All Forum Posts by: Andrew Barrett

Quote from @Ben Firstenberg:

For this, even though it's on the smaller side, I'd still use a cap rate.

Rough numbers: $600/unit/month income --> $450/unit/month after expenses (?) * 6 units * 12 months = $32,400 NOI.

Given this is a mobile home park, I think a cap rate around 8-12% is fair. Depends a lot on the condition and location. So value of around... $270k-400k.

I'm curious how you're calculating $165k. But if this property is available for 200 I'd be really interested. If you don't buy it maybe I will! 

Most properties like this sit around 9% and then I did 0.6% (conservatively) to get a round income number 

but it’s mostly scary that they are all 1980s and 5 of 6 need fully renovated or tore down. If I could pull off selling them to tenants instead of renting to eliminate maintenance… then I’d be all in but I’m not sure if that’s actually feasible. 

I could do 20% down on 8 new ones at about $80k per double wide or $65k per single to get to $1200-1300 a month per on doubles or $900-1k for singles. 

it interested me because at $200k-230k that he wants- I don’t think I could buy a similar lot, do 8 septic systems, 8 water/elec meters, and 8 pads for under that price. (Mostly the land)

 
and worst case I rezone it to what all the surrounding lots are and it’s probably worth 3x.. or it might work for townhomes/multi fam in the long run 🤷‍♂️ definitely doing my dd on it. Environmental health indicated that the septic tanks are 4/6 1987 and 2/6 2001 but there is sewer to fall back on

Help! I want to give mobile home parks a try. I already buy land and set up new mh to sell.. but trying to get into this.

Off market-

8 lots 

0.25 acres each. 

6 lots have 1980s mh on them (3 bed)
1 lot is rented (camper)

1 vacant lot —-

All 8 have pads, septic, water meters, and electric meters in place 
sewer at the street… (small industrial/commercial area)

$600 per mh but they are shot. 

Not sure how to value you it. A random agent told the guy $200k all day 3 years ago but my numbers show $165k max max… 

(I am also a mh dealer in the area so I could do brand new homes for $60k-70k each- set up/delivered) 🤔  could even owner finance the existing homes for $5k down and $15k loan - 18% interest… 5 year term (300 lot rent and around 350 payment so their “payment” each month wouldn’t be much higher than their rents …then maybe I could turn the park over in 5 years when those terms end (or as pple leave..etc)

I own a few rentals but 6x600x12 doesn’t sound bad with a 200k investment but 🤷‍♂️…

Quote from @Jorge Hernandez:

Does anyone know/ familiar with retirement home investing/ assisted living investing?

 Still looking for help with this? Let’s discuss - I’m looking to buy one in north ga but I’d need a partner to run it or a manager… it should be making $50k net net a month and they are making $15k because poor owner manager /management in general and needs 10 more beds approved to get to $50k a month  but the owner of the building has done all the work- just needs the applications done.. 

Quote from @Priya Srinivasan:

I'm borrowing money from a private money lender to close on a quadplex. He mentioned he will transfer the money to my account and not the title company. Is that okay? Also this is my first time with private lenders. What should all I check or verify before signing? Thanks in advance.

How did this turn out? Very curious…/worried

Hey man. How is this going? 2 years later 

Originally posted by @Joshua McMillion:

@Andrew Barrett

Congratulations on your success in RE at a young age, and it's commendable that you also want to help educate others. The individuals you are speaking with have different goals, and I would first start by asking what their exit strategy will be with their homes. If they express, they would like to sell under 10 years, that could be an easy way to explain that mortgage rates are at a historic low, which comes with leverage. 

With mortgage rates being significantly low, a 30 year fixed mortgage allows for higher cash flow, given the principle and interest payments. However, if their goal is to purchase this home and not scale, a 15-year mortgage may be better. It depends on what they are trying to achieve. 

Sincerely, 

Right right, they want to scale but at year 13-20 

one used a similar plan as mine but they pay off the 2-3 a year at year 15-20 exponentially as more get paid off but eh. I can cash flow about $300-500 a month per rental at 30 years  pretty consistently and on a similar deal they are breaking even or losing a little money at 15 years.
 

But I definitely agree with what you’re saying - to each their own in this game. Mine is a little more aggressive especially in today’s ridiculous market but for now I’m only doing great deals and holding the rest in a pre-tax self directed account to be used later for real estate if the market dips or drops.

Ex. I’m trying to buy an $800k 4plex  that’s worth 900k all day w/ no repairs/changes to the rent etc and I’m doing 20-25% down. It cash flows $1700-1900 a month (1550-1650 a unit) at 30 years or exactly breaks even at 15 years. For now I’d rather take the $ on hand and it still appreciates 5-6% a year because where it is. It went up 11% in the last 12 months 🤦‍♂️ (should of bought then) but it kinda sucks because the owner bought it for $171k-190k in 2010 lol

Thoughts?

I am trying to explain that because I’m 25 and make $200k-250k a year (mostly from flips) that using a 30 year mortgage on my 1031s for the 2-3 rentals a year— makes sense?

they are insistent that 15 years is infinitely better and not even in the same ball park as a 30 year loan. 🤦‍♂️ 

In what way can I explain this to these people (mentor, other local investors that I have weekly convos with, and some friends that aren’t super investor savvy)

(goal/action:I am trying to buy 3 single family or small multi fam properties a year -rentals — I buy on avg- 5 flips a year and avg 35k profit per deal consistently because my method is easily repeatable/similar properties etc— I make 75k+ selling real estate and about $150k-$200k doing those 5 flips

^ and I 1031 at least 3 of those)

(my thought is- I have a lot more opportunities with a 30 year 20% down conventional loan...than 15... my break down of why I feel that way just doesn’t make sense to multiple people despite obvious key factor but mostly because they were either taught or learned the opposite early on In their own personal investing strategies/planning. Note: they are 23 to 59 so I’ve tried videos, calculations, and writing out specific deals... am I missing something? And yes I know it varies by plan and really isn’t that different in the grand scheme for most people ....but humor me

North ga - student rentals. I have 35 quads I’m working on selling. Some are nice and updated and some are pos that need 50k-100k rehab. The nice ones Pull $750 a unit as a standard rental or they are 2 bed 2 bath so could rent to students for $450-500 a room (450x8)

My company does property management (8%) and you should cash flow around $1200 a month or worst case $800

0% vacancy

Less completion in pricing Bc under 5 units.

300k-400k for the nicer renovated ones (increase that rental number by about $200 a month) or if it needs work- maybe $200k-285k and put a roof and new flooring in and fix some leaks and still crush it (lower rents $200 overall and still easily rent them or fix them up and pull the initial prediction)

North ga - student rentals. I have 35 quads I’m working on selling. Some are nice and updated and some are pos that need 50k-100k rehab. The nice ones Pull $750 a unit as a standard rental or they are 2 bed 2 bath so could rent to students for $450-500 a room (450x8)

My company does property management (8%) and you should cash flow around $1200 a month or worst case $800

0% vacancy

Less completion in pricing Bc under 5 units.

300k-400k for the nicer renovated ones (increase that rental number by about $200 a month) or if it needs work- maybe $200k-285k and put a roof and new flooring in and fix some leaks and still crush it (lower rents $200 overall and still easily rent them or fix them up and pull the initial prediction) 

(cash flow varies based on purchase price- ball park but I could work a specific real example in greater detail/accuracy)

Originally posted by @Sean Barber:

@Andrew Barrett Hmmm, doesn’t seem very passive. I don’t have the time to manage poor quality property managers or any additional units. I have a proven system, just don’t have the time to grow it any larger right now. Looking for something more passive at this point.

Fair enough- I pay 8% to a property manager that has 58 single family homes under them and they handle everything. I haven't got a phone call or had any vacancies. :) They have pple lined up way before the lease ends and any other tenant issues are dealt with in the rental agreements immediately. I don't think i have been to my properties in a year, except for minor inspections that i really didn't need to do- i just wanted to double check the prop manager's work. They are also a real estate company so I expect perfection from them or i am on to the next and they see the long term goals - which is them managing all 10 of the properties i am lined up to buy in the next 2-3 years.

**I guess my only suggestion would be to invest in taking the time to hire the right managers if passive is ideal. Even if it means paying them more. If you want to be 100% hands off then work it into the deal and if it makes sense then go for it.

You could find a partner to do all the work and your contribution would be exclusively the money but i know that quality person is hard to find. I have helped a client w/ a partnership deal where he gave a trusted- hungry partner a $450k budget and said go buy what you can. We bought 6 homes and they split the cash flow 70/30 (about $5300 a month net) one guy collects 70% checks and the other invested his time in keeping them full and maintained but the 30% of something is worth it to him.