All Forum Posts by: David Abarca

Here is a post that is about a mistake I made that hopefully won't actually cost me any money. Back in May I purchased a property that had one mobile home and 2 empty lots that could accommodate a mobile home each. I had a $75000 LOC and purchased this property for $53000. The property had one septic tank for the mobile home that was on it. The mobile home was set horizontally on the property so it was actually occupying 2 of the lots. I made several mistakes when it comes to the analysis of this deal.

- I didn't think it would cost as much as it did to move the mobile home.  I ended up paying $2600 to turn this mobile home 90 degrees on the property.  The last time I payed to move a mobile home across town it cost me $500.  

- All of the other costs that came with developing the property were higher than expected.  Septic systems $3000 a piece.  Plumbing installation $2500.  Electrical connections $700.  To purchase a mobile and move it out to the property I am looking at close to $20000.

-The biggest mistake of them all was the financing aspect. I did not know that refinancing a rented mobile home would be so difficult. I thought once I moved the mobile home I would simply refinance the mobile home and lot, which is renting at $800 per month, and use that money to purchase the next 2 mobile homes and place them on the empty lots. Unfortunately the only place that would do a refi on a mobile home would only do 55% ltv and 8.5% apr. That was definitely not going to work for me. This left me stuck with 2 empty lots, and about $65000 on an LOC.

Luckily there is enough equity in the lots and mobile home to offload them and come away with a little cash in my pocket.  I would rather offload these properties and purchase something that I can refinance, rather than be stuck here saving money to place a couple of mobile homes on a couple of lots.  I just wanted to share this so that hopefully you won't make the same mistakes as me.

@chase 

@Chase Louderback Thanks

@Frank Rolfe i really learned a lot from your response.  Can anyone tell me what the 0.7 in the formula is for?

Thanks!

Just looking to see if anyone has a property mgmt company they would recommend for B.R./ Denham Springs?  I am looking for someone to manage a few mobile homes that I am setting up to be rented.  Thanks.

@Alexander Wardell @Frankie Woods  Thanks for the advice!

I recently applied for a line of credit that was going to be backed by a multi family building I own outright.  I like the idea of a line of credit due to the fact that I can pay cash quickly for deals that I find.  I own a restaurant that I have improved since I took over but it still does not cash flow well.  This was the reason that I was rejected along with the fact that I have a little too much debt.  I think I am going to put together a portfolio describing exactly what I want to do and how I plan on doing it to present to the other banks and credit unions in the area.  Does anyone have any advice for me?

Thanks

Thanks!

My name is David Abarca and I am from Baton Rouge, La.  I currently own a restaurant and I own 7 rental units (4 apartments and 3 mobile homes with lots).  I started in real estate when I was 23 and in the navy.  I was complaining about not wanting to live on the ship when a friend of mine suggested that I buy a house and rent out the bedrooms to my navy buddies.  4 years later after not paying a dime on my mortgage (thanks to my shipmates) and fixing up the house quite a bit I walked away with a $40,000 profit.  I have never read a real estate book until I came across Brandon Turner's "How to invest in rental property" (which also has led me here).  Now I am ready to take a business minded approach to investing and increase my portfolio.  I currently work about 60 to 70 hours a week in the restaurant, so I hope you can see why I would like to do something a little different so that I can spend more time with my family and friends.  Flipping a renting properties are the things that I want to do in the very near future so hopefully I can get some great advice from everyone here and maybe make a few deals with like minded people.  I look forward to the future here on BiggerPockets!