life is the type of attitude that people have to have in order to build credibility. At some point, all of these people that are really down on you — you never know; things will turn around and they’ll see that you’ve grown a lot, and then they’ll want to listen to you, because they know what you were honest enough to tell them about your flaws; that you would be equally honest enough to try to inspire and help them. That’s my message to you.
CS: Thank you. I appreciate that message. That’s what I’ve been trying to do. I appreciate those kind words. I’m telling you — it’s very rare to get some kind words like this, publicly. I do get some encouraging e-mails, but it seems like — well, you know how it is. You’ve seen my comments. Thank you, Sandra.
BS: Okay. Thank you. Goodbye.
CS: Okay, we’ll just take a few more questions. Might as well keep going. We have some new people on. I might as well give them a shot.
It looks like the new people came off. We’ll give Steven another shot. Steven, are you still there?
SC2K2: Casey, I just gotta tell you –
CS: Am I doing any better, by the way, or it is still –
SC2K2: No, no. You’re doing horribly. You let me ramble on too long last time, which, you know, whatever, but –
CS: Well, I don’t like to cut people off. Do you like to be cut off?
SC2K2: No, but you gotta do it. It’s –
CS: I guess you have to do that in radio.
SC2K2: — a radio show. You have to get the question, get in, and get out; but, I’m so — I just can’t handle how brainwashed you’ve been by all those seminars.
CS: Oh, yeah?
SC2K2: The way you make money in a down market, is you wait for the prices to bottom; you by in paying very little; and then you sell when they’ve gone way up. Yeah, your Rich Dad probably –
CS: That’s the long-term strategy. Are you saying you can’t do quick flips on the way down?
SC2K2: You know, Casey, there’s no way you would be able to handle quick flips. You shown nothing but a [inaudible] ineptitude –
CS: Well, maybe –
SC2K2: — with this kind of real estate. This is was in a — you’ve tried doing it in an up market, and then, as the market turned, you just kept buying more. You’re too impulsive. You don’t have a killer instinct. You don’t have what it takes to succeed in this line of work; and the more I hear how brainwashed you are, I feel really bad for you.
CS: Well — you ever done real estate investing before?
SC2K2: Yeah. I’ve had some real success, too.
CS: Okay. You mean doing the fix-and-flip-type projects, or long-term holding?
SC2K2: Both.
CS: Great, great. Well, sounds like you’re talking from experience, and I appreciate your input. Definitely, my impulsivity is something I need to work on. It could be a good thing, but lately it’s been kind of a weakness.
SC2K2: I’m just glad you don’t work in a nuclear silo.
CS: (Laughs) Yeah, that’s right. Well, Steven, we’re going to have a transcription of this, hopefully later on. I have somebody who’s going to help me, so, people that think it’s going on for too long will be able to read it later. I just wanted to get a few more questions in.
You have anything else real quick, Steven?
SC2K2: Yeah, a question about your family. I saw some pictures of your family with pretty offensive statements about them. Have they seen these? I feel really bad for them; I feel like they’ve gotten dragged into this mess with you.
CS: Yeah. This is an unfortunate part of this whole exposure. First of all, like I said before, I never realized it was going to get this big. I never realized the extent some of these people go to, in order to dig up my past, and honestly, make me look really bad; and not just me, but everybody connected to me. It’s become a real liability. Unfortunately, at this point, if I stop blogging and try to go away, there’s going to be a period of time, where, because of the way Google works, my site will start losing ranking. Then I run the risk of allowing those critic sites to be on top of me, and I won’t even have a chance to answer to some of these things. So, I’ve kind of been [inaudible], so I can somewhat control what’s being said by being the first hit.
SC2K2: Are you related to Mark Hamill, who played Luke Skywalker in the original Star Wars trilogy?
CS: (Laughs) No. Does it look like it?
SC2K2: Yeah.
CS: Okay. All right, Steven. Thanks for participating.
SC2K2: Sure.
CS: We’ll go on to another caller here. It looks like somebody just came on, PaigeDaddy. PaigeDaddy, are you there? PaigeDaddy is not there.
PaigeDaddy (PD): Oh, hey, how’s it going?
CS: Oh, you’re there. Go ahead. Where are you from?
PD: Las Vegas.
CS: All right. Good market there. How’s the market doing out there? Is everything like we are? It seems pretty badly; that’s what I’m hearing.
PD: Well, here’s the thing. I mean, I actually came across — I don’t even know what I was Googling today — I came across your blog and I was reading it extensively. Unfortunately I just got on the call, so I just missed all the other stuff that was going on in the call, but I just wanted to preface that first of all, regardless of the so-called “mistakes” that you made, I mean, there’s a lot of, call them “lazy ass” people out there that talk and talk and talk and don’t do anything. So failure or not, you’re already way ahead of the game because now you know what not to do next time.
The second thing is, and in Las Vegas like any other major city or any city in the country, there’s deals everywhere; you just have to look. Overall, 50 or 52 percent of people from California were the top real estate buyers here in the last few years, but — so call it the “investor swarm” came here, kind of inflated the prices up, and then basically when there was way too many houses on the market the investor swarm went away. So there hasn’t been as giant of gains if you just bought brand new property at retail prices, per say, but now it’s a huge buyer’s market here. I mean there’s builders paying real estate agents 12 percent to 14 percent commissions just to bring them buyers.
CS: Are they doing any cash back deals, incentives?
PD: Basically if you know what you’re doing you can get not only an awesome builder incentive deal you can get $10,000 or $12,000 back from the agent. I mean, so –
CS: Really? From the agent even? Wow.
PD: Well, yeah, if you know that they’re getting a 12 to 14 percent commission, however that get split down, even the builders have their own in-house people, but certain builders will pay the outside agent. I mean, if you know that, obviously you can use that to your advantage because why make an agent filthy rich for not really doing anything anyways? But, yeah, again, I just wanted to say in any city in the country it doesn’t matter what the market’s doing, there’s always people that need to get rid of a problem. And, again, I’ll have to read the transcripts of the call or listen to the after-recording because I just got on the call, so I’m sorry I missed the first hour plus.
CS: No problem, no problem. Do you have any questions or do you have a comment to anybody out there who is either facing foreclosure or watching somebody face foreclosure?
PD: Well I guess a comment I would say, I don’t want to reveal how much real estate I’ve been involved with but a lot of them have been property flips over the past five to seven years and not only in the Las Vegas market but in another market where I’m originally from. And I guess from a strategy standpoint if you focus on, I guess, higher equity flips where if the market does do something time is on your side, it just eats away your profit, but I guess comments are people that are going through foreclosure it may seem like the end of the world at the time to some people, but life goes on.
CS: Yeah, exactly.
PD: I know it’s tough. I know in your situation — I know the pressure and I have a lot of friends that have felt the pressure that you’re going through now and you have all this real estate and all of a sudden cash flow dries up and, oh my god.
CS: Yeah. Now I’m real curious, have you been a situation like this personally? When you were starting out did you make some mistakes? Do you have a particular one to share with us?
PD: Basically I can tell you when I started out I was methodical. I was actually 24 when I did my first real estate deal, and when I did my first one I was like, “Why didn’t I start this earlier?” And so the first handful were very methodical and then, of course, you kind of get the deal bug.
CS: Yeah, I hear you.
PD: I am very good at spotting value and you get too many at the same time — I mean, you’re obviously going through this — you get too many at the same time and you’re not a number cruncher, kind of from a business perspective, I ran into the same problem early on in, call it my investing career, which wasn’t full time. I mean, call it a part time thing, but I guess a comment is just — I guess don’t be afraid to try. I always did joint ventures with people to kind of spread the risk, per say, but I guess a comment is people that are in foreclosure, it’s not the end of the world. I mean, just some other would be or wannabe investors out there, again, I’m not claiming to be a super-specificated investor but I’ve done several dozen property deals over probably a five to seven year period and there were some awesome winners and there were some hard losers, but the point is the only way you’re going to ever learn is doing.
CS: That’s right. And you have to try. And, yes, some people fail, I mean, not fail right away, but there’s always going to be times where you might make mistakes, as with any business. Now I’m curious, in your experience as a flipper have you ever structure a loan where you got some cash back for your repairs or for your payments or any kind of a seller credit back for that kind of thing?
PD: I’d rather not comment on any of that.
CS: Sure. Sure. I don’t want to put you in a corner. But if you do want to comment on it, I’m curious what your experience has been with stated income loans or any of these loans that — “shady loans” — what is your personal experience of what’s going on in the investor community.
PD: Well basically, I have a lot of friends that are real estate agents, realtors, mortgage brokers, and the problem is that looking at it from a mortgage broker standpoint for a second — that’s flawed from the beginning. I mean, they’re getting paid a commission not only on the front end but they’re getting paid on the back end with the yield spread premium which most people don’t even know about. They’re kind of getting double paid and yet the bank comes back and says, “This is the interest rate they’re going to get,” and of course they know they can jack that up a little bit and get you to commit to a pre-payment penalty that they just put thousands of more dollars in their pocket. Just the whole mortgage broker system — it’s both good and bad but I’m saying it’s kind of flawed because they want to get deals closed because they don’t get paid unless they deals closed.
But, yeah, I mean, again in Las Vegas like in every other major market there’s a lot of headlines and a lot of people getting into trouble because of obviously different stuff. But from a homeowner standpoint, on the flip side, most people are — I mean, we’re built on a credit society so when lenders started creating all these really creative loan programs with stated loan and no doc loans, interest only loans, adjustable rate mortgages, all this stuff, it just created more people buying a lot bigger house than they can afford and unfortunately — I know from your standpoint you know all this because you’ve immersed yourself in the real estate business, but again I know there’s probably a lot of savvy, seasoned, sophisticated investors out there that —
Again, when I got on the call, the gentleman that was just talking to you it sounded pretty harsh right when I chimed in on the call.
CS: Yeah, well, welcome to my blog.
PD: I’ve got to give you a lot of credit. Hopefully nothing serious happens to you personally from all the information that you’re sharing, but there’s quite a few ideas that I have to share with you. Obviously I won’t share them on this call, but is there a way that you could be contacted some way, some how?
CS: Yeah. You can send me an email. On the blog you can click a link on the top right, on the sidebar it says “E-mail Casey.” And that’s private. I don’t put that anywhere so you can go ahead and do that. And also, my phone number is on my personal site which is Serin.us. If you just click my name on the blog it will take you to that website.
PD: Okay. And basically — again, I’ll keep this stuff.
CS: Yeah, you can leave the other stuff for a private conversation. Now what’s your experience, in closing, since I don’t get too many people that have actually been doing flipping, what would you say to people — say, fix and flippers, the ones that are in it for a quick deal — are inflating the market and pricing regular home buyers out of the market?
PD: That’s kind of a loaded question. I mean, basically if something’s worth 100 percent when it’s fixed up, and you find something for a hell of a lot less and you just have to use some sweat, equity, and some knowhow and strategic spending to get the house fixed up where you can make a decent profit, that in my opinion, in my definition, is not inflating the market. Where the market obviously gets inflated are the people that really want to get the loan and the values get inflated to adjust for the debt to income ration and down payments, etc.
Or the investor swarms, i.e. from your neck of the woods, come into the cities like Las Vegas and other cities. That’s more inflating the values, but banks and lenders are not stupid. So if there’s some clause in the process sometimes with stuff that’s where the problem lies sometimes. Again, the banks and the lenders aren’t going to make money if they don’t make loans.
CS: That makes sense.
PD: They’re taking risks too.
CS: Thanks a lot for calling in and giving your view. Feel free to contact me. I’m going to go on to the next question. Thank you.
PD: Sure. Thanks, Casey.
CS: Okay. It looks like there’s just a couple of people left and this thing is probably winding down here. I need to give you guys a chance here again. Gordon, do you have anything else? GordonSanders?
GordonSanders (GDS): Hey, Casey. I was kind of taking a few notes and I’ve got two or three questions I’ll just try to string together. First off, CashCall; they’re trying to contact you but you’re avoiding them. They’re eventually going to get a hold of you. They’re either going to serve you with a writ of — I mean, sue you, and then they’ll get a judgment, then they’ll get a writ, then they’ll go show up at a writ of execution because if you dodge the court then they win by default. They’re going to win by default anyway. And then they’re going to show up at your house, what you’re saying is your business, and start grabbing stuff. So I kind of want to know what’s going to happen there.
You mentioned in one of your blogs, a long time ago, that WaMu was one of your credit cards and I know that Washington Mutual lets you check your FICO because you showed that on your blog, what’s your FICO right now?
You said impulsiveness is good. I haven’t seen anything of your actions that shows that anything that you’ve done impulsive is good at all because you’re upside down and you’re getting by without being responsible for your actions.
CS: Sure. I’ll address those three things. Do you have anything else?
GSD: Once you address those I’ve got about three more because I know there’s other people waiting.
CS: Sure. That’s fine. Yeah, we’ll go with CashCall first. Yes, I understand kind of how the process works. I’ve never been in it. I’ve been on the other side of it where I had a renter that wasn’t paying me so I was thinking of going through that process, suing him in small claims court, so I kind of know the next step that I might be facing here and that’s definitely something I’m considering. What would you say I could do at this point if, let’s say I don’t have the money to pay them right now? What can I do to avoid any further escalation?
GDS: That’s for you to talk to an attorney about. But the fact is that once they get a judgment against you and once they file a writ of execution with the sheriff — I filed a writ with someone and the sheriff showed up and started taking computers from this place.
CS: Really?
GDS: I mean, they show up to collect whatever money they need.
CS: I’d better handle it quick because if they’re going to a legal department now, that means they’re going to go collect at this point and who knows how much time I have.
GDS: Yeah. I think everybody says you need to speak to an attorney. What’s your FICO now?
CS: I actually don’t know because I haven’t logged into Washington Mutual in a while and I probably should have done that before this call, but last time I checked it was in the high 400’s, 490 I believe or something along those lines. It might be lower now because I’m going to have two official foreclosures showing up on my record any time.
GDS: Well, it doesn’t go below 450, so it doesn’t get much –
CS: It might be interesting to see if I might be a person that actually gets a 450 FICO score. I might be one of the few amongst some of my friends. I’m hoping other people don’t do the same thing I did.
Okay, next thing, impulsiveness. Well I’m curious what you’re personality is like. You’re probably not a very impulsive person if that’s the kind of question you’re asking. You’re probably more calculated, more conservative, right?
GDS: No, man, I’m not. I do a lot of things and I see more of myself in you than you probably realize.
CS: Oh, yeah?
GDS: I’m just saying that impulsiveness — you haven’t done any of your actions that you’ve done. I mean, it’s one thing to be impulsive, it’s another thing to be smart and impulsive.
CS: Yeah, I hear you.
GDS: A four-year-old’s impulsive. An adult can be impulsive but he still realizes that you get ticked off at someone, you shoot him; now you’ve got to face those consequences. That impulsiveness doesn’t work. Instead of having a gun, you had a checkbook. You’re still responsible.
CS: I hear you. And, you know, that’s what it comes down to is self-control. When you’re an impulsive personality you have to realize that that can be a weakness if you’re not able to control it, and if you’re that same personality then you know what that’s like. Now, tell me, wouldn’t you agree with me that an impulsive person — and if you’re that person you will know — is more likely to take on an opportunity than a conservative person? So an impulsive personality is definitely one that jumps on deals when they come up, takes advantage of trends, and takes advantage of things that normally a person would spend days or years or weeks calculating and miss out on opportunity. For example, instead of just going quietly into the night I decided to start a blog about it. That was a very impulsive decision; I didn’t really talk to anybody about what the pros and cons might be. I just started writing my story. That was impulsive and I’m not sure if it was a positive or negative net effect, starting this blog, but I definitely have seen a lot of positive that’s come out of it. And we’re going to see in the next months and years what really I did by starting this blog, because there’s a lot of things that are coming out. Now what do you think of those qualities as an impulsive person?
GDS: Well I think I just saw you wrote about Robert Kiyosaki’s video the other day and you felt really good about it, but the first thing I noticed was that he called you a greater fool. Then he turns around and says, you know what, if you dig yourself out of this, then you’ll have done well and you can offer other people advice. If you don’t dig yourself out of this, he said pick another line of work.
CS: Well I guess I’ll have to look at that then.
GDS: I mean, you need to go back and re-look at that because I didn’t see anything good about that except him laughing at you often and making fun of you. Now I realize that it was a good opportunity and all that, I think if you looked at in different eyes you might see something otherwise.
CS: Yeah, of course. There’s two things that came out of that. He definitely had some criticism to dish out and many people have noticed it and I’ve noticed it too. At the same time he was also very encouraging of me telling my story and being honest about my mistakes and so that’s definitely an impulsive move. A conservative, careful person is not going to go all over the internet sharing those mistakes. Maybe it was a bad thing for me to do, but at the same time I’ve had tons of feedback saying they appreciate that because that made a difference because people see what not to do and people see some of the things they can do in a situation like this.
GDS: I see what you’re saying but I also see the fact that you’re saying that you are acknowledging your mistakes.
CS: Exactly.
GDS: But all you’re doing is stating your mistakes, you’re not trying to correct those mistakes. It’s a kid saying, “I didn’t intend to break the mirror with the hammer.” And then they break the next mirror with the hammer, “I didn’t intend to do that.” And you hit the next mirror with the hammer, “I didn’t intend to do that.” Instead of –
CS: Sure, sure, no, I hear you.
GDS: I mean, acknowledging mistakes is one thing, but acknowledging mistakes and being sorry for it and trying to make amends, that’s the adult side of it that you always seem to be dodging.
CS: Okay. I definitely respect your opinion on that. Now would you say it’s a step above a person who’s denying their mistakes or not even acknowledging them?
GDS: Well I don’t see — there’s a fine line between acknowledging your mistake and sticking your head in the sand, and sticking your head in the sand period. There’s not much difference. But if you acknowledge, “Hey, I screwed up and I want to make it right, and I’m going to face the consequences and pay the people and talk to the people.” Everyone’s dodged a creditor at one time or another; I agree with you on that one.
But the fact is that everyone that talks to you says, “Dude, it’s not a smart move. You need to face up to it.” And you keep bragging about –
CS: Yeah, and check this out, and I don’t need to convince you of this, but if a person is looking at something from afar they don’t realize, “Oh, yeah, they own it; they’re involved.” For example I’ll give you one quick example, people would tell me to just go ahead and file bankruptcy when I first started off. Now do you think that was the responsible thing or not? Well check this out, if I was to file bankruptcy I would have not had a chance to at least try to do a short sale and find a way to pay those lenders back, or try to find a way to do something. Bankruptcy means that’s it, I’m out. And to me I wanted to at least do something. So that’s an example that I’d like to say that I’m doing something positive, at least attempting to sell those properties.
GDS: Yeah, I don’t see that you learned anything because the short sales, you talked to a realtor about. You spent so much time trying to find somebody that would even do a short sale for you anyway, but let’s get past that. You qualified for a lot of loans, $2.2 million of loans within a couple of months. It doesn’t take a rocket scientist to figure out that somebody making $50,000 a year won’t qualify for a $500,000 house. Somebody making $50,000 a year won’t quality for a $250,000 house. Somebody making $50,000 a year barely qualifies for a $125,000 and most likely a $100,000 house. You didn’t just overstate your income by 10 or 15 percent; you couldn’t have.
CS: Now that particular house, the one in Rio Rancho, I was applying right after I quit my job, so I was running that one I believe as a self-employed real estate investor. And so based on that the income stating range was much higher so I was able to do it that way.
GDS: Yeah, but just earlier in this conversation you said that you — I wouldn’t have doubled or tripled my salary, I would have maybe adjusted it by a little bit.
CS: Yeah, that’s when I was working at Pride Industries. Now when I was already on my own I was seeing money coming in. For example, taking out $30,000 on one of the deals and some of the other deals were coming my way. The money was definitely coming in, so to me it made sense.
GDS: But that wasn’t income that was money that you were using for something else. It was already pre-used. I mean, you can’t claim that it’s –
CS: Yeah, you’re right. Technically it was a loan. At the same time, if I’m able to sell that then it ends up being income. So it was early take out of the profit; that’s the way I saw it. Now whether it was right or wrong to see it, that’s a different story. I’m just telling you how I was looking at it at the time.
GDS: Right. So you’re saying that on some of your applications you probably said you were making $250,000 or $300,000?
CS: That was probably the case unless that was one of the ones I did a no doc loan because one of them I didn’t state anything; I was just able to qualify. It was a higher interest rate but I love those no doc loans, they’re the best because you’re never stating anything so no one can ever go back and say you were lying on your application.
GDS: Well you had to put in some amount. I think your cell phone’s cutting out. Also, the passive income that you keep on wanting to talk about getting, I don’t see anything you’re doing that’s passive other than dodging the creditors because the passive income — you have to work for every bit of this. Why not have rental property, $60,000 $100,00 houses, with a 40 to 50 month payout and do section 8 housing? That’s passive income.
CS: [inaudible]
GDS: Something’s breaking up but I heard you mention something about a high growth fund. But the fact is that if you were to have a rental property with a 40 to 50 months payout, after five years you’ve got equity. You own the house. And then that is passive income.
CS: That’s what I was referring to. Can you hear me okay now?
GDS: Yeah, that’s fine.
CS: Okay, what I was trying to say is I was doing fix-and-flip in order to raise capital because I didn’t have any, and then once I had enough cash to put a down payment, say, on some long-term holds or maybe an apartment complex, that was going to be my passive income.
GDS: You’re trying to generate capital to do this stuff when you could have started off buying one house and making the renter pay your mortgage payment.
CS: Sure. I could have done passive income getting one at a time over a long span of time. I just wanted to shortcut it by raising capital quickly by doing fix-and-flip.
GDS: But you would have bought — there’s not much difference other than the fact of the dollars of the homes you bought. Everything that you’re saying right now says, “I intentionally bought six houses within two months because I was trying to raise a bunch of money.”
CS: Well, yeah, I was looking to buy then wholesale, fix them up, sell them at retail, make a spread, and once I had enough money saved up then I could put it into something that was more of a passive income, maybe an apartment complex or rental homes. So, yeah, it’s a different strategy. Some people just believe in buy and hold in real estate and they wait until it appreciates naturally. Some people do sweat equity and forced appreciation by fixing up and reselling quickly, and that’s what I was looking to do.
GDS: Okay, you mentioned the sweat equity. Tell me about the sweat equity you did in your houses because I don’t see any? I see you taking a lot of money out.
CS: It’s easy to look at a house after the person ran out of cash to do the repairs. I wasn’t doing the repairs myself, okay, I was hiring people to do it and I’ve done quite a bit of work to a lot of those properties. For example, the Modesto property; if you would have seen pictures before and the way it is now you would see a big improvement. So they were in various stages of repairs. Some I was able to finish up before the money ran out, some of it I didn’t finish up. And, yeah, there’s an argument that can be made, people are saying I should go over there and clean up the place or something while they’re just sitting there. That is a valid argument. At the same time, I’m busy with other stuff and, yes, some of that is free, but to me it just didn’t make sense sticking more time and money into a property that already I don’t have money for. Otherwise I’m borrowing more to try to save something that might get foreclosed on. So that was my rationale on that.
GDS: Well it looks like some other people are waiting, but I’m glad that you finally mentioned that you were just trying to buy a bunch of houses in just a short period of time to generate a lot of money because I think that’s what a lot of us were assuming, but it’s good to have conversation.
CS: Yeah, if I was looking to hold those properties I would have never bought such expensive properties because the rent don’t cover the mortgages. But, see, that was probably the mistake I made. If I was doing a fix and flip on a lower price range, at least my plan B would have been to rent them out, but see what happened was I was buying higher priced properties, I got stuck, and I couldn’t rent them out. And so here I am now.
GDS: All right, well go ahead and take the other callers and good luck.
CS: Sure, sounds good. We have this one interesting line came on. We have Walter from — WalterCashCall. Go ahead WalterCashCall. Are you there Walter?
WalterCashCall (WCC): Yes.
CS: How you doing?
WCC: I’m doing fine, yourself?
CS: Doing great.
WCC: Listen, I just want to ask you, you keep using the phrase “fix-and-flip.” You never actually fixed anything that I can see from your accounts on your website.
CS: Did you not see the “before” pictures on my Flickr account of all those properties?
WCC: I didn’t bother to page through all those, man, you’ve got too much stuff in that.
CS: Sure, no problem. Perhaps I should show people the “before” and then you’ll see that there were definitely improvements on a lot of them.
WCC: Yeah, I’m still not buying it, man. I mean, I saw some of the nasty toilets. You had a place a homeless guy was living in. I mean, they weren’t — you never did anything.
CS: Well the homeless guy wasn’t living inside, he was inside of a car on my driveway.
WCC: He probably didn’t even want to live in there.
CS: That particular house was a nice house. It’s move-in ready, there’s nothing wrong with it. That one we actually did fix up really nice. The kitchen was brand new. It was just overpriced. My mortgage is too high on it.
WCC: Okay. I guess we’re just going to agree to disagree because based on what I saw, those places were crap. So better luck next time.
CS: Okay, thanks. That was Walter from — well, he’s not from CashCall, but I like the user name there. Okay, we’ll go with — let’s see, do we have anybody new here? We have Nacho. Nacho, how are you doing?
NACHO: Casey, my man, how are you doing?
CS: I’m doing great. How are you doing, Nacho, where are you from?
NACHO: I’m doing good. I’m from Southern California.
CS: Southern California. A good place to be.
NACHO: It is beautiful down here. Listen, I have a question. I know a lot of people are wondering — what’s up with the murse? Can you give us some suggestions on where we go to buy it, how much they cost, which side, left or right, we carry it on?
CS: Sure, sure. This is the second version of it. I used to have another one made by Guess - Guess Jeans. That was a really good one, but then that one got dirty because I wear it all the time, and this one my wife actually bought for me as a gift because I really miss my version number one. But you know what, there’s different kinds out there, you just have to look around, find what works for you. It can’t be too big, it’s gotta be just the right size; and it can’t have too many open pockets because I found myself losing pens and losing my PDA which would just keep flying out. This new one I have completely zips up so I can actually run with it if I’m — you know, trying to run away from somebody or catch somebody.
NACHO: So it’s sort of like Goldilocks and the Three Bears - you know, not too big, not too small, right?
CS: Yeah, there you go - you got it.
NACHO: Which side do you traditionally wear it on, the left or the right?
CS: It’s normally on my right, cause I’m right-handed so I can reach over and grab my PDA or my digital camera, when those –
NACHO: What’s in the murse? That’s what we need to know. What do you carry in it? Is it a Jack Bauer bag of tricks or what?
CS: What was that?
NACHO: Is it your Jack Bauer bag of tricks and stuff? Do you have, like, C-4 and stuff in there? [inaudible] or ammunition?
CS: I can’t tell you everything that’s in it. Okay, how about this, I’ll just tell you some of the contents, because I can’t talk about every single thing in there. We got the digital camera, that takes the famous pictures. We got the PDA that’s also my cell phone, so I can get online and moderate comments.
NACHO: Sweet!
CS: We have a Hacky Sack when I get bored.
NACHO: Oh, that’s nice, that’s nice.
CS: And what else do we have? We have a notepad to write down notes when I’m talking to people. And we have —
NACHO: And do you, like, bird-dog sweet deals? When you’re trying to bird-dog sweet deals, do you take —
CS: Oh exactly, when I’m talking to the mailman, he gives me a sweet deal with the tip.
NACHO: OKAY, how about the Utah wrap? Any resolutions?
CS: I said earlier in the call that, you know, I just haven’t had the chance to finish that up. But it’s still out there —
NACHO: Don’t you think you should? I think that’s worth a good hour or two, don’t you think? I really do, I think it’s good for the people that —
CS: OKAY, you know what, I’ll take full blame for it. It is my fault for not taking care of it. There’s really no justification on that one.
NACHO: And I appreciate — and it’s good; it’s good that you want to take full blame and all, but are you actually going to take some action and do something about it? Because that’s really — you know, talk is cheap, but it’s the follow-through that’s really important. Seriously.
CS: Yeah, exactly. Thanks for that advice.
NACHO: You’re welcome. So what about G? I know she quit school, right?
CS: Yeah, she quit school. Just recently - we’re talking yesterday.
NACHO: Did she get a refund on her tuition?
CS: I don’t think so, as far as I know. We need to look into that.
NACHO: Maybe she can get —
CS: But it wasn’t because we can’t afford it - some viewers were saying oh, she quit because we can’t afford it. No, it was already prepaid, so it was a really tough decision. But she’s going to be helping me out because it’s really tough for me to do all this stuff on my own. And now she’s just — she really wanted to work on her degree, because she wanted to be able to in the future help us out by getting a job. But the thing is, without much education, it’s hard to get anything highly paid. But at this point we just need to do whatever we gotta do.
NACHO: Do you think she’s starting to resent the fact that she had to quit school and go to work to help you guys out financially?
CS: Hey, you know what, that might be part of it. We’re going to have to deal with that issue.
NACHO: But is that affecting you in the bedroom?
CS: (Laughs)
NACHO: Hey, people want to know!
CS: Surprisingly, none of this is affecting it, no.
NACHO: Oh nice, nice. So Casey’s getting some! Good for you.
OKAY, about your hair. How much do you spend on highlights in your hair, and how often do you get it cut? We need to know!
CS: This one’s from about a year ago, it’s been growing out really long, and I got highlights back in — when I was in Rio Rancho — sorry, when I was in Albuquerque last year trying to sell that Sonora property which I sold in an auction, which was really a fun sale. That was one of my successful deals, and I ended up getting highlights there because — well, you know, it’s something you gotta do sometimes, to change your look.
NACHO: So do you feel compelled at all to pay any of your credit card debt off?
CS: Well, of course, it’s not like I’m saying I want to pay off every dirty penny just to make it sound good.
NACHO: But like I said earlier, it’s one thing to say you want to do something, but another thing to take some action, you know?
CS: I know, I have a little bit of a history for saying one thing and not doing anything about it, so I don’t blame you. But at the same time, I thought at the beginning it would be such an awesome story, a comeback story and show so much success to be able to pay everything back, but at the same time I think I had a bit of a wishful thinking going on, because I didn’t realize when I first started what kind of a hole I was in. The hole’s so big that at this point, I’m really out of options.
NACHO: I know, I know, but you know what, you fill up a bucket one drop at a time, you know what I mean? You have to look at it that way.
CS: Yeah, but here’s what’s going to happen. I pay a credit card — even fifty bucks — that doesn’t do anything to the collection process. Here’s what happens: it’s going to go and get discharged, and then they’re going to try to sue me and try to get that money. So that fifty bucks could have been used better in something where I can actually make money, perhaps doing another deal –
NACHO: Or maybe to go on a snowboarding trip? Well, maybe you could spend it there!
CS: (laughs)
NACHO: I mean, come on, think about that, though. Don’t you feel bad doing those things knowing that you have debts to pay?
Oh, good question, trash. Have you been taking the trash out regularly?
CS: Are you the one that reminds me every time on the blog?
NACHO: No, I’m not. I’m T, I’m T. I’m the one who offered to help you with the Utah wrap.
CS: Well, OKAY, you know — [inaudible] trust.
NACHO: Well, I gave you my work details, so how much more do you need to trust me?
CS: Well, you know how it is. I get so many calls and so many people are trying to play pranks on me. If you were in my position, you’d know what I’m talking about.
NACHO: I understand.
CS: But with the trash, I’ve been okay. I’d say about 75 percent success. There’s been a couple of times I’ve seen the trash truck on its way and I’m running out the door to try to get the trash can out, and there were once or twice when I missed it. But I’m doing pretty good, I think.
NACHO: Do you and Nigel Swaby - do you guys have a flirtatious relationship?
CS: (laughs)
NACHO: You know, is there maybe a bit of bi-curiousness there? People want to know.
CS: Which way do you swing?
NACHO: I like men, I like men. Big strong men.
CS: Well, all right. I guess the name says it all, Nacho. But, anyway –
NACHO: Nacho is my cat.
CS: There’s nothing going on. Look, he’s married, I’m married, he’s a blogger, I just wanted to talk with him about some possibilities for the future, so there’s nothing going on. But people don’t believe me, people make their own assumptions, so —
NACHO: Yeah, that was a joke, I was just kidding. But he seems a little shystie, Casey, he seems like he’s grabbing onto your coattails. How do you feel about that? I don’t think that he’s really a solid guy. But then again –
CS: Well, if there’s something coming back, I don’t mind, some of the traffic and all that. So if it’s a win-win relationship, it’s all good.
NACHO: Win-win! Drink! We’re kind of joking - all your anti-spam words, everybody’s having a drink every time you say one, so —
CS: Yeah, they keep repeating them back to me. I guess those anti-spam words became a hit.
NACHO: Yeah, they’re pretty popular.
CS: Hey, do you have any more things to say? By the way, I do like the name Nacho.
NACHO: That’s my cat. My cat’s name is Nacho. I didn’t think you’d take my call if I put my real name. So anyway — Jamba Juice - what’s your favorite flavor?
CS: You know what? Jamba Juice overall is not as healthy as people might think. It’s definitely better than drinking Coke, but most of that stuff’s frozen, and even though it’s all natural, meaning there’s no added sugar, I like my stuff fresh out of the juicer. So the only thing I really drink there is wheatgrass shots. I also do freshly squeezed OJ and freshly squeezed carrot juice.
NACHO: Wheatgrass — does it give you gas? People want to know.
CS: [inaudible] — jitters — you should try it, you know, it has a nice — kind of a sweet aftertaste. It’s kind of an acquired taste, so –
NACHO: Does it give you the runs? Because it looks like it would.
CS: Does it give you what?
NACHO: The runs. Diarrhea.
CS: No, it’s good. Because normally, I spend a little extra time on the toilet, and so wheatgrass comes out. The times I spend extra on the toilet is good because I can moderate my comments on the PDA in downtimes from my busy schedule. But then I still prefer to get the wheatgrass — [inaudible]
NACHO: OKAY, another question. Your phone bill is extremely high. Don’t you think that it would be in your and your creditors’ best interests if you reduced it?
CS: What’s extremely high? I’m sorry.
NACHO: Do you really need to check your comments on your PDA? Really, do you?
CS: Yeah, I check it on there. Because, the thing is, I gotta keep them flowing. People start complaining when I’m not letting them through fast enough. And I tried to get some people to moderate for me, but there are some issues with that. There’s the issue of accountability and who can I trust and that kind of stuff. So, I’ve been trying to do it on my own as much as I can. But things are going to change moving forward. The future of this blog is that there’s going to be less of me. They’ll be more foreclosure help and more credible authors, and I’m going to really take it to the next level with the help of some people.
NACHO: Right. Let’s talk about the hater blog, because you talk about it all the time, like these people are out to get you. Don’t you think that —
CS: They are, yeah.
NACHO: Don’t you think that many people went on to the other site so that their comments could go through, so that they could talk in real-time, because you were taking a really long time to moderate the comments? Don’t you think they just wanted another place to speak the truth?
CS: Sure, and that’s fine. I don’t mind them speaking the truth; but you know how it is, you’ve seen them. Wouldn’t you agree that some of them go overboard? I mean, we’re talking taking pictures of my family and putting some really nasty comments on them, and even modifying some of the pictures. What would it be like if they did that to pictures of your wife and your family?
NACHO: I understand, but that’s why I make sure what I have on my MySpace or whatever is not pictures that people would take and use, and I haven’t infuriated people and made people feel like part of what you did.
CS: I’m honestly surprised at the level of hate out there. I have a friend who’s a blogger, and he says he’s never seen haters this bad before.
NACHO: I have to say this for Dolph, because he gets infuriated when people call us haters. We’re realists, as my Miguel would say, and we just want the truth. And we feel that you’re being shystie and really secretive and you’re not being transparent.
And also, you don’t want to go get a job! You know, go get a job and do this stuff on the side! There’s nothing wrong with that!
CS: Are you saying I don’t have a job right now? I’ve talked about how I’m doing consulting jobs and I have money coming in.
NACHO: So are you, like, going to pay taxes on that money?
CS: Yeah, of course. I’m not doing cash under the table type stuff. I’m not dealing wheatgrass shots on the side here.
NACHO: You’re not?
CS: No, no, no, I mean I like to consume them legally.
NACHO: And I understand you’ve been brainwashed by these gurus; I understand that, Casey. But there’s nothing wrong with a real job; there’s nothing wrong with that. You get promotions, you get increases —
CS: Oh, I’ll be the first one to agree. You know, it’s funny –
NACHO: So, then, why I are you so opposed to getting it?
CS: — because every time I try to say something about a job, every time I say something, and I like to show both sides to people, everybody focuses on the fact that I’m saying the job is bad. I’m not saying the job is bad. In fact, if it wasn’t for a stable job — career –
NACHO: You’re calling the people that work for a living, cube-dwellers and W-2ers and 9-to-5ers, like they’re wasting their life. You know, some people do things that they enjoy. I recently got a promotion, Casey, with a fat increase. That’s nice, you know; that’s nice.
CS: Yeah, that’s really good. When I was working at Pride Industries, I really enjoyed the fact that I had a stable paycheck coming in. It’s just that I got a little too impulsive. I should have kept my full-time job and I still do have money coming in from jobs I’m doing, and I may go back to a full-time job. There’s nothing wrong with it.
NACHO: Why can’t you do those jobs on the side and work full-time as well? Don’t you think that that would be what’s best for your wife?
CS: Are you really saying that everyone who’s a realtor and everyone who’s self-employed should go out and get a full-time job? Are you saying self-employed is not a job?
NACHO: Okay, my friend’s wife is a realtor. She works at Marty Rodriguez Real Estate, which is one of the largest real estate offices in the San Gabriel Valley. And she’s already looking for other work.
CS: Well, that’s fine, not everyone’s going to be successful and self-employed. But don’t you know self-employed doctors or lawyers or successful realtors or anybody who doesn’t have a W-2 but still makes money? It’s not like W-2’s the only…
NACHO: But you haven’t been successful! So isn’t it time to try something else? Supplement your side jobs with a real job.
CS: Well, you know, I never said I’m not going to get one. I’m definitely considering that, and since I do still have money coming in through some of those other sources, it allows me to stay flexible so I can still kind of be in real estate a little bit, and other opportunities.
NACHO: Do you understand that the real estate market is tanking? Do you have a grasp of that?
CS: Oh, yeah. That’s why I’m looking at other investing opportunities, not just real estate.
NACHO: And do you understand that you bought in at the worst possible time? You do understand that, right?
CS: It’s not like you can’t make money in a down market. My local Rich Dad, he made his fortune in the last downturn in California. But of course he had a lot more experience.
NACHO: Did he have decent credit? Was he able to secure loans?
CS: Well, he could secure loans. He had money partners. He had mentors. See, I kind of started off without any mentors guiding me, and that’s kind of one of my problems. And I didn’t have any construction experience.
NACHO: You know what, Casey? I don’t think mentors is your problem. I think you’ve got enough with these guru mentors. I think that that’s the last thing you need. What you need is a swift kick in the ass, from somebody who’s going to tell you the truth. Seriously. Someone who’s going to tell you the truth.
CS: I appreciate you being upfront and giving me a little dose of reality, as you said.
NACHO: Well, that’s how I roll. I’m always trying to keep it real. I’m just trying to let you know, man, that you need to start looking at things differently. You’ve been going a certain way and it’s not working out for you, and you really need to change the way you’re viewing life.
CS: Well, I appreciate it.
NACHO: Because everybody that you owe money to is going to get shafted, and then, in turn, taxpayers are going to have to pay — you know, foot the bill.
NACHO: Are you worried about going to jail?
CS: I’ve already kind of addressed it, but the thing is, if I live my life in fear, what good is that going to do?
NACHO: And you don’t think that you deserve to go? You don’t think that what you did was basic thievery?
CS: Well, the thing is I wasn’t out to rob banks, I was out to make a business, and I screwed up.
NACHO: But Casey, you got everything fraudulently. Come on, you knew in your heart that that was the wrong thing to do.
CS: Part of me was thinking that maybe I shouldn’t be doing stated income loans, because even though everyone seems to be OKAY with it, I had a little bit of a gut instinct. I should have listened to it; you’re right.
NACHO: And you understand that when you do things wrong like that, sometimes you have to pay the piper?
CS: Oh, yeah. And do you think I’m paying the piper?
NACHO: No, not yet. Not by any means, no.
CS: You don’t think that all the financial stress and the issues I’m going through is not enough?
NACHO: Absolutely not, Casey. I think you should be out there working your ass off — two jobs if necessary — paying five bucks a month on every single bill if that’s what it takes to pay this stuff down. I think you should be calling your creditors and making some sort of payment arrangement for you to —
CS: You know what? Check this out; put yourself in my shoes. Even if I get three or five or ten jobs right now I’m not going to be able to catch all my loans up, so they’re going to go to collections, and they’re going to start suing me. So if the only good thing I can really do right now is bankruptcy protection or refinance all those loans.
NACHO: If you pay five dollars a month on any bill, they can’t send it to collection, Casey, do you understand that?
CS: Sure, they can.
NACHO: No, they can’t.
CS: If I don’t pay the full monthly payment — I can’t just keep letting them go… That means I can just pay a dollar on all my loans and they’ll just keeping indefinitely. They’re not going to do that.
NACHO: I’m not talking about the foreclosure loans, I’m talking about the credit card bills.
CS: Even the credit cards.
NACHO: Casey, you have to do something to try and right this wrong. Who’s the guy who has the blog - I am [$334,442 in unsecured debt. I am 23. Will I make it?] dollars, whatever the hell it is, in debt.
CS: Yeah, the guy eating Ramen and stuff. Yeah, he’s eating Top Ramen; he’s doing all this other stuff.
NACHO: He’s doing the right things. If you would do those things, people would be behind you. People would be giving you suggestions and telling you what to do. Do you understand that?
CS: Well, you might have a good point there. But I wonder if that guy’s really for real, though. Do you think a person can survive on Top Ramen for six months?
NACHO: Oh, yeah. Sure.
CS: Do you think he can eat that crap and still be healthy and still be safe?
NACHO: Yeah, throw some vegetables in there. Casey, the last thing you need to worry about right now, seriously, is eating your vegan — your mildly vegan — seriously, you throw some vegetables and a little bit of whatever, some chicken in the Top Ramen, and it’s fine. Have some beans and rice; that’s fine. Buy a big-ass bag of beans and a big-ass bag of rice and cook it up. Have oatmeal for breakfast –
CS: I do do that, I — [inaudible]
NACHO: It doesn’t seem that way, Casey, it doesn’t seem that way. And that’s what people do when they’re in debt. That’s what people do when they’re in debt when they know that God is watching them and want them to do the right thing. And you know this; you say you’re Christian. You’re Christian, right? Or are you Mormon?
Did you disconnect on me? Oh, you son of a —
CS: I’m back online. I got disconnected.
Hey, thank you for those questions, by the way. I guess I should have known, if I was going to do the live answer, I’m going to get under the fire here, a little bit. That was actually pretty good; to be able to address some of the issues.
We’re actually coming up to two hours. I can’t take any more stuff because it’s already really long, and hopefully, people have enjoyed it. I know some of this stuff was kind of dragging on, but we should have a transcript, hopefully, and I’ll talk to you guys later.
Leave some comments. Let me know how I did.
Thank you.

TalkCast 'o Doom Part I

Part I (acquired from Noble Transcription Services Blog)

Casey Serin (CS): Welcome, everybody. This is my second live call. TalkShoe is the service I’m using. It’s a nice system. Some of you are wondering if I’m making any money on it. I was surprised that, yes, they do pay money to talk using their service. Now that’s not why I’m doing it. I kind of enjoy doing neat things because it’s different.

I sometimes get tired of writing all day, blogging, and so a talk show should be fun. Now some of you are typing your messages here; I’m probably going to ignore it for now. I’m going to give more preference to the call-in calls. People are on the line, here.

Let me just start off by giving a quick overview of what’s going on. Some of you might appreciate it cause there’s questions that you say I’m not answering. So, I’ll try to hit some of the key questions that I remember, and then we’ll go from there with the calls.

I’ve been getting busier and busier lately, trying to find additional jobs that I can do, with consulting and web design and things like that; so I can make a living while I’m going through this transition stage with my investing business. A lot of you say, “Why don’t you get a job?” Well, I don’t talk about it very much, but I do have jobs. I do do things. I used to do some projects for Chris, whom some of you might remember. I also do other things; I have a couple other jobs lined up where I’m going to be doing some web design for some other bloggers, and basically, putting my background in web development to use, to make a little bit of money. And yes, you saw that right — my wife actually quit college in order to help us make money, because it’s just getting to the point where we need to do that.

We have — the future of this blog is really what I want to address. The blog has been taking a lot of my time, honestly. I’ve been thinking it’s not a big deal, just kind of a thing I do on the side; been a fun ride; I’ve had a lot of traffic and a lot of media exposure, and without even realizing it, and that’s definitely not something I was planning on doing; never thought it would be this big. But, I love to tell my story in order to help other people not to make the same mistakes I made. And so, that’s what I’d like to do.

And so, what I’m looking to do now, because I’m getting busier and busier, trying to actually make a living through other methods, since my real estate investing business right now is kind of at a standstill as I restructure — I’m getting busy with these consulting jobs, so I’ve decided to bring on a partner on board to help me run the entire website, and that’s what I’m going to be doing is running the site through this partner. I’ll still be involved. I’ll still tell my story.

But what I’d really like to do is turn the site into a foreclosure resource to help people out. I’m getting some pretty nice rankings in the search engine under some nice topics. For example, foreclosure; being #10 — actually, I slipped down to #11; that sucks, but that’s fine. I’m still on the first or second page of Google. That’s really good.

I’m getting a lot of e-mails. People are looking to get some help, and things like that. I’ve been trying to answer them, but I’m not really compensated to do that right now. There’s only so much I can allow myself to do, and I do want I can; but if I start turning this into more of a credible resource for foreclosure help, that would feel really good; that I would’ve made a difference out there on the Internet.

That’s what the partner’s going to do; help me run the site and market it, and really take it to the next level. I’m looking to have some guest bloggers in the future, too, and bring a few experts on board. The experts will help increase the credibility of the site. Maybe we’ll have a forum, and those kind of things. I don’t know what else to really cover. Those of you who follow me know what’s going on.

I’d like to touch really quick on some of the last houses I have left, which is the one in Modesto, and the one on Guadalajara in Rio Rancho, New Mexico. We’re still working short sales on those, and there hasn’t been much news from the banks. They’re reviewing the short sale packages, and I just called the realtors who are involved in that.

No news yet, and as soon as I do get some news, I’ll let you guys know. The foreclosure deadlines are coming up; both of those houses are going up on the 28th to auction. I spoke with the one in Modesto, and he says the bank is saying that they’re going to be rescheduling that, because they like the offer. It’s kind of the same story from the one in Rio Rancho, those not as reassuring. Those guys are a little bit hard to get a hold of.

In terms of the Utah payment — the missing payment: people have been bugging me about it for months now, and, unfortunately, I’d like to say that they’re hasn’t been very much progress because I haven’t put a lot of priority on it, and I know I need to call them up and figure this out. There’s a complicated situation because it’s been several months since I spoke to them, and I was supposed to send a fax with a copy of the check that apparently they cashed, but they don’t show it in the system. I need to get on top of that mess, eventually here. I know I need to take care of it. For now, the payments are coming in from the buyers, and so at least it’s not going to foreclosure.

It’s actually up for sale, and the investors — it’s not a family, by the way; people are saying I’m screwing some kind of a family — it’s not a family, it’s actually another group of investors. I think it’s a husband-and-wife team of investors looking to finish my project where I started. They’re standing to make a pretty good amount of money, and I’m happy at least someone’s going to make a profit on it.

What I’d like to do now is take a question or two; that way, we can mix it up a bit. So we’re going to start with StevenCody2002 — that’s the username I see here. Steven, go ahead. Go ahead, Steven.

StevenCody2002 (SC2K2): Hi, how’re you doing, Casey? I had a question for you. First of all, I really appreciate you honesty. I know a lot of people don’t — a lot of haters don’t. I had a specific question for you. I know you used a lot of stated income loans, and I wanted to know exactly what was the highest salary you ever put down on a stated income loan?

CS: I’m going to answer this question — and by the way, just to let everybody know, let’s do one question per person; and if you have a follow-up question, I’ll get to it again. But I’ll go ahead and answer it.

The highest salary I’ve ever actually made was $50,000 with Pride Industries. Now in terms of what I put down, it was different with every loan, because a lot of times, I didn’t even know what we were putting down. I just sort of said, hey, we need to do this loan, and the broker that was helping me was using the numbers that we needed to have in order to qualify. I know there was a number put on there, but I haven’t really gone through and checked all those applications. I definitely know it was higher, because if I was able to state my actual income, then I would have been able to go full doc and get a much better interest rate. I paid more for that loan — more points and a higher interest rate — because I was going stated income.

SC2K2: Well, the broker would actually know, but you don’t know –

CS: It’s on those apps. I could pull them out and see what’s on there, but it’s different numbers. I knew we were overstating —

SC2K2: I know that I and a lot of other people would be curious just to see how high you went; like if you doubled your salary, if you tripled it, or if maybe you just went up 10% or 15%.

CS: From what I remember, it was just a little bit more than I was making. I don’t think I was doubling or tripling, because what happens with stated income loans, is it has to make sense. If I’m sitting in a position of programmer or analyst, and I’m making $50,000 a month, it’s not going to fly. It was in an acceptable range, because we actually have a range for different careers.

SC2K2: Right, that’s understandable. Well, I tell you what, I’ve got a bunch of questions. I know you probably want to get to a few people. If you’d like, I could ask you a few more, or you could come back to me.

CS: Sounds good. Okay, we’ll go with — thank you, Steven. We’ll go with the next person here. We’ve got “Chief100.”

Go ahead, Chief100, you’re on the line.

Chief100 (C100): Hey, Casey. How’re you doing?

CS: Doing great.

C100: My question —

CS: And by the way, with all the questions, go ahead and tell me where you’re from, because I’m curious what parts of the country are calling in.

C100: I’m from Pittsburgh, Pennsylvania; actually in Orlando right now from some training for work. But anyways, I’m more interested on — are you making any — how much income are you making from the website, from sponsors? What are you pulling in? Is there a way to harness this push you have right now to make some more money?

CS: Sure. Let me answer the question of income. As you know, I used to have Google Adsense on the blog a while back when I first started. That was getting to the point where it was making almost $1000 per month. Unfortunately, a lot of those clicks were fraudulent clicks. Some of the critics/haters on the site were manipulating the system, from what I’ve seen, and so Google banned me. You probably know that if you’ve been on the blog.

After that happened, I decided not to monetize for a few months, and I’m still in that stage. The thing is, a lot of people assume I’m making stuff up when there’s a profit motive, or at least, a possible profit motive. So people think I’m skewing the facts, making stuff up in order to drive up traffic. I didn’t want people thinking that, so I didn’t have any money coming from the site for a while.

Now I’m at a point where I’m thinking, I have to make income somehow, one way or another, and there’s nothing wrong to have a legitimate income stream coming from the site, as long as I’m helping people. I’m looking at putting ads back on and doing sponsorships and things like that.

C100: Excellent. Just want to see you profit for your endeavors. Even though the real estate failed, you’ve entertained a lot of us. We’re appreciative. You’re entertaining the haters, too, so good luck to you, Casey.

CS: Are you a hater, Chief?

C100: It depends on what day it is, Casey.

CS: All right. Sounds good, Chief. Let me just tell you, along the lines of making money from the blog. What I’d really like to be able to do is the next stage of this blog is to be able to match up people that have questions, people that need help with foreclosure or debt, with professionals that can help them. I’m looking to build a network of trusted individuals that we can refer people out to. And obviously, I’m going to collect a little bit of a referral fee, but my goal is to be able to have a matching service happening there.

Thanks, Chief, for your question. We’ll go to GeorgeBush. Go ahead, George. where are you from?

George, are you on the line? Okay, we’re skipping George. Going to Suzanne42. Are you there?

No Suzanne. We’ll go to Robert — is it Rupert, Robert — You there? Okay, we’ll get you on the next cycle.

Okay, we’ll go up again here. JeffShantz, it looks like. Are you there, Jeff?

JeffShantz (JS): Hi, Casey. How’s it going?

CS: Great. Where are you from, Jeff?

JS: I’m from Canada, actually; near Toronto.

CS: Oh, great.

JS: I just have a quick question for you. I’m not a hater, by any means, but I am curious as to — you often said that you weren’t sure if you were on the right side of the law or not; if you were scamming or not. I’m just wondering how — how can you really rationalize saying that when you’re relying on applications — you had to have known you were breaking the law.

CS: Sure, let me address that. That’s a good question, by the way, Jeff. Basically, here’s how it all went down — and I’ve talked about this on the blog, but I’ll try to put it in such a way to where you don’t think I’m just making an excuse.

JS: Sure.

CS: I knew this was stated income loans. I knew on stated income, you’re stating higher than you’re really making. But the way I saw it, and the way it was explained to me, is it was an acceptable industry practice. So what I was doing was going with that, and figuring it’s not a big deal. If I get caught, it’s a slap on the wrist. Never did I realize I was actually committing criminal — actually, mortgage fraud. Now, if I thought this was something I thought I could go to jail for, I would never do that, because the risk is way too high. Plus, even with the stated income, even though it was so accepted in the industry amongst investors, I knew that it’s something that I won’t want to do too often, because I had a little bit of conscience issues with that, too.

I knew, if I’m signing something on a piece of paper and it’s not 100% true, then my integrity’s on the line. You know what? When I got into it, I had a little bit of a conscience viewing with it, and I should have listened to my gut when I was doing it. Then later on, when my wife found out I was doing these shady loans, she said she didn’t want to see any more of that, because she didn’t realize I was running loans until later. Her involvement in business has always been very limited. That’s my explanation for that.

And then, of course, Jeff, when I started talking about it initially on the blog, I didn’t realize I could really
get in trouble for this stuff. So I thought, no big deal, I’ll just tell people that lying on your application can
mess you up; in terms of your business, you can get in trouble financially. Then, when I said that, and then people came back and said I’m actually convicting myself online, the cat was already out of the bag. I figured, you know what, what am I going to do — live in fear now? I figured I’ll just continue talking and hopefully, this will help somebody.

JS: Fair enough. Thanks.

CS: Thank you for the question, Jeff. We’ll go with OwenF. Owen, are you there?

Owen is not on, it looks like. We’ll skip Owen.

OwenF (OF): Hello.

CS: Owen, are you there?

OF: Casey.

CS: Hey, Owen. Where are you from?

OF: I’m actually from Canada; just north of Toronto as well.

CS: Oh, great, great.

OF: I’m just wondering if you’re still getting — I’m assuming you’re obviously getting harassed by CashCall — what kind of tricks are they trying? What kind of stuff are they pulling? Let me know.

CS: Sure. Let me address CashCall. You know, it’s funny; I guess CashCall has something about it that a lot of people are interested to see what they’re doing to me. I guess it has a reputation out there. I didn’t realize this when I was getting into the loan with them.

Basically, so far, it’s been just phone calls. I’ll say they’re more persistent than other lenders in terms of calling. They call me pretty much every day. I get a lot of calls, so I don’t know which one is calling me. If it’s an 800 number, it would say “Undisclosed Caller ID” on my cell phone; I don’t answer it because they just keep calling me. Even after I talk to them and tell them my situation, they still call me. They basically want their money, and I don’t blame them.

Here’s what’s going on with CashCall. Yesterday, I talked to somebody from there who’s assigned to my account, and he was trying to get me to please make one payment and work out some kind of payment arrangement. I wasn’t quite ready to commit to a payment arrangement, because I’m still not sure about how much money I’m bringing in per month, even though I do have some jobs coming up here with consulting and all that.

So I wanted to get a little bit extra time with them, and he said I’ll have until the 23rd. I said, let me call you back and discuss it with my wife. Then he cut me off and said, that’s it, we’re forwarding your account to their legal department. So I’m not sure if that’s just a threat, or if something bad is going to really start happening here. I’ll definitely keep you updated to see what they’re going to do now. Apparently now, they’ve lost their patience with me, and they’re going to try and collect.

Thank you, Owen. We’ll go with the next person here.

Gordon Sanders. Gordon, are you there?

Gordon Sanders (GDS): Hey, Casey. Calling in from Dallas. One of the things I was just real surprised about was — I know the area that you bought the house in, and nobody in Dallas has garage conversions. I’m just wondering what were you thinking?

CS: That’s a good question, what was I thinking buying site unseen? That deal was actually brought to me by a wholesaler, and a wholesaler’s a guy that goes out there, finds a deal, puts it under contract, and sells it to somebody who actually going to be doing the rehabbing and fix-and-flip, such as myself. The guy really described it in such a nice light. I know I really fell for it. I don’t think he meant bad, because he was new at it, too. He had only been in on a few deals in the past.

He described it in such a way that made it seem like a really good deal on paper with the numbers, but when I went out there to see what it is that I bought, I realized this was a problem house. I don’t know if you’ve been on that street or not. That street has a really nice street, and this seems to be the one with problems. It’s had foundation repairs in the past and other — it had a stigma. The whole neighborhood thought it was a problem house, and I didn’t realize the garage conversion was going to hurt the value so much. That was probably the top gripe that people had when they were looking at the house, aside from the road noise and the weird layout. Everybody said they would much rather would have had the garage.

That’s one of the lessons I’ve learned: a garage conversion does not add value to the house, normally. Even though it gives extra square footage — if it’s done correctly, it gives you living area — the fact that you don’t have a garage takes away the value; so it’s a wash in the end. And usually, it makes it harder to sell. That was definitely a learning experience for me, and something that I’ll never do again.

GDS: I guess this is one of the one houses that you down a lot of money.

CS: Yes. Well, relatively speaking. I only put down about $30,000 or so, because the hard money lender gave me a loan at 65% LTV, but that was future value. Does that make sense? I told him once we fix it up — we had a appraiser that gave me a future value appraisal, and so I only had to come up with a little bit of money. That $30,000 actually came from a cash back — from another deal. So it was really still a no money down deal for me.

GDS: No; see, that’s the problem. The $30,000 was not money that you earned. It was money you stole from Peter to pay Paul.

CS: You know, I’ll agree with you. Doing no money down deals, man, it can really get you in trouble. Here’s the thing: you don’t really have any skin in the game, and I found this out from personal experience. People that do no money down deals are much more willing to walk away from a deal than the guy that has hard, and his own, cash in the deal. Yeah, I’m an example of a guy that went out there and loved the idea of no money down, and actually put it to use. The problem was, I also made some mistakes, and now you see the pros and cons of doing no money down. You have to be very careful with that strategy.

GDS: Keeping with this same question, you say you had $30,000. It would have cost you so much less to have flown out before you had dropped $29,000 extra money for a $1000 plane ticket.

CS: Exactly. If I was putting my own cash down, I would have been a lot more careful. That’s what happens when you have a real down payment. Anybody out there who’s looking to do a no money down deal, I say, you have to be careful. Don’t treat the no money down as just a free deal for you.

GDS: But Casey, I think that’s why everybody upset about you; is it was your money. You treat it like it wasn’t, but it was your money, and that’s still, I think, why everybody is so upset at you. You’re treating — it’s like its Monopoly money to you. It doesn’t exist. You’re not paying it back. I went back and reviewed a lot of your website last night, and you’re saying wanted to pay the money back; you swore you were going to pay the money back, and now, you’re walking away.

CS: I understand the frustration. I definitely do. That’s why I’m trying to do what I can in order to find a solution to pay it back and settle. Instead of just declaring bankruptcy when I first started this thing, I started looking into doing a short sale, or doing a wraparound, or doing something in order to pay the lenders back. I really could have just stayed quiet; not write on a blog; and just do BK and start from scratch. But I thought, at least I have to put up a fight; find a way to pay that money back.

GDS: But you weren’t fighting. You just kind of hid. Hiding’s not fighting.

I understand your situation. I’ve been in similar situations, and I think a big problem that people see, also, is that you owe all the money, but you’re going off and doing other things. I like Starbucks. I spend five bucks at Starbucks probably four times a week. But the fact is, whenever I owe lots of money to lots of credit cards, I don’t go to Starbucks. I have to make my money; I have to save my money to make that rent payment; to make that mortgage payment; to make the credit card payments; and I don’t go off doing crazy stuff, because I have an obligation.

A lot of the things people are wanting to know is why you’re doing all of this stuff whenever you don’t have the means to back it up.

CS: Sure, sure. I hear you. Well, I’ll put you on mute because I’m going to get the next person. Let me go ahead and — I’m sorry; I cut you off.

GDS: No, go ahead.

CS: I’ll put you on mute because I need to move on, but I will address the question of frivolous living and spending money on In-N-Out and Starbucks and Macaroni Grill. A lot of people have an issue with it. If you actually look at what I was spending on, and you focus on an occasional Starbucks, of course that’s the idea you’re going to get.

Yeah, true, maybe I could have cut out Starbucks completely. At the same time, I’m under that belief that, yes, I do need to save money, but at the same time, if I save so much to where I’m eating ramen every day, or never give myself an ability to go out and buy a Starbucks, then life is not going to be worth living at that point.

I’m not going out every day. This is something I still want to do, is find all the transactions and be able to show people the percentage of my money that went toward living expenses, or the so-called frivolous things. Even the Hawaii trip that I took last year — that was an anniversary. We haven’t done anything in a while, my wife and I. We had an opportunity to visit my brother, who was out there, and we saved money by staying with him. Yes, we do do some of the things that people get upset about, because they say maybe I should just do nothing at all. I like to have a little bit of balance in life, so then I would be more motivated to do something.

In terms of some of these transactions — it’s funny; it just so happens that that day I posted the Wells Fargo statement, that’s what people focused on. If I was to post all the other ones, I’d think you’d see the true story. I do appreciate that question. Perhaps I could be cutting down on my expenses more, but I’m also making money. It’s not like I’m still living on credit cards. You have to keep this in mind; a lot of people assume that I have no income coming in. I am making money. It’s not enough right now to be making payments on all the credit cards.

Perhaps the argument is maybe I should at least make one payment that I can afford, but right now, I’m just having enough coming in to pay my living expenses and a little bit extra left over so I can save and be able to have a little bit of reserves, while I’m working out a plan for repayment, or bankruptcy.

Honestly, at this point, the situation is so severe. If you look at my unsecured debt — and I’ve tried a bunch of different options, or at least I looked at a bunch of different options — I’m not sure what I can do. I’m still keeping my options open, but bankruptcy is definitely a possibility at this point; a very strong possibility.

We’ll go with the next person here. Jay Lathan? If I said your name wrong, I apologize. Go ahead, Jay.

Are you there, Jay? Jay Lathan?

Okay, we’ll go with — let’s see; we’re going to scroll back up to the top here.

Steven, we’re going to give you another shot. Steven, are you there? StevenCody?

SC2K2: Hi, Casey. First of all, I have to tell you: I think this podcast isn’t going super-well. I think you need to start going through questions quicker and answers quicker —

CS: Sure, sure.

SC2K2: – It’s kind of boring listening to you drone on. A lot of it we’re familiar with. I know you’re trying to sell yourself, and you’re a talker by trade, but let’s keep these things quick. In that nature, I’ve got a couple quick questions for you.

CS: Okay.

SC2K2: What salary would you settle for, if it meant working a minimum of 40-50 hours per week and cut significantly into your real estate time? I’m sure there’d be some price you’d be willing to do that for. What would that be?

CS: I guess it depends on other that salary, because I like to look at the entire package. We’ve got benefits; we’ve got how flexible is the environment — let me tell you, flexibility is the biggest thing for me. Even when I was working at Pride Industries, being an entrepreneur-driven person, I was always doing something on the side, and it was a real challenge for me to keep it contained. Obviously, when I get excited about a business, I go all out. You saw what happened with the fix-and-flip business.

That’s why I ended up quitting Pride Industries. It was a great job with good benefits. I was doing PhP programming, but the real estate thing started to take off. At that point, I thought, I’ve made it. I had all these deals coming in. But I took too big of a risk. I should stayed at that job and worked on the side.

SC2K2: Let’s say I offered you a job. $150,000, full benefits, full 401(K), but you had to work full-time, and there wasn’t the flexibility to do the deals. Would you take it?

CS: You know what? $150,000? In Sacramento, or like San Francisco –

SC2K2: Yeah.

CS: — Where the cost of living is higher?

SC2K2: Sacramento or San Francisco.

CS: Man, that’d be a really tempting offer. I would still do deals on the side, but if I could have the agreement that I can take my lunch hour and have flexibility in terms of being able to take a few days off from time to time, even if it’s unpaid, then, yeah, definitely. I’d strongly consider it. I’d talk with my wife first, of course. But, yeah.

SC2K2: Okay, because I just wanted to get a feel of what you were looking for, what kind of salary you’d work for. Another question I had for you; that picture of your dinner at the Red Lobster. You said that you don’t drink, but there was a beer next to your dinner. What’s the story with that?

CS: Oh, really? I said I don’t drink?

SC2K2: Oh, yeah. I was under the impression that you didn’t drink or use drugs.

CS: I like to take of my body, you know. I stay pretty healthy. I drink wheatgrass shots and juicing and all that stuff. But I’ll enjoy a beer every once in a while. I don’t like to go too much, because alcohol does mess up your body in large volumes. I don’t need to give you a talk on all that. I like to do everything in moderation –

SC2K2: Oh, that’s good. I was under the impression that you didn’t drink at all. That makes perfect sense. I know you said you don’t believe in failure; it’s just a way of succeeding —

CS: Yeah.

SC2K2: — But I see you in the real estate industry, like, if you were trying out for an NFL team. I don’t think you’re going to make the Oakland Raiders. At what point are you going to just say, ok, I failed for x number of years, I’m going to give this up and do something else and find what I’m really good at?

CS: Well, that’s a good point. Is real estate not something I should even be doing? Do I not have the skill for real estate? I’m not sure; maybe I just need to find my niche. I don’t think you can say the whole industry’s not for a person, just because they may not have the follow-through, for example, to do a fix-and-flip from start to finish; or the construction experience, which I lacked, which really contributed to my failures.

There’s other areas of real estate I can probably do, maybe more successfully than some of these other things. And who’s to say that if I do this all over again, I wouldn’t be able to do a successful fix-and-flip, not that I’ve seen what it’s like to do those? The eight properties that I’ve done wasn’t like eight different deals. To me, it was like one successive deal after another. I was really buying the properties at one point, just to float the prior bad deals, so it was really just a continuation. If I was to start all over again, I’d be super-careful; or at least, super-careful for my personality.

SC2K2: Have you ever seen the movie Glengarry Glen Ross?

CS: Ummm, no.

SC2K2: You should really rent that movie.

CS: Oh, yeah?

By the way, besides real estate, I’m also looking at other opportunities. With this exposure I’ve had, I’ve made a lot of interesting contacts in different industries, not just real estate. I’m talking with a gentleman in Southern California who’s a silver broker, for example. The silver and gold and precious metal market right now is on the rise, and whenever there’s turbulence, or any kind of a war, or anything crazy with the economy, that’s a good place to put your money. I’m definitely looking at that.

I’m looking at stocks, but individual stocks, not mutual funds — the performers, the companies that are about to take off, that you’re able to make some money; for example, with penny stocks. Again, it takes a lot of expert knowledge, and it’s something I’m not just going to jump in lightly.

SC2K2: Casey, I’d stay away from the penny stocks. You make me want to dump my precious metals as we speak, but –

CS: (Laughs) Do you have some precious metals yourself, Steven?

SC2K2: What’s that?

CS: Are you invested in gold and silver?

SC2K2: Oh, yeah. I invest in a lot of stuff.

One other question I had for you. What type of work is Galina going to get into? You said she’s quitting — she’s going to work. What’s she going to do?

CS: Right now, we’re still trying to figure that out. Right now, she’s helping me tie everything up for taxes. We’re definitely looking to bring her on board to be producing some income, too, so we can get on financially stable ground here. I’ve been really financially messed up for way too long. It’s beginning to be a huge problem for us, and it’s affecting our marriage. It’s affecting all areas of my life.

Immediately, what she’s doing is — I have a ton of stuff and transactions to go through from 2006 in order to finish for taxes, and the timeline is approaching, and I want to make sure I do it. Based on my initial conversation, it doesn’t look like we’re going to owe any taxes, because I had a ton of expenses, and not much profit. The deals that didn’t close last year in 2006 — even though I took cash back in some of them, until I sell a property, that’s really not profit; it’s just part of the loan. So, the only ones I’m really going to be looking at for profit — I only sold, I believe, four deals, and had one that got foreclosed on in 2006.

SC2K2: One other thing. You know that $50,000 Countrywide note; that was the reason that the bids started so low on that property. You’re still supposed to pay that back, regardless of whether or not a short sale occurred.

CS: Oh, yeah? Are you pretty sure that I owe on that one?

SC2K2: Everyone’s pretty sure of it. Other sites — I know you call them “hater” sites — lawyers have looked at that. You signed a legal document. You scanned it in. Everyone’s gotten a chance to look at it. There’s no ambiguity here. That’s why the sale occurred at a lower price. You’re still on the hook for that $50,000. Whether or not you want to pay it; or if you’re going to pay it; or whatever; that’s your business.

CS: Sure.

SC2K2: It’s not something you can just disregard.

CS: That’s a good point. Now, I haven’t heard anything from Countrywide about that loan, and it’s been well over a month now, that I was supposed to make that payment. Another thing is, the letter that we received, that was a short sale approval, referenced that note as part of the approval. So, after looking at it again, and talking to some people that know what they’re talking about, from what it looks like is they were doing that just so I could get the thing approved. It went to foreclosure, and to me, that note is not something I’m going to pay on currently, because I have a bunch of other debt. Now if they come back and say this is a valid note, that I’ll definitely look at it. Right now, I haven’t heard anything about it.

SC2K2: I understand the reason they had you sign that is because that way they can put it on their books, and it looks better, rather than just an out-and-out default.

CS: Yeah, that’s true.

SC2K2: Another question –

CS: That property on Larchmont was the worst deal I’ve made. I paid so much for the — even when I was buying it, I thought, wow, this is kind of a high price for this house. Now, that particular property was actually put together for me. It was a package deal; it had the cash-back-at-close built-in. Really, that was too big of a carrot for me to forego, because I had all these other properties that were getting ready to default on, and I thought, oh, man, I just need this deal; I can catch up the other ones, resell everything, and be okay. I was definitely thinking out of desperation at that time.

SC2K2: Yeah. I think flipping a sucker’s game, to me. You put 20% down if it cash flows, and you leave it at that, and you rent it out.

I’ve got a serious question: if you were to go to prison, what would your strategy be? Would you use your Russian ties to hook up with those —

CS: (Laughing)

SC2K2: — Gang, or just kind of keep to yourself?

CS: (Laughing) Russian ties — interestingly enough, I don’t have very many Russian ties. Ever since we came to America in ‘94, our family, instead of staying in the Russian community, we mixed in. We had American sponsors that took us under their wing. Unlike other people that came over from a former Soviet Union, we didn’t have any governmental assistance — no food stamps or any of that stuff. We really had it tough. My dad had to work odd jobs, and things like that. From an early age, we were pretty set on doing whatever we can to survive. So maybe that’s where my entrepreneurial sprit is coming from.

In terms of jail — honestly, people keep saying I’m going to jail and all that. You know what — it’s probably a possibility out there, but if I live in fear, am I going to be productive? No. People say I should run away to another country. What use is that? I’m just going to continue living my life, doing the best I can, and hopefully, my story can help somebody. I’m not too worried about jail.

SC2K2: Another question. We’ve all gone over Starbucks, Jamba Juice, Macaroni Grill — that’s all old news. What’s your favorite chain restaurant right now? What’s going to be your new hot chain restaurant?

CS: I haven’t really seen anything new that I’d go for, but something that’s fairly new is Chipotle. I don’t know if it’s a national chain or not — Chipotle. I love it, because they have naturally raised beef, and I love all that organic stuff. I think they have naturally raised pork as well. If I’m in the mood for fast food, that’s where I’ll go.

By the way, I don’t go to fast food every day. You’ve got me talking about it, and everybody’s going to jump on me now, saying that I dine out all the time. But I figured I’d address your point.

Steven, do you have another quick one, because I want to move on, and get a couple more people on.

SC2K2: That’s cool. I’m trying to keep the spirit alive. I’ve done a lot of work in radio. I think, if you want to keep doing this, you should do it weekly, add some sound effects, get a co-host, and run through things quick. Don’t drone on. Keep it to, like, 30 seconds to 1 minute, and keep things moving.

CS: Sounds good. Let me take that advice and try it with the next couple callers. How’s that?

SC2K2: All right.

CS: Okay, thanks. We’re going to go back down to GordonSanders. Gordon, are you there?

GordonSanders (GDS): Hey, Casey. Just to let you know about the Chipotle; are you getting the salads, or are you getting the whole burrito?

CS: I like the burrito. My wife had wraps, but I like to have a package that I can bite into.

GDS: Just to let you know: the whole burrito is about 1200 to 1300 calories.

CS: I’m not too big on calories. If you’ve seen my pictures, I actually need calories. What do you think?

GDS: Yeah –

CS: I used to lift weights. I used to be about 165 pounds. For 5′8″, that actually makes a big difference. Ever since I got married, I lost weight, because I stopped lifting weights. Things change when you get married. Also, all this stress — I’m probably at the lightest I’ve been since high school. So eating some extra food is probably good for me.

GDS: On to the ski trip, that appeared/that didn’t appear. How’d you like Heavenly?

CS: I actually went to Alpine. A couple of people told me I better not even talk about it because it continues to make this image of me as a frivolous spender. Let me address that really quick. Might as well, because people saw thing I put on IAmFacingForclosure.

I had a friend who actually paid me because I did a favor for him — helped him with some stuff he was doing, consulting-wise — and he actually treated me to a trip. I stayed in this cabin, and he paid for my lift ticket. I just had to get there. I was running a little late, so I was speeding on the freeway, and I was coming down a hill, and I normally don’t speed too bad — just a little bit over the speed limit, like stated income loans, don’t state too high, within reason — then I get caught. I didn’t do my negotiation too well, and she gave me a ticket. But I’m glad that my record is pretty clean, so I’ll be able to do traffic school. Do you have anything else, Gordon?

GDS: Back to the fact of you saying that you shouldn’t lead a normal life, but you owe lots of money to everybody. I think, like you said, what everybody’s upset about is that you can’t lead a normal life, because you’re not making your — you say you’re making your personal expenses. Your personal expenses are all the money that you owe. It’s not the money that you choose to pay back; it’s all the money that you owe. Whenever you owe money to somebody — like let’s say you borrowed money from me, and then I saw you eating a steak dinner, or eating out, or eating at Starbucks. I’d be pissed at you.

CS: Yeah. No, I hear you.

GDS: Because you owe me money. Why are you going out, when you could be handing money to me? What everybody’s seeing is that you owe lots of people money, but you’re choosing to pay back people — choosing to pay nobody back, but still spend money on yourself that no one else that owes that kind of money spends. You don’t have the right to do that.

CS: It’s a good point. It keeps coming up; apparently, a lot of people are frustrated by that, because if you were the lender, how would you feel, right? I understand. I’ve actually been in that position where — in fact, somebody owes me $5,000 from a deal we’ve done in the past, and I’m wondering what they’re doing with their money, so, I kind of know what it’s like to be a lender.

At the same time — Gordon, do you have a business or have you run a business before?

GDS: I’ve owned many businesses in the past. Now, because I didn’t like how much time it took up, took a full-time job that has lots of benefits. I’m able to do stuff; taking lots of ski trips. But I like having the steady pay, and at the same time, I do have the opportunity to make money while owning a business, but I made a choice — but I always try to pay my bills.

CS: Let me get to what I’m trying to say. If you own a business, and your business borrows money for its operations, and then something happens and the business fails, do you think it’s the same kind of analogy, where the bank that lent the money to the business for business purposes is going to think this person’s still living a normal life, but he has this huge amount of business debt that they need to pay on that. The thing is, I see it as a separate thing.

My business borrowed all that money. Sure, I personally signed for it, but at the same time, at this point, my business failed, and I’m not sure about what I can do about the business expenses. For me to catch up all those loans would take thousands of dollars I don’t currently have. The only options I have right now is to refinance all that debt. So let’s say I have an extra $50 this month. I can’t just call up one of my
creditors and say I’ll just pay you guys $50. That’s not going to cut it. It’s still in default. Some of them won’t even take $50. They want the full payment, or they’re going to continue with their collection process. So unless I have a way to actually stop the whole collection process, what does that $50 really going to do? Tell me.

GDS: It’ll buy you peace of mind that you tried. It’s peace of mind that you tried; that’s the whole point. If I can’t pay you all of this back, I’m going to at least pay you something. You don’t want it, hey, it’s on the table here, anyway. Think about if you went out to a meal, and you wanted to pay for dinner. Your friend says no, dude, you paid every time. Let me pay. So what do you do? You leave the $20 on the table. If he wants, he’ll take it, fine. If he doesn’t, fine; but you paid, and you feel better about it, because you’re a man.

CS: So you’re saying the best thing for me to do, and you’re saying the right thing to do, is whatever I can scrape up every month, even if it’s $10, I should try to figure out which lender to send it, and go ahead and send it.

GDS: Yes. I’m sure the rest of your callers — ask them what they’d say. That’s about all for me right now. I’m sure I’ll have another thing in a moment.

CS: Thanks, Gordon. I tried to keep it going faster, based on the advice from Steven. We’ll try it again. That was a good question.

All right, we’re going back to GeorgeBush. George, are you there? GeorgeBush. GeorgeBush is not around, I guess.

Going to Suzanne. Are you there, Suzanne?

SUZANNE: Hi, Casey.

CS: Hi, Suzanne. Good to have you. Where are you from, Suzanne?

SUZANNE: I’m calling from Kansas City.

CS: Great, great. What’s your question?

SUZANNE: Okay, first, before I ask my question, I just wanted to say, aside from my mortgage — my regular mortgage payment every month, I only have a total of about $3000 of debt, which I know will be paid off, probably within 5 or 6 months. But, even with that very minimal amount of debt, I just — first, before I go any further, I couldn’t even imagine going to Hawaii, even if it was just air fare alone, because I would be thinking about all those mortgage payments that were due, so — I couldn’t do it. I just could not knowingly purchase an airline ticket. I know you said you were fortunate you had family over there, but it’s all about priorities. I just wanted to throw that in.

Let me tell you my question here —

CS: Let me do a quick response. You’re absolutely right. When we were out there in Hawaii, I got jelly. I couldn’t relax. Looking back on it, I don’t know if I would have made that same trip, because I’m thinking, oh man, this thing is taking more money than I thought. Because you know how you always think that maybe — or maybe you don’t — but sometimes I think that I could save some money, stay with a friend, and then it’s not going to be too expensive.

But you know what? When you go to Hawaii, everything’s expensive, so it ends up costing me more than I thought. So, yeah, I had that pressure in the back of my mind.

SUZANNE: Okay. What I wanted to ask you was, what is in the pipeline? You mentioned Utah for a couple reasons; your recent Utah trip. I know we went to — I believe — check on your property there, but you mentioned a new money partner, and I was wanting to know what was going on with this new money partner, and if you have anything going on, and if so, what is it?

CS: Sure. Let me address that. The Utah trip was a couple of different reasons. Probably the main one was we had some deals we were looking at with my money partner. Those deals — unfortunately, I can’t talk too much about it. He strictly asked me to make sure I don’t reveal his identity or anything we’re doing, because, honestly, the way that people have been acting out there, digging up everything they can on anything I’m doing, can definitely compromise a deal. So I can’t really talk too much about it, but I do want to tell you that I’m still working with other investors who are doing deals, and helping them out with my connections and/or any limited expertise I’ve gained; and whatever I can, in order to maybe make a cut or consulting fee. I’m trying to make money any way I can.

SUZANNE: So you’re doing that by how? You’re making a fee, based on the resources that you’re referring them to?

CS: Yes. If it’s a deal I’ve referred over, then I might get a piece of that deal — piece of the profit. If its
something more minor, it might be just a flat fee. It depends. As long as it’s a win-win, and the deal is sweet enough for there to be enough juice in it for everybody, then that’s fine.

SUZANNE: Okay. Casey, I gotta tell you. Be careful with those two words. I know you’ve gotten a lot of slack from it, but the “sweet” and the “juice.” Dude, they gotta go. (Laughing)

CS: Oh, you don’t like those? You think those make me sound — someone said that those make me sound young or immature, and all that. At the same time, it does create a pretty interesting response from people. Next thing you know, they’re saying the words back to me.

SUZANNE: Yeah. Let me throw in one question, and then I’ll let the next person have their few minutes here. Suze Orman — that just came up on the website, and I wasn’t sure what was happening with Suze Orman — are you going to be on her show?

CS: Yes. But they said, don’t say too much on a blog. Wait until the show airs. Yeah, it’s going to be sometime in April. Early April, I’m going to be on there. It’s not going to be a real major piece, but I’m definitely going to be on there. As soon as I find out the exact date, I’ll announce it.

SUZANNE: Are you going to be a guest on the show, or are you going to be one of the call-ins that she takes?

CS: I’m just going to be a call-in, so I’m not going to be actually right there in the studio. It’s going to be a remote call-in.

SUZANNE: All right. Well, thanks, Casey. I’ll let you go on to the next person.

CS: Sure, Suzanne. Thanks. Okay, we’ll try Rupert again. Are you there?

RUPERT: Yeah, I’m here. Hi, Casey.

CS: How do you say your name?

RUPERT: It’s John.

CS: Oh, okay. That’s just your username. That’s what I figured. John, where are you from?

RUPERT: Seattle.

CS: All right. John from Seattle. Go ahead with your question.

RUPERT: I’m just curious, with all the stress you’re going through — obviously, you mentioned there was some marital strains there. Are you guys doing any type of counseling, or any type of activities to right the situation there? Obviously, you’re not the only one having stress. Marriage is a partnership, and obviously, she has to be feeling [inaudible] just want you opinion on that.

CS: Sure. Let me address the marriage stress. It’s been easier than a lot of people think. They think we’re on the brink of divorce and all that. That’s probably what happens to a lot of couples who are facing foreclosure or big financial problems. Fortunately, and I’d like to say I’m blessed in this regard, she’s been very supportive, considering what’s going on.

At the same time, we have had our issues. We do fight about money quite often, but lately, it’s been better. We’ve had a lot of rocky times early on in our marriage. we married young; we were both 21. There’s some pros and cons to marrying young. The pro was, since we did and we’re still together, those early couple years really refined our marriage, and now we’re able to go through the financial stress — time in unity, more or less.

RUPERT: Okay. Good luck, bud.

CS: Thanks, man. Okay, we’ll go with JayLathan again. I guess they’re not there.

We’ll go with SashimiYum. Are you there? Sashimi? You know what, I like sushi. This is making me hungry.

All right, we’ll go to the next person. We’ll go with MSCLTV. Are you there?

Okay, we’re not there. We’ll try you the next time. We have a person by the name of TShoe2007. Are you there?

Nope. TShoe’s not there. Okay, my software’s freezing up on me.

Looks like it’s coming up to an hour; I’ll probably go for another, maybe, 10 minutes or so, and, unless we’re going to have a lot more questions, I’ll probably going to start wrapping it up. I don’t want to make it too long. We might try this again in the future.

I think I’ve addressed a lot of the things on this podcast - livetalk, which will end up being a podcast, once it’s converted to mp3.

I’d like to just tell everybody that we have some exciting things coming on this blog. Even though my story is coming to an end, what I’m looking to do with this site is really take it to the next level and become the premier foreclosure resource and help site. I feel that would be one of the best contributions of my story is to help others. Of course, to make money out of it, it’s got to be sustainable and profitable. So, that’s what I’m looking to do. There’ll be some announcements to come, probably tomorrow or the next couple of days, on future plans.

Looks like my software is stuck on me, and I’m not able to select any more people.

Thank you again, everybody, for asking questions and listening in. There’s probably things I haven’t addressed yet, but I think this is a pretty good one. Talk to you guys later.