All Forum Posts by: Chris Reeves

If you recently put a park under contract immediately buy Frank Rolfe's "30 Days of Mobile Home Park Due Diligence" manual and his guide to managing mobile home parks - if you haven't already done so.

Look into Costar - they are hundreds of dollars a month but if you are dealing in millions of dollars of capital it's a small price to pay.

Also a couple of industry sites aimed at pro investors are still really good reads for small time folk like us. nreionline.com is one of them - and you might get pointed in the right direction looking at articles there.

But like Joel said - doing your own research may yield the best results.

Hey folks,

EDIT: Moderator - feel free to delete my post in the PRO forum because it's the same. There's very little traffic over there and I got no responses so I decided to post the request here in multifamily.

I'm wondering if anyone here has had experience making the transition from mom and pop level investing to a larger scale of operations where you need to employ someone to operate your internal deal flow "funnel" (for lack of a better term) to re-invest cash flow and/or gains from property sales. OR if you haven't done it for your own funds but you have worked in a small REIT or small private equity shop and have insights on lead gen and deal flow management in a environment of a very small team - that would be helpful also.

In other words, having an employee in place to systematically perform the mechanical aspects of the flow of:

Lead generation -> deal analysis -> placing offers -> due diligence checklists

If you have done so, I would LOVE to hear any of:

1 - Your "best practices" insights

2 - Whether or not you felt that the expense and time involved (I'm forecasting a full time) in operating your own lead funnel generated, over time, investment opportunities at better values than what is available on the open market. My targets are mid-sized apartment complexes and mobile home parks

Why I'm planning to employee my own lead generator / analyst - feel free to criticize my plan.

Prices are really high for apartment complexes right now. In the past when I've looked for purchases cap rates were reasonable enough that purchasing listed assets on the open market was attractive.

Now, having disposed of some matured assets I'm in the hunt for acquisitions again and want to diversify the portfolio (rather than simply lever up into even larger properties) into a larger number of properties. This of course introduces the headache of what could become an unmanageable workload for one person.

My gut instinct says a formalized funnel will be worthwhile. And my experience managing a sales prospects in a different industry was that using CRM software was worth the time and effort.

I'm willing to lay out the capital to employee someone hunting for deals for as long as 2-3 years before "harvesting" any prospects - if necessary. Of course I'd like to see results faster than that if possible.

Things I am uncertain about:

1 - Whether or not to separate the lead generation/prospect management function from the underwriting/due diligence/paperwork function - ie employ two part time people rather than one full time person.

2 - Compensation structure for the lead generation person - pure salary? Commission? Mix?

3 - Any particular CRM packages you've tried? I have extensive experience with 37 Signals' Highrise (cheap, fast to implement, fast learning curve) but have also looked at Salesforce and heard good things about open source programs like Sugar.

4 - The necessity of working together in the same office vs virtual operations. I had a great administrative assistant, smart as a whip, who worked for me full time for several years in a different industry. She moved out of state - not ideal - but we know how to work well together, I can count on her once she says she will do something and I wouldn't have the anxiety of trying to find someone from scratch. On the other hand I know myself, and it's way too easy to blow off going to your own office if there's no accountability you have to be seen by your own employees.

Thanks folks!

Have you never seen American Hustle? :P

And yes problem area properties can be profitable like your instinct says - just be willing to roll your sleeves up and endure a lot of headaches. If you can handle that and the numbers make sense then go for it. Just don't believe income projections given to you by brokers.

Hi Timothy,

I second Christopher Brainard. I live in Southern California and have been doing real estate investing with my family for decades - both in and out of the state. It's my strong opinion that California real estate goes in cycles - and that right now in L.A. the prices are really expensive and don't make sense. You are a psychologist - read up on theories of behavioral finance, herd mentality and value investing. Cali is a boom and bust place.

We also are invested in the mid-west - and yes the cash flow is better. However we have apartments there - enough to pay for professional on-site management - and we got the capital to do that after decades of slowly accumulating in California.

If you only have enough capital to get a duplex or something like that out in the mid-west it could be tough to manage it from California.

I will tell you this brother - there will be another crash in California. And there will be another boom. I just can't tell you when! If you have the self discipline to wait, be patient, keep saving money - then buy when everything goes to sh*t again in California. You will surely see crazy appreciation after that, and then you can harvest your gains and move the profits to a higher cash flow state. You are young, life is long.

I agree with your instinct that now is NOT the time to speculate on appreciation in Cali - that time was after the crash in 2008.

As for the Inland Empire I grew up out there and we recently sold some apartments in some crappy places in the I.E. (recently as in a few months ago) - let me tell you - people are paying STUPID prices even out in the IE right now. Not as dumb as L.A. but still dumb.

So be careful.

However, having grown up in the IE I can tell you there is a solid population base that isn't going away any time soon, so if you can find a decent property at a decent price it could work for you.

In theory yes - you can 1031 from one property into multiple properties.

Hey folks,

I'm wondering if anyone here has had experience making the transition from mom and pop level investing to a larger scale of operations where you need to employ someone to operate your internal deal flow "funnel" (for lack of a better term) to re-invest cash flow and/or gains from property sales. OR if you haven't done it for your own funds but you have worked in a small REIT or small private equity shop and have insights on lead gen and deal flow management in a environment of a very small team - that would be helpful also.

In other words, having an employee in place to systematically perform the mechanical aspects of the flow of:

Lead generation -> deal analysis -> placing offers -> due diligence checklists

If you have done so, I would LOVE to hear any of:

1 - Your "best practices" insights

2 - Whether or not you felt that the expense and time involved (I'm forecasting a full time) in operating your own lead funnel generated, over time, investment opportunities at better values than what is available on the open market. My targets are mid-sized apartment complexes and mobile home parks

Why I'm planning to employee my own lead generator / analyst - feel free to criticize my plan.

Prices are really high for apartment complexes right now. In the past when I've looked for purchases cap rates were reasonable enough that purchasing listed assets on the open market was attractive.

Now, having disposed of some matured assets I'm in the hunt for acquisitions again and want to diversify the portfolio (rather than simply lever up into even larger properties) into a larger number of properties. This of course introduces the headache of what could become an unmanageable workload for one person.

My gut instinct says a formalized funnel will be worthwhile. And my experience managing a sales prospects in a different industry was that using CRM software was worth the time and effort.

I'm willing to lay out the capital to employee someone hunting for deals for as long as 2-3 years before "harvesting" any prospects - if necessary. Of course I'd like to see results faster than that if possible.

Things I am uncertain about:

1 - Whether or not to separate the lead generation/prospect management function from the underwriting/due diligence/paperwork function - ie employ two part time people rather than one full time person.

2 - Compensation structure for the lead generation person - pure salary? Commission? Mix?

3 - Any particular CRM packages you've tried? I have extensive experience with 37 Signals' Highrise (cheap, fast to implement, fast learning curve) but have also looked at Salesforce and heard good things about open source programs like Sugar. 

4 - The necessity of working together in the same office vs virtual operations. I had a great administrative assistant, smart as a whip, who worked for me full time for several years in a different industry. She moved out of state - not ideal - but we know how to work well together, I can count on her once she says she will do something and I wouldn't have the anxiety of trying to find someone from scratch. On the other hand I know myself, and it's way too easy to blow off going to your own office if there's no accountability you have to be seen by your own employees.

Thanks folks!

 Maybe 'cause he disclosed he was using a pseudonym - the forum doesn't allow anonymous accounts. That's what you get for being honest - shut down! If he'd claimed to really be named "adam smith" the account would be active.

Hi Bill - fascinating post. Your logic is sound, and having just returned from three days in Seattle I will say that the older homes in the parks I saw (not that my sample is representative) generally looked quite clean.

But what you are saying seems, on the surface, to be the polar 180 degree opposite of what Frank Rolfe and co are telling people at their boot camps.

He claims that the homes in the date range you are discussing (60's and 70's) are worth merely a few thousand dollars - and that the biggest way to get in trouble with park-owned homes is to overpay for them. The numbers you are quoting sound like overpayments - at least according to Rolfe. He is saying that homes of that vintage are worth $2,000-$3,000. He also told us, if I remember correctly, that the tenants in the demographic who must live in mobile home parks generally don't have $30,000 or $50,000 lying around - and so rent credits, financing, or rent-to-own is necessary to get them in homes.

But what you are claiming you're seeing is very different.

Maybe I'm missing something? Not trying to be argumentative but presentingn all sides helps us learn, right?

If you really are able to buy a widget for for $X, put another $X into it, and then sell for $6X - that is fantastic. And for cash?

Is your market unique?