23 Year old Mobile home and Apartment Investor from Chicago

[Alexander S.]

Hello BP! My name is Alex. I know just a few members around here (including JScott) from the Fastlane (where I am much more active). My user name there is the same as it is here.

A quick background on me: I turned 23 a few weeks ago, seller financed two mobile homes when I was 19 and I currently own a 3-unit apartment building on the North Side of Chicago which I bought in October.

I have more entrepreneurial interests than solely REI, but I am joining BP to collaborate more with like minded individuals!

There are threads on theFastlaneForum.com with specifics of all of my deals, but here is a quick highlight of the current state of my apartment deal (I will be starting another thread because I have a question on how others might address the basement renovation financing situation with the property):

Purchase: $210,000 (REO); 2-units rehabbed and updated by the bank, garden unit not yet finished but the framing is complete
Down 3.5%: $5,000 Earnest, $900 at closing (seller covered $7,500 in closing costs, also used to buy the FHA rate down to 3.25%)
Capex: ~$8,000 (Updated door hardware, amp service from 100 to 200, coin-op laundry machines, etc)
Location: 1 block from Brown Line in Chicago (great) on the North Side
Comps: Property across the street, similar layout sold for $300,000 in March (had slightly nicer finishes, unfinished garden unit)
Rent Roll: Unit 2 - $1,300 with parking (3 bed, 1 bath...currently under market since rented November 1st)
Unit 1 - $1,100 (live in 2 bed, rent one room at $550 and currently use one parking space worth $150/mo, renting out beginning next month)
Garden - $950 (2 bed, proforma for rehab; will cost $15,000-20,000 to rehab)
Laundry - $30/mo
NOI @ 45% (brand new water heaters, furnaces, appliances, etc): $17,030
PF Basement Reno NOI @ 45%: $23,430
As-Is Cap: 7.8% (yuck!)
ProForma Basement Reno Cap Rate: 9.8%

These are pretty conservative numbers....during ideal rental season the property should gross ~$3,700/mo ($44,400 a year) at peak rents with $35,000 ($240,000 including financing) all in on my end.

Hoping to 1031 or cash out refi in 1 or 2 years for ~$315,000 (7.75% cap) less Capital Outlay of $35,000 less bank debt I will owe of ~$200,000: $80,100 profit

Plan to roll that, plus currently saving all of my salary to put $150,000 down on a 30+ unit project and also obtaining two separate mobile home parks.

I apologize for the lengthy into, I tried to keep it high level or this would have been a novel!

Thanks BP team! I look forward to making new friends here and to helping each other earn and learn!

Alex

[Alexander S.]

Originally posted by Jon Klaus:

Alexander, welcome to Biggerpockets.. What's your time frame on the 30 unit and MHPs? Why both asset classes?

Thanks Jon.

Will begin hunting for the multi-family property in August most likely. I currently work in investment banking, so my hours are pretty intense. The apartment building may be anywhere between 20 and 50 units depending on how much paper sellers are willing to carry, my savings at the time and other factors. I will also need to choose a market I feel is trending favorably for a value-play.

As far as the "why mobile home parks as well" inquiry; I think mobile home parks are very attractive because when chasing un-marketed / not-for-sale parks, seller financing can be readily available. I will also get small-form diversification through the two asset classes. Plan on seller financing homes in the park as well (so I will need to spend some time planning around the SAFE Act and choose my state wisely).