All Forum Posts by: Account Closed

I was reading Ray Dalio Principles  and they reference his video here: 

https://www.bridgewater.com/research-library/how-t...

Its a 30 minute watch on how the economy works.  I believe it to be an extremely worthwhile watch especially on all of the talk with cycles as of later ( the last few years :)  )  on BP. 

Check it out and if you were not satisfied , i will see if i can get you back 30 minutes of your time ( well  maybe on credit but i might default it :)   ) 

We sold our place to a company that did just that.

BUT In terms of whatever savings you would underwrite, i would think you would not want really do that and evaluate the investment as a stand alone so if you go to resell whatever savings you get will be gravy . 

Kind of like the small deal buyers who manage themselves and might work free but you really need to factor property management in on that because when you go to sell, the next guy is going to. 

When i have a lot of stuff going on deal wise, little.  But right now spending time trying to source the next deal and once I get something and get into the diligence and closing will usually check in more frequently.  Then try to respond to posts when i can .  But when i get a deal that consumes a lot of time initially will go dormant. 

I typically see the same handful of people who's responses i really like so i try to friend them, then their posts pop up in the news feed and i try to read their responses. Its especially great when i get a few people who I'm friends with that respond to the post and then see what they said.  It might not be the particular topic im interested in but like hearing what the people respond with on who's opinion i value as I might learn something. 

Also, if you watch certain posters long enough you figure their marketing angle.  I really like the people who just post to try and post to genuinely help people out.  Theres a lot that in real estate but a lot of marketing crap too.  So thats why i try to give people advice from time to time because so many before me have done the same for me. 

@John Hall I know frank and dave advise against some areas in the southeast due to weaker areas.

BUT you have a couple great things going for you, you are out of the utilities loop which is a huge plus, not even sub metering! Dare I ask if the city owns the road as well ( i only ask i sometimes see that when they do utilities , occasionally they do the road). 

On a lot rent versus rent amount , the spread is there to theoretically cover your costs on the home portion, additional maintenance and repairs, management .  BUT i dont like the lower dollar rentals because aside from tenant base, then you have certain fixed costs that dont absorb as well as higher dollar stuff. 

Start off with a house , do the rehab, see what you get in terms of interest after scouring the market.  Maybe you get lucky with a handy man special on one of your other homes and get it turned that way.  Play it by ear with how those play out and come up with a plan going forward.   

You can always explore new homes but given everything you said, might not make sense.  But you can see if anyone is out there buying homes who might consider going into your park or having decent used homes move into your park ( if thats something that might happen in your market).  Or if thats crickets then work as best with what you have.  

If you are so inclined, keep this post updated with what you do , how it turns out etc.  

You could have bought something on failing treatment plant with a bad  well and that would be terrible ( i have talked to parks as small as 15 lots with a sewer treatment plant if memory serves me right. 

Maybe you can do ok on this thing with some time and effort and rehab.  I just dont want to see you spend 10k on a house, you get someone who puts up deposits of a 1 or 2k and then 6 months down the road you have to spend another 4k fixing it up and cycle continues forever so keep that in mind get the best tenants you can on the front end that the market will provide. 

Good luck. 

@John Hall Its not relevant now but since this is an education site, proper due diligence may have helped you avoid the situation your in today. Verification of tax returns, bank statements, and/or tenant estoppels may have shown you what to be cautious about or thrown up the red flags.  In the future, use the Fran and Dave 30 days of due diligence guide to skirt potential land mines. I would still get that for you know , go through steps, so you have a better grasp on everything you have , additional risks you might have and how other park buyers may view the purchase ( so you know how to best get it marketable). 

But , we are here so lets see what do do. Things we need to know , what are the lot rents on the two homes that you don't own?  What are the parks in town or around charging? If you have a 350 dollar lot rent that is good, if you have a 150 lot rent, not so much.  

One thing that concerns me is 8-9k fully occupied.  Does that mean 500 dollar house rentals for the park?  That may be indicative of a weak market. Also, 500 monthly expenses is a worthless number .  Even on a lot rent only park of this size, your expenses may run 50% . Maybe even a tad more.  

Your 10 homes , if you can pump in 10k cash and sell for 10k cash or 5 k cash , might be your best case scenario IF the people are going to get good owners.  If you pump 10 k cash and you get people who can't come up with 3k to buy them, you might be stuck with low dollar rentals or look at Frank and Daves rent credit system but understand what your state dictates on them etc. ( like new york recently had a ruling with this) . 

I think long term it makes sense to get lot rent only tenants , but if you means to salvage is only having rentals that might be the case but we dont know enough to figure this out yet. 

Other big important factors will be what the utilities are , is it properly zoned.  The purchase price is cheap but you have to get the economics of the area together to determine if you pump 100k in you will have a park that is now worth what you paid or if you pump in 100k , you can get this to 400k .  

Feel free to follow up some additional responses.  There can be ways to work through this , feel free to post more info and maybe others can chime in .

You may also be able to find lonnie dealers to work with who will fix the house and attempt to sell it but i just dont know what's available in your area. 

@Erhart Asaad  I would focus on finding deals then partners.  Maybe doing it at the same time to let people know what you are doing etc and gauge interest from anyone who wants to be involved with what you're doing. I think today the partner is not the issue, the opportunity is.  Everyone is looking for a similar thing which presents a challenge to those who have yet not proved a track record.  Not to be discouraging but being practical on finding a most efficient spot to spend your resources. 

Theres an event at the end of the month for TMHA , not sure if this is a good networking opportunity in Austin, you might want to check it out.  Post questions, get opinions on deal evaluation.  There is a good forum for MHU which i believe i have seen you on .  I would scour all old posts ( might take 6 months) . Talk to people who are active.  Talk to people who have been active for 20 plus years. 

Frank and Dave model is a pretty safe bet for people getting started, in terms of managing risk on acquisition and generating upside. 

@Matthew Baltzell It appears that park street partners has gone to Jefferson at https://parkavenuepartners.com  and Brad Johnson at https://evergreencap.com

Talking with park owners especially if you have a particular farm area.  That will give you a chance to get off market deals and get a wealth of knowledge and build connections for years down the road.  

@Jen Stevane  I think the whole business model predicates of owning the land and not the homes.  That being said , if you have a chance to buy the homes with land under them , you can do that and ideally sell the homes off and charge a lot rent. 

There will be certain things to know /learn.  Ie permissible use where they are, can you replace them over time, utilities, do you need a dealers license to sell a home, what are prices in your market, how much is your acquisition cost,  what do MH rentals grab in your market if you go that route. What is the demand for the product in your market. 

I will consider it all day long .  Especially if you can get a reasonable price on a land home deal and be able to extract a good chunk on the MH and have a lower cost basis for your lend, can generate strong returns.  

On 2 spaces, you can get started and see if its for you.  Take your time to research the MH specific investment class.  

@Kyle M.  When deal making like this, if it is in fact a good deal always keep the variable in the back of your head that someone else is going to come in buy it cash. It makes it hard to compete when you back yourself into the " i need seller financing to make the deal happen" . While this would be ideal to get , sometimes you don't want to miss out on something if is a great deal .  If its a normal deal, probably not an issue.  Just something to consider.  

@Kyle M. said.  

It would be more helpful to know the details of this to confirm valuations or what else to look for. 

You also said "I believe it's worth about 295K.... if he can provide owner financing"

While terms can be relevant to a deal why is the valuation contingent on the owner financing.  I just often see people thinking that good financing makes a bad deal so that the owner financing isn't creating any fog on the valuation. 

Id just present the offer and hopefully they take it.  These days on market stuff can be tricky because so many others are willing to stretch which makes getting deals a chore. 

@Thomas Hausfeld  you gave to know the ins and outs of what state laws you are operating in , the process and protocol for title transfer etc.  I know i would never implement this method because there's an 80% chance a home will stay in my name for ever so i want to take care or that.  But if you do more than one , you have to be licensed etc.  So you need to know what your doing.  

You have to know your end strategy, MH by themselves aren't as liquid, have financing hurdles, what kind of shape it will be in , can you get someone to move it, how much will it cost. 

Talk with some park owners who are investor friendly  , I  think that would be the spot to start on this.  There is opportunity , you just have to take the time to learn to navigate it , coordinate it, understand the risks etc.