All Forum Posts by: Jon Dorsey

So I’m not off but may not be able to give the deal that the all cash/1031 could do. 

I hear a rule of thumb is when financing, you need a 3 point spread between CAP and interest rate. Does this hold true or does anyone have another rule?

After much research I am narrowing in on a few Mobile Home Parks and have started to make offers but the feedback I'm getting from the seller(s) makes me feel like I'm way off in my valuation.

Basics:
Lots: 60 (100% occupancy)

Lot rents: $375 (in-line with market)

POHs: 10 which I don't CAP but pay for separately

Exp ratio: 40%

All in offer: $1.85M

Crickets, crickets, crickets. I think they wanted to hear $2M but I'm not in this to break even and I don't think its prudent to put my formula in front of them to show them the analysis.

Would appreciate a realty check and any guidance going forward from the group.

John,

Sorry to hear that. Was it financials, physical, or environmental that you found. Thank goodness for diligence. 

How is everything coming together? Were you able to find a bank or how did you proceed?

For breaking apart expenses. If it has to do with running the park then keep it there. Expenses for POHs are maintenance on those units from tenants throughout the year, turnaround maintenance costs to get it ready for a new tenant, insurance and licensing for the POHs.  

Are you CAPing the POH rent or segregating it out? I ask bc I’d breakup income and expense by land/lot rent and POHs rent/MAINT/repair  

someone just posted from Reno about partnering. May be a good opportunity to bounce off.  

https://www.biggerpockets.com/users/BrianT168

Sounds like you need to get contract and into diligence to get the utilities inspected to make sure it wasn’t a quick patch and be prepared to renegotiate or walk. 

Saw a few parks for sale in Reno. Go out and compare   

Best of luck. 

have you asked the seller if they’re willing to carry the rest?

It sounds like a pretty straightforward deal. I may be able to help if you’re willing to partner for a short period. It’s easier to “refinance” sometimes than get a small loan. 

When structuring a partnership LLC, does each partner need to bring fiscal assets to the table?

Can I form a LLC to purchase a multi-family asset, finance funding through a bank (non-recourse), use the SDIRA to fund the down payment (20%) and setup the LLC as 20% SDIRA and 80% me?

Sorry I missed this one, but just moved to this area. Please let me know when the next one is.