All Forum Posts by: Karla Yudy

Anyone know if you can find the history of all the posts you have liked since becoming a member?

@Wilson Lee

Also, I know you said you haven't bought a mobile home yet, but you seem to know a lot about due diligence, keep looking you and stay disciplined and patient and you will!

 Wouldn't cap rate be yearly? I think you calculated on a monthly basis, so before expenses the it would $3,500 X 12 / $252,000 = .16.6667 (not accurate since expenses need to be taken into account) ... curious as to why you used monthly ?

would a 50% operating expense ratio be accurate? 12 * ($3,500 (.5)) / $252,000 = 8.33%

Hey Wilson, thanks for the reply.

Just curious how did you come up with the .014% cap rate? And what is a typical cap rate for mobile home parks? 

Good suggestions as well, I'll definitely look into those. 

Also, I forgot to mention in original post but the park owns the trailers as well, how much of a difference does that make?

Any experienced mobile home investors out there? 

I'm looking on some feedback about what steps to take when buying a mobile home park as I have no experience with mobile homes! This is a small park (only 6 homes) so I think it is manageable but I am kind of unsure about what steps to take next. 

I'm in the due diligence process now what things should I be looking to investigate over the next few weeks to make sure this is a solid investment?

A little about the park:

-Small park -only 6 homes on 4 lots of roughly .5 acres each. 

- sits on a residential street, so not a park in the traditional sense; other properties around it are rental/owner occupied mod homes or SFHs (average price of these homes are roughly $100-110K

-total rental roll is $3,500 on a $252,000 purchase price (this is what attracted to me to park in 1st place - extremely hard to buy this type of income stream at this price where I live)

-on well and septic (don't have much experience here, what should I be researching/verifying? 

Overall, I was really attracted to the deal because of the income the property produces but what other things in general should I be looking into/verifying?

 what exactly did he put on seller disclosure? in n.c. you can make a 'no representation.' however, if you decide to fill out seller disclosure and intentionally misrepresent something that changes things quite significantly. not sure about how things are out there, but you'd definitely have a case if he knowingly lied on disclosure. worth talking to your attorney about

Hey Connor, one thing that I think sometimes gets overlooked but which is extremely important is doing things to improve your credit score an getting access to cheap money. Of the two, I would say having access to cheap money is more important but usually you need good credit in order to get cheap money. What you may want to do over the next 12 months is meet with a financial planner/mortgage broker and have them work out a plan to help improve your credit (not saying your credit is bad to begin with, but many times they may know ways that can get it higher over 6-12 months... even 25-50 point increase adds value). 

The other thing I would do is open up credit lines (bank loans, credit cards, personal loans). At first you will probably not get access to a lot of money but over time showing the ability to responsibility manage credit will allow you to increase your limits. Having access to relatively cheap $ is important and takes awhile to build but it is something that you can start doing while you are getting started. 

One more thing, after reading and agreeing completely with Brent's post - before the auction set your maximum bid price (exact $ amount) and do not bid any more than this price. Only you can calculate what that amount will be (after taking into account how much work needs to be done and what you realistically think the ARV will be and what profit you would be happy with). If the auction is bid above that amount, let someone else have it and it is time for the next one.

Hey Will, sounds like it is a pretty good deal and that you have construction/repair experience. You should be able to get a fairly accurate estimation of what repairs will cost in this case (like someone else pointed out - add 10-20% to this amount). You can then come up with what your maximum bid price will be. Also, one other thing make sure you are bidding on the first DOT and that there are no liens on the property. Basically, you want to make sure the price you bid is the full price you will have to pay and that there are no hidden surprises. Not knowing anything about the Birmingham market or any retail prices, it sounds like you have a potential good deal here (assuming the price is bid up to X% more) and is definitely worth you setting your max price and making your bid at the auction. It can be scary starting out because of lack of experience but it sounds like you are definitely on the right track.

Hey Will,

I am in in N.C. but the deposit amount that auction.com requires for pre-foreclosure properties are set by the state. In N.C. that amount is 5% of the bid price payable in certified funds (cash, cashier's check). I am not sure what that amount is in Alabama but that would be the amount you would have to pay assuming you win the bid. Auction.com is just acting as an agent for the substitute trustee and they have nothing to do with the deposit amount. The exact amount is always determined by the final bid amount. 

You can purchase it before it goes to auction but you have to find the current owner and work out something with them.  You can then have a RE attorney conduct a closing before the auction begins. All pre-foreclosure laws are state-mandated so these vary a bit by state. I would find out what the pre-foreclosure process is in Alabama and that will shed a lot of light on what you want to do. 

Good luck!