All Forum Posts by: Craig Sloan

Crystal it sounds like a great plan but you might want to just sit tight for a while. I'd be willing to bet in the next 6-12 months prices will drop. You might get yourself a better deal if you're not in a hurry.

@Chad Dunham I'll just address the issue about the LLC. I would say YES. You have worked hard to put yourself in a good financial position. In most states an LLC can be formed easily and inexpensively. In my opinion it is well worth the time and money for the protection it should offer. It would be a shame to see you lose what you have worked so hard for if something went well at a rental property. Good luck. Keep moving forward.

@Madhav Thaker congrats on your decision to invest in real estate.  I would spend a little longer learning about investing.  In a market like LA there is a lot to learn.  There may be scenarios where you can get into a place for 10% down but lending standards have tightened significantly in the last few weeks.  I'm in the midwest so I don't know the typical expense costs in your area.  

You can run in to all kinds of issues with tenants.  If you are in the game long enough you will run in to issues you could not have imagined.  That's one of the things that keeps real estate investing interesting.  One of the major keys to being a successful landlord is screening your tenants well.  Especially now, when so many are out of work and may not have the means to pay the rent.  Take some more time to learn your market, network, analyze deals and wait until you find the right one.  Good luck. 

@Austin Dumbaugh it really all depends on your level of comfort.  Starting out managing your own single family homes might help you develop a better understanding of what it takes to manage and might help you know what to look for in a manager when the time comes.  I'm like you, I like multi-family but it's more challenging especially starting out.  Not to deter you, but you might be smart to start small and grow as you learn and gain experience.  Good luck getting started.  I wish I would have started at your age.  Let me know if I can be of further service.   

@Alex Wynn have you thought about what kind of heating and cooling you'd like in your units?  Personally, I like electric baseboard heat.  This isn't usually an option in A or B class properties, at least not in my area but it eliminates the potential of having to replace a furnace.  A baseboard heater can be replaced for $100 a furnace is a few thousand.  The baseboard heat is more expensive to run but that isn't your concern if the tenant pays the utilities.

I would also check to see if each unit is individually metered for utilities.  If possible you want to avoid paying the utilities when you don't control how they are being used.  Good luck.  If you have more questions after looking them over feel free to message me.  

@Christian Valencia sounds like a good plan.  Flexibility within that plan may be key.  I think there may be buying opportunities in the next 6-18 months.  Be in a position to buy.  Your goal can be accomplished in a number of ways.  Spend some time talking with your wife about how you feel most comfortable investing.  Have you read Kiyosaki's work and his thoughts on good debt vs bad debt?  I think you may be able to scale more quickly by taking on good debt (although lending standards have tightened significantly in the last few weeks).  

The more units you acquire the more you should benefit from appreciation over the 10 years before you retire (Appreciation on 5 units vs appreciation on 25 units).  Assuming 3% appreciation, would you rather have 3% on a $500,000 portfolio or 3% on a $2,000,000 portfolio?  I know I'm making some assumptions here but the larger the portfolio the greater the appreciation in general.  If given the choice I'd rather build the larger portfolio for the 10 years and then decide on the best plan of action at the end of the 10 years as you transition into retirement.  Hope this info is helpful.  Let me know if I can be of further service. 

@Nathan Strine they can be a great opportunity but can also carry a lot of risk.  If you've not been to one a good first step may be to go to a Sheriff's sale just to observe.  There is a lot to learn about the entire process.  The biggest drawback for most people is that you normally can't get into the property to have a look before your purchase.  I think this would be a tough road for your first investment.  I would suggest starting with a more traditional first investment and work your way up to Sheriff's sales.  Good luck.

@Summer Cherry I would encourage you to look into the home study courses available at Mobilehomeparkstore.com.  I bought one in 2010.  It had all the info that I needed to begin purchasing parks.  The course has literally paid for itself a thousand times over.  It was a game changer for me.  Mobilehomeparkstore.com is a great resource.  There is much to be learned there.  Good luck.  

Yes it is better to own and lease the land than own the homes but it is often almost impossible not to end up owning some of the homes.  Have been in the MHP business for 10 years.  Let me know if I can be of further service. 

@Samuel S. if you haven't already I would look at the history of the park and previous uses of the property. Something doesn't seem right. Given the popularity of MHP's right now with investors a property with that NOI should be selling for a much higher price. Yes it is a value add opportunity but it seems like you might be getting a deal too good to be true. Do all your due diligence, find out everything you possibly can about the property, the current owner, the former owners, the tenants, everything.

Do your research on third party companies that will bill back the water. I started using a third party biller on one of my properties about a year ago and they have been terrible. Instead of making the process easier for me they have made it more difficult. It can be a great way to boost NOI but there can be some headaches that go along with it. Good luck. Hope it goes well. Go into the deal with your eyes wide open.

@Kriston Johnson I would encourage you to do the LOC. IMHO the advantage of the LOC is that it allows you to keep your payment low but have cash available if other opportunities present themselves. If they do you can use the LOC to fund those opportunities. We have used several LOC over the years to fund rehabs, make other acquisitions and for a variety of other purposes. In a game where cash is king, it is always nice to have some that you can access quickly without needing someone else's approval.