All Forum Posts by: Paul Choate

@Mike H. wana know what I really think?

@Andrew Warner -They are individually metered for electric and gas. I supply the water and trash.

@La Nae Duchesneau - I will look into the rent increases. I think he has not raised them in a long time.

I get the not owning trailers as a general rule for the maintenance headache. Here is my situation. I have a strong back and a law degree. I don't have much capital. My strategy is to work my tail off for the next few years doing what others can't/won't do because I can.  I currently am running between 17 units scattered over a 20 mile radius. (My office is at the other end so it is no big deal as I do it every day.) If it is just the management headache that is what I can do now. I am hoping to back off the daily operations once I get big enough and my units are improved in quality. Right now I am basically working two jobs. This deal will double my units and my cash flow will increase by about 30%. I will work toward bringing in lot renters and I like the concept of owner financing the trailers, but in the mean time I need to maximize growth to reach my goals. In your experience, were the owners just focused on their returns as passive investors or where they actively managing their parks?

As for the maintenance side, this past year has been a dramatic increase for me as I found a partner with some capital. We have purchased 4 buy and holds and done two flips. I have one full-time subcontractor who does most of my fix up and maintenance work that I can't get to myself. I personally work about 20 -30 hours per week right now but that is going to stop as soon as I get our second flip sold. This park will allow me to keep my guy going since I can't count on the flips.

@Jay Hinrichs I don't need anything spelled out, just pointed in the right direction. I know to do my own research. I really appreciate your advice. It has given me new opportunities to explore to limit my exposure and increase the available cash. Thanks again!

I am smack in the middle of these parks and I hope to be able to use my time talents and proximity to accelerate my growth. I hope the numbers are anything close to what they are on paper:)!

Everyone, I have contacted the state DEQ which is the governing agency and read the regulations for both the well and the lagoon. They are pretty standard and I will get both systems tested before closing. Thanks for the concern and highlighting the need to do this. I probably would have overlooked it or assumed it was fine. I am moving in to a different league then where I have been. 

@Account Closed Thanks for the info- I am definitely looking for all sides so I can consider everything that may come up. If you don't mind I would like to respond to your comment so I can explore the issues you raised. 

It was not a whim. I had already looked at the park with the broker and did not purchase it because of the asking price which was more than double what I paid. I had written this one off after looking at it for over a month. I like auctions because you get to see where everyone else is at. I was actually willing to go much higher because of the owner financing. When the auction price was as low as it was, I jumped on it.

lagoons- I grew up with a lagoon on my parent's ranch and my parents still use it. My school has one currently. They are fairly common here. I will check with the county health department and see if there are any issues. This is a very rural area and there are not many other options and our rules and regulations generally reflect that.

Thanks for the links to more information. I am very excited to learn all I can.

My temporary job (until I can move to full-time investing) is a consumer bankruptcy attorney. I feel pretty comfortable with the laws you discussed. I am of the mindset that fear in others can create an opportunity for those who learn the rules. I agree that there is an entirely new regulatory landscape but it is evolving and there is room to maneuver within it. I will go to the MH forum to read up on whats out there. Thanks again for the direction. 

I am not planning on being able to sell the park for quite sometime. The owner financing is on excellent terms. My goal is cash flow. I am fairly young and aggressive in my investing so that in 4 years I can be doing this full time and 5 years after that, step back into a passive role with full time managers (starting with my 10 year old son!). This park fits my plan very well.

The park went to auction because the owner could no longer manage it and he did not try to sale through a Realtor. The auctioneer tried to sale it to individuals he knew which is how I knew about it beforehand. I have bought other properties from him.

Don't worry about the contrarian point of view. My wife will tell you I live in the clouds so it is very helpful to get a dose of reality. I am looking to cover every angle... I am not very leveraged on my other properties so I can cover some mistakes for a while.

Generally, I still end up going in swinging until I fall or they fall! So far it has worked out well.

I just moved from a propane fueled house. It is very common in rural areas. It is helpful to have a source of heat in the event of an electrical outage like an ice storm. Our previous house was total electric and we had to leave for 3-4 days because of a power outage a few winters ago. 

Propane requires planning as the price drops in the summer (when you don't need it) and rises sharply in bad winters (when you really need it). For a flip it is no big deal and would be considered fairly normal at least in the rural areas I have lived in.

@Katie Neason Thanks for the comments. I am really excited to be moving on to bigger numbers of doors in my deals and this one seems small enough to handle. 

I am not aware of another park in the town but my town which is 20 min. away its about $100-$150. I am currently planning on cash flowing the repairs from my other properties- so I expect to spend about $20,000 over the next year on the overall park and the 3 units that are not currently rented. I liked @Jay Hinrichs idea about owner financing the trailers so that would significantly reduce what I need to spend on the occupied trailers. I am hoping to get the vacant lots occupied asap. The current tenant quality is very low but according to the records I got (a list on a notebook page) The single wides average $300 and the double wide is bringing in $450. Only two were behind as of last month and he had evicted one of the vacant trailers last month so everyone should be close to current. Everyone is month to month at this point. Plus leases don't mean a lot at this level in my experience.

I am hopeful of the forced appreciation aspect but I am not putting any eggs in that basket. It is really the owner financing that is making this work for me.

I will update this tread to let everyone know how it goes.

One of the things I love about bp is looking into the worldview of others I can relate to. There are very few people who will understand this process you are going through. I wish I had this resource when I started.

When I started in 2006 I set my goal at $5000 per month in net income as a passive real estate investor. Since then I have had to double that number. Now my goals are like @Ned Carey. You need numbers to make your goals measurable but it will be come less important as you start meeting them. My goal now is to provide for my family through my real estate investing and have freedom to set my own schedule and commitments. There is a dollar value attached to that and a number of rental units. It is important to know what you are working for. (It gets hard at times...)

I would not worry too much about the R. I have not met any of the original timelines I have set. I love the saying, "It doesn't hurt to land on the moon when you are shooting for the stars" or something like that. You will be amazed at what you do accomplish. I have had to review and revise my goals as time went on and I learned through experience what was actually possible. 

Some koi/carp species are used to keep algae from growing in ponds/gardens. They live on the plants growing in the water. They don't need much care...

@Jay Hinrichs Thanks again! Our regulations are generally relaxed compared to a lot of areas but I would like to hit the ground running.

@Jon Klaus Thanks for the vote of confidence!

@Jay Hinrichs Thanks for the info. This is a new deal for me. My two duplexes are on the same two acres and I have not had to deal with any of this so far. I appreciate your knowledge. I really like the idea of selling off the trailers. I will check with the seller and see If I can keep them off the note for the down payment.

Do you have a company who handles your water monitoring, reports etc.? Do you have a monthly fee or is it per job?

The water is near by. I will check with the county on any violations. Thanks for the idea.