All Forum Posts by: Paul Choate

I currently manage 18 units and will be adding 10 or so this month. I don't have any software now other than quick books. I am looking to see what everyone is using, how they like it and what they recommend. Thank you in advance!

$12,000, youth and - I am hope- drive is bringing a lot to the table.

So what can you do?

ACT!

If your biggest worry is getting a loan, go apply for one! I was in the same place about 8 years ago. I did not have an income but had saved up cash while in the military. I did not apply until I was sure I would qualify and I wasted a lot of time as I could have received the loan years before. I missed out because I did not know what I did not know. I decided I would not qualify all on my own based on what I had read. I was wrong. Read and research and then go and talk to two or three lenders and ask them for a loan app and what the likely hood of your getting the loan is. If you are worried about the number of inquiries on your credit report, then don't actually give them permission to pull your credit. Just talk to them. They are in the business of making loans. The worst that can happen is they will say no, and I did that to myself.

Now, before you can do that, you need to search for a property that you would be willing to buy. Learn all you can on this board but the most important thing is to act. If you are turned down for a loan and all you can do is make owner financed offers, then make some! $12,000 is more than enough to get into a house. My first owner financed deal was $2000 down and about $3000 in repair costs. I would never have found it unless I was out talking to sellers. Even if you are turned down you will learn. I never had an offer rejected until I had purchased 4 houses. I left a lot of money on the table somewhere... 

Know what you can do and are willing to do because it will require sacrifice and hard work to start out with little. If you took your money and put it down on a new car; few people would be surprised. They might even admire you! If you buy a fixer house, everyone is going to think you have lost your mind. When you make mistakes, you need to be able to cover them with money or your time and often both. Know going in what you are willing to commit in time and money. 

In summary, what you can do is act now. You will learn from these experiences. You don't know what is out there until you try. You should get dozens of no's before your first yes. It won't be luck that helps you succeed. It will be acting, hard work and perseverance. That is how I started a little older and poor.

@Jean Bolger Thank you! It is a little scary at first. So far everyone seems to want to be helpful as long as I follow the rules.

@Jay Hinrichs I was confused about the cost as well. That was the number that was given to me by the previous owner and supposedly claimed by the engineering report. I have not seen it and I do not know everything the City is requiring before they allow me to hook up. They have sent me a rough outline by email and it seems very reasonable to me and should not cost anywhere near this number. 

I appreciate the partnership offer! I think I will have to stand pat on this one:).

The park is shut down. The old owners told everyone to get out in June of this year which was when the original tax sale was. No one bought it at the back taxes of $20,000+. The DEQ never shut it down, it was just an excuse by the owner. The DEQ officials say they will not allow it to reopen as is. They were actually surprised the old owner did not just connect the water to the city. My theory is that they had fallen behind on the mortgages (1st and 2nd @ about $350,000 each). They had run the park pretty far into the ground as only about 50 spaces were being used. With the mortgages, taxes and penalties it just was not worth it to them to put even more money into the water system. 

Since I got it basically for free, I can do a whole lot before I start needing to worry about the investment. (No one needs to freak out, I will be getting hard numbers and City and State approvals before I put any significant money in the park.) 

As an additional bonus- there are actually 16 abandoned mobile homes still in the park and I think I can fix up about 10 of them. I am just letting some lot rent accumulate before I run them through our State's abandoned vehicle process.

I will pm you tomorrow with some specifics to get your take. Thanks for the comments!

Update:

Funny thing happened while I was researching the water and waste water issues for the Park I am buying in a few weeks. I found and bought another.

New Park-

20 acres 100+ lots shut down by DEQ because of contaminated wells about 3 months ago. I heard about it on Wednesday and bought it at a tax sale on Monday for $9000. (Previous owners owed over $600,000 on the mortgage, $20,000+ back taxes and $70,000 fines.) All of that is wiped out by the tax sale and fixing the problems with the water (keeps the fines away).

I have met with the local and state representatives from DEQ. They want the existing wells capped and new water purchased from a local municipal water supply. I am meeting with the local municipality planning division on Monday to see what we need to do to connect to their system. I can still explore drilling new wells and am meeting with geologists and drillers to explore that much cheaper option. Not counting on it at this point.

Best case- I can connect to the existing water main which is currently about .25 miles away from the park and just purchase water going forward. This might cost up to $200,000 (based on previous owner's engineering reports). I am hoping to explore grants and other resources as there are other homes in the area which are all on wells that draw from this same contaminated water source. I think the out of pocket cost can be much lower if I involve the whole community surrounding the park and get federal or state grant money to extend the line. 

Worst case- I paid $9000 for a 20 acre goat/horse ranch on the edge of town with a lot of existing roads and riding obstacles!

First park- Everything is looking good. No existing problems. 

I will say that the environmental regulations for drinking water are no joke. I may have found a new niche to explore: finding parks that are not in compliance and jumping through all of the hoops to make them right. @Jay Hinrichs any thoughts would be appreciated!

Welcome! Good luck on your efforts. Learn all you can from BP. I wish I had this resource when I started.

I went to school in Norman and lived there off and on for 8 years. It is one the the best places to live in Oklahoma. I don't personally invest there because you are competing with a lot of retail buyers. However, I am comparing it with smaller areas that you probably would not consider because of the management issues. I would certainly recommend it in general- if you find a deal that meets your numbers. 

@Jay Hinrichs is it common for RV parks to have holding tanks? It is not very expensive to have a septic company come out and pump out a septic tank so that maybe a cheaper work around. How was your park set up?

@Jay Hinrichs The unused lots are separated off from the trailers and closer to the highway so I thought this might be a good use of the spaces. I will check the requirements as I can see the difference. Thanks again for the direction. I am exploring all options right now.

I have lived on them most of my life (just moved off of one). They are a negative (dirty car etc.) so you should take that into consideration on your ARV. How much is probably as individual as the buyers themselves and their personal experiences. That could be balanced out by the peace of living there. I would play that angle up. I would say that it is not a huge deal as someone who is buying this type of property is probably more concerned about a quieter area.

One last thing, make sure you know who is required to maintain it. Hopefully, It is the county. Sometimes it is the landowners and that can be a problem as there are rarely good associations in rural areas in my experience.

@Sara Cunningham Thanks!

@Katie Neason - update:

I have a fairly weird legal/family background. Long story short, a few years ago my father and uncle- who are both attorneys- got me involved in a lake development project. It did not pan out but I happen to have a lot of contacts and familiarity with the regulatory agencies involving water in this area. I am all over the issues from a policy perspective. I have been in contact with the state DEQ and spoken with their local guy who is in charge of this particular park's area. So far so good. There are no known violations but I will need to get spooled up on the monitoring as it has not been done on the correct schedule. 

Once, again thanks to everyone who alerted me to this issue. I think I may have found a niche I can work into as everyone else seems to want to run away from these situations (with good reason - you need to know what you are doing). 

Also, I ran into a potential project because of this trailer park and I will report on Monday about it. I don't mean to be mysterious. It is a potential deal that I need to get under contract before I disclose it. So, Thanks again, everyone!

@Jeff Wallace the best thing about this park is that I don't have to do anything right away. The cash flow is amazing and I plan to put most of it back into the park in the form of cleaning and repairs. Once the roads are in good shape and all of the trailers are maintained or sold, then I will put up a sign (there is not even a sign advertising spaces for rent). You can't even tell it is a park from the highway out front because of the overgrowth. Since there is a recreational lake nearby I have considered using the unused lots as R.V. lots for shorter term rentals. I will have to see after I get in there and can gauge the demand better. However, if I am just left with what is currently going on, I am going to be happy. I have about 20-25 years of active investing left before I need to  worry about exiting this park. I am born and raised here and I have not seen returns like these anywhere else. While this is not a growing area, it is not going down anytime soon as long as the oil holds. As I have studied the water and waste water issues, I can see I am not going to have any new parks to contend with anytime soon and this is the only one in the area. So, to answer your question, I am hoping a combination of improving the park, basic advertising and demographics will allow the park to reach its full potential.