All Forum Posts by: Steve M.

First, I apologize for the length on this, but I err on the side of too much info to start with.
I'm looking at a mobile deal to wholesale and am wanting some advice on best practice to find the ARV. It's somewhat of a mixed bag, thus the questions.

Details:
22 Total Mobile units ranging from 1br/1ba to 3br/2ba.
AP: $139,000

Here's the mix:
3 units on 1/4 acre owned land & mobiles.
6 units on 1/2 acre owned land & mobiles.
For both, $350/mo water, $74/mo trash, $800/yr taxes.
Avg $300 per unit rent for easiness ($2700 GMR) sake.
Seller says appraised 2yrs ago for $57k/74k respectively and he owes $80k roughly for both parcels on one note (basically says he owns all 22 homes outright, lien is against land parcels). Both of these small "parks" are inside city limits.

Other 13 units are scattered between 3 other small parks. I'm sorry, but I don't know what the total lots in each are, but the largest is about 20 lots. 2 are rural outside city limits, one is inside city limits. Avg rents again are about $300/unit (total monthly $3900). The lot rent for all 13 of these between all the parks is $1,080 mo/ $12,960 annual.

Leases are month-to-month, no written agreement. Property manager/rent collector/maintenance person lives in one of the trailers for free rent (seller lives 30-45 minutes away from location). I met her, prop mgr, today just by chance doing some repairs to one of the trailers. Since she's rent-free, deduct $300 mon/$3600 Annual rent from totals for an annual gross rent of $75,600 potential.

I have not done thorough inspections on any of these trailers, but from the looks by driving by, most are probably 70's or 80's models worth anywhere from $1k-3k depending on the size and age. All seem to be in fairly solid shape. Not pretty on the outside, but the one I looked at seemed solid structurally with no sagging, rotting wood or visible leaks inside.

The area I'm in has a median income of about $26k, so there is high demand for this level of rent/payments. I've done some rental analysis at $120k offer, 10% down, seller carrying the note at 8% for 2 yrs max with about another $10k in other acquisition cost contingencies (initial repairs, fee to me, closing costs, attorney's fees, DMV transfer, etc). I've also figured in property mgmnt @ 10% just in case the current tenant moves on who is doing that for free basically.

I would like to try to wholesale this, but the seller isn't in dire straits, just wants to be done with the mgmnt of it. I have 2 investors that I've peaked interest with, but I want to make sure I'm doing my numbers right and not missing something.

Does anybody have a good formula for doing an income valuation approach on the parks/parcels that are owned. I can't really use land comps since these are developed park lots, but there are also not any MH park sales that I can have a realtor lookup here either. So, to me best way is an income valuation approach, which I'm thinking is where the appraised values came from 2 yrs ago.

At $120k offer, $22k cash in, I'm getting a GRM of 1.59, Cap Rate of 34% and ROI of 143%. Even at the full offer of $139k, I'm still pulling very good numbers.

Any questions, thoughts on how to best value this to an end-investor?

Sorry for the book again.

I agree with Bill on this point.

The SAFE statute specifically references another section that specifically says a MH is a 'Residence'.

There are 2 main things I find interesting from this statute just on the face:
Section 5103 says: (a) In general
Subject to the existence of a licensing or registration regime,
as the case may be, an individual may not engage in the business of
a loan originator without first -
(1) obtaining, and maintaining annually -
(A) a registration as a registered loan originator; or
(B) a license and registration as a State-licensed loan
originator; and

(2) obtaining a unique identifier.

I'm not an attorney, but basically I think this means that you are either subject to a State Licensing entity or the Federal registry (which is to be established and not sure if that's happened yet.) This section also talks about 'Independent Contractors' needing to be state-licensed. So, I think IMHO it will still boil down to most states enforcing this regulation. Still many questions.

The second thing is just more comical to me than anything and is just more of the same typical government bureaucracy. The very first paragraph states, "...reduce regulatory burden..." and 5101: ss (5) says "(5) Streamlines the licensing process and reduces the regulatory burden."

I mean, who in their right mind could even logically think that this statute will reduce any burden whatsoever.

An old mentor of mine used to say, "Stephen, there's just not much you can do about stupid." I tend to side with him and Forrest Gump on this one.

Nice Jon. My dad was stationed at Ft. Leonard Wood during vietnam. Lots of distant relatives in that area and SE missouri.

Thanks!

Thanks for the reply Jivonna. Wasn't a specific question in my post really, but your info is helpful. I am already doing the CL ads, but I will try to step up the bandit signs as well. I was more just saying, "Hello" on the site and feeling out if there were any pro investors on here who would like to look at some of the deals I have from time to time.

Thanks!

Hey Stinson, newbie here. Every county is different, one, but in my county I believe we have to do a voluntary assessment to get anything like that changed. Could be nobody wants to do that, 'cause we all know what that means. Yep, more value, more taxes.

My curiosity in this is if it really matters? Maybe it does in your area, but in mine it's kind of "beware of sf and do your own measurement to confirm" much like you've done. I've actually seen REO listings be higher by 200 SF + what the house actually is. Now, it's okay if your under, but a listing agent should know better IMO to be off by that much (this is as of last week and I did measurements myself).

Obviously any independent opinion you can get in writing further solidifies your claim when you go to sell it and list it. With that much extra in your pocket, why not? :)

Hello everyone,
This is my first post on the site. Looks like a lot of great information.

I am in a rural area north of Springfield, MO (Branson MO everyone's probably heard of). There is mucho opportunity here for real estate deals. I do not have the credit or finances to do this alone, so I am looking for investors who want to buy & hold or flip properties. I can find many properties at 40-80% below ARV, some including repairs. There is a tremendous opportunity for Owner-Financed deals at, I think, 8-13% interest rates.

I am focusing my efforts in Polk County, MO. The city I live in is a small, private university town with about 10-12k in population. We are only 30 min's from metro Springfield (300k I believe) and many people commute from here.

I have census info available and am finding motivated seller deals every day.

I want to primarily wholesale most deals for the first 12-18 months. My first RE deal I have done was for my own home that we moved to in April.

L/O Deal for $125k, $5k Down (seller was asking $130k/10k down). 2.5 yr option term with $850/month.
3500 SF, 5Br/3.5 Baths on 1 acre with swimming pool.
$1500 Repairs over the summer if that.
ARV=$195K conservatively.
Year built: 1972

So, thanks for reading and looking forward to getting on the forums.