All Forum Posts by: Kai Van Leuven

@Joe Splitrock

Very well put. I think most of the lack of people striving for wealth is tied to laziness. Although there are stigmas associated with being a landlord, most people get a glimpse of how hard it is and say “no thanks”.

People would rather dream of something big, dip their toes in it, and later have regret then go big and capture what they ultimately want.

Whenever I have someone tell me what they want to do... I look at what they are currently doing. If they are doing nothing now, more than likely, they will do nothing in the future. If they are a hustler with some drive, I would take that, over someone who came from money/has money.

@Sarah McCluskey

I take those deals. The hurdle is biting the bullet on the increases and timing. This is how I talked myself into it years ago. I told myself, I am going to charge market rent and if they stay great, if they leave great. Some stayed and some left. This way you don’t have to feel you are kicking someone out and they make that choice.

Also, you are buying an asset for what it could be, not how it is run right now. Everything I buy is based on a pretty conservative pro forma. Then I attempt to get my rents and expenses there. Don’t fall into the trap of keeping the status quo of what is there now.

Sometimes you just have to eat some costs (opportunity costs in your case) in the beginning to make what you want in the end. Make sure you have reserves and can get it there and a plan for when you will make the increases. In your case I would do them at separate times.

@Dan Weber

I think you have the right strategy. Sometimes things become too contentious and you just have to cut ties and start fresh.

@JD Martin This is really my point. You are buying the zoning, and some depreciated out improvements. 

Really what gets me is that an appraiser really dictates value. If the business was separated from the land, mobile home parks would be valued at much less. 

@Brenden Mitchum Oh dear, where do I begin... Forks is in the middle of nowhere. It is not near a beach, not that close to the coast, and is a pretty dreary town. Probably 50% of the downtown is uninhabited. I would stick to investing in places you know... 5 star resort... I think not.

As far as estimating costs, my numbers are usually pretty spot on. My last purchase on 10+ multifamily is sitting at right around 20% CAP, in a pretty big market, that is growing. I am not saying that to brag but you come off pretty condescending assuming I don't know how to estimate costs.

I buy in areas I feel like there is value. Some, maybe you, invest at the "watercooler". What is everyone else talking about, what is hot, that is where I will be. I am not into that game.

@Brenden Mitchum

Went pending in hours... I got to it right before it went on to mobile home Park store.

https://www.mobilehomeparkstore.com/mobile-home-parks/1343788-castle-rock-mobile-home-park-for-sale-in-forks-wa

If it was such an overpriced asset why are people all over it? There was literally one decent home out of 74 spots... c’mon man...

@Brenden Mitchum

10s of millions of people bought beanie babies. Some as “investments”, doesn’t mean it justifies the purchase.

I am looking at the underlying assets involved in the Mobile Home Park business and they don’t, in my limited brain, justify the purchase price.

Case and point, before it hit the market I went and looked at a 74 unit complex. It was rough, I estimated it would have taken 400k to get it where it needed to be. I put in an offer for 1.6 and drove the 4 hours to see it. For 2m bucks there is no way. I have seen nicer slums in the third world. The cashflow was ok, but still nothing to write home about.

For 2m you could buy/start an amazing business (non Real Estate related) that would trump the cashflow of that park by 10x.

@Muoki Musau

Lol, I am 99.9% joking about being the “King”.

On Chasing Markets: I just feel like folks will try and say go to a different area for returns. To me there are people in those areas who are investors, know what they are doing, and have been successful. You are looking to compete with those guys/gals. No thanks. You know your area, even though you may not know the real-Estate side,yet. Just my .02c.

@John Erlanger

I see now...

I have been looking to buy a Home Park for probably the last 10 years. I have seen over that time a huge increase in values and shrinking cap rates. It has lead me to think it could be the most oversaturated and overvalued asset class out there. What value exists in a MHP? What improvements lead you to think that a MHP's value is anywhere near a 5% cap rate? What I see, a Meter Base, sewer pipe, and water supply line. 

For all the owners of parks out there, don't you just own some exclusive zoning and a bunch of completely depreciated out mobile homes? 

Someone elighten me... I ain't seeing it... the value in owning them seems to be that there is value in owning them and no one can see that you don't really own much for a couple million bucks.