All Forum Posts by: Charles Kao

Hard to say but with a MHP that small you're basically buying a job as it will be hard to put systems in place.  Is there any value add with more pads and can you fill with more homes as right now the biggest issue is finding homes to place on the pads.

We offer half off three months on Google, Facebook and marketplace and all over social media.  We prefer this to Sparefoot as they stay longer and retention is strong coupled with we charge more than others in the market.

@Devante Scholfield

As a private lender, past commercial lender, realtor and CRE investor I have seen it from all sides. Would you lend to your own clients on these deals they are looking at for less? Because I have actually done it and can tell you that its easy to say what others should do woth their money. Buying an amazing deal and having the ability to reposition it are both important so my recommendation is you tell those clients that need low money down loans to get a partner that does not need low money down loans. Better to get half of a deal than none of one at all. I can only imagine how this market could inflate if people could get 10% down deals with little experience.

Many of the lakes have local STR management although not cheap. Your biggest issue is simply finding inventor. STR in those areas do well year round because of fall colors and ski resorts and snow mobiling if they are on a lake, but on the flip side you are paying significant more because they serve dual purpose. I have found that the return on a SFH STR in those areas is minimal in comparison to other assets as they require a large down payment, but with management taking on 18-30% of rents it's much more difficult to manage. If you find a cleaner to manage it life is easy but it's also difficult to maintain because you lose them to others that can provide more consistent work. If you are looking to make some money and have a place to use 4-5 times a year, then from that aspect it's a great investment but solely looking at numbers I could find others that perform much better. Those I know that do really well often self manage as there is where most of the margin is made up.

@Konnor Lange You can structure this deal one of two ways.  You can do it as a joint venture where you partner will also likely sign and guarantee on the debt, or you can have an investor provide you debt.  The deal is so small you are going to have lenders motivated to lend commercially and be alright with you taking on additional debt so you're basically looking for an equity partner willing to take on this arrangement.  Once you settle on terms, send those to a lawyer to draw up.  I would look up a sample operating agreement to review how you want to structure.  Always have an operating agreement because when disagreements happen without one I find it's not because people are lying or not acting in good faith but quite frankly you will have many conversations and its highly like your version of events will differ because one partner may remember a conversation had at one point while you may remember a conversation at a different point in time.  If it's written and you both agree to it will eliminate any hard feelings later if there is a disagreement.

With the massive shortage of vacation rentals in the lower peninsula or due to cost I am seeing more people willing to travel to the upper peninsula.  The porcupine mountain area is decent in the winter because of ski traffic but because the drive is so far away I find some people personally just go to Mt Tremblant in Canada or take a short flight to a better ski resort.  In particular the area along Lake Michigan on the south border of the upper peninsula is where I would invest.   There are alot of people who want to be on Lake Michigan but with water levels incredibly high many homes lost their beach, which also decreased inventory and those still with a beach are pulling over 1000 a night.

@Michael R Bender

Is your partner located in GR. Alot of credit unions and banks I would recommend do not lend to out of state buyers.

@Brian Weaver If it cashflows 100 a month then 1 year of cashflow is 1200. 5 years of cashflow would be 6000. Using a 5 year metric if you can make 30k now in this example or

more I would definitely consider selling instead of waiting 5 years to get it. I personally like to do 7 years of cashflow or more but 5 is a minimum

@Jonathan H. Mooney @Drew Sygit covered the can you. My question is why? I run into this all the time where people want to chase the money. Growing and managing a PM business is very time consuming so it could actually hurt your realtor business by taking your focus off of it. One of best things I did to grow my business was shutting down my in house management so I could just focus on growing my portfolio and my consulting business. The time it freed up was well worth the income lost

as in the end I grew my portfolio so much faster and my clientele.

@Brian Weaver

I would look at how how many years of cashflow can you get now. For me it has to be at least 5 years of cashflow to cash out now but if you keep definitely cash out refinance. If you buy and can’t 1031 then might as well just keep after a refi if it still cashflows.