All Forum Posts by: Kevin Krysty Jr.

Investment Info:

Mobile home fix & flip investment in Carthage.

Purchase price: $130,000
Cash invested: $18,000

The Good, The Bad, & The Ugly of my first Mobile Home Park deal.

What made you interested in investing in this type of deal?

Cash-flow

How did you find this deal and how did you negotiate it?

Driving on my way to meet a client (for my realty business) and saw the park, which looked distressed. I found the owner through the county records and contacted them. Over the next several weeks I was able to build rapport with the owners; we went to lunch, talked on the phone, figured out what they wanted, and found something that would work best for both of us.

How did you finance this deal?

The same local investor who held the note for the previous owner held a new note for us. We agreed to put $10,000 down, pay $1,200/month, with a 12-month balloon (unless otherwise agreed upon terms).

How did you add value to the deal?

Being one of three partners; the value I added to this deal was that I found it and that I was the managing partner (boots on the ground) handling all the day-to-day operations of the park.

What was the outcome?

We are currently cash-flowing ~$2000/month. But because of the current market, and the short-term plan for this property from the start, we put it on the market and currently are under contract, with a closing set for mid-December.

Lessons learned? Challenges?

The two biggest lessons I've learned are: 1) The responsibility of a property/park manager. I gravely underestimated the amount of work and attention needed for this role. 2) Even though there are great investment opportunities and money to be made, we're dealing more with people (& their lives) more than actual real estate. And being in the position of owner, we can either drastically help or hinder the people who are living there. That position holds a tremendous amount of responsibility.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Richard (Trey) Yelverton is the real estate attorney we have used and he and his team are fantastic!

Investment Info:

Mobile home fix & flip investment in Carthage.

Purchase price: $130,000
Cash invested: $18,000

In the spring of 2019, I found a 21 lot Mobile Home Park in Carthage, NC. It seemed to be mismanaged and ran down, so I tracked down the owners and asked if they were interested in selling. They said they were and after a few weeks of negotiations, we were able to come to amicable terms. At the time of purchasing, there were 13 residents who all owned their trailers (ROH) and 3 vacant park-owned homes (POH), with each lot being separately metered for water (public), and all residents paying their own utilities. I partnered with two other first-time park operators/investors and we were able to get everyone paying rent, small lot rent increases, renovating trailers and adding 3 new residents (ROH), and just cleaning the place up. It has become a great asset. We presently have it on the market, with a closing date set for mid-December 2020. Further details to come.

What made you interested in investing in this type of deal?

Cash-flow

How did you find this deal and how did you negotiate it?

Driving on my way to meet a client and saw the park looked distressed. Found the owner through the county records and connected with them. Built rapport over several weeks with the owner, went to lunch, talked on the phone, and found something that would work best for both of us.

How did you finance this deal?

The same local investor who held the note for the previous owner held a new note for us. We agreed to put $10,000 down, pay $1,200/month, with a 12-month balloon (unless otherwise agreed upon terms).

How did you add value to the deal?

Being one of three partners; the value I added to this deal was that I found it, I am the managing partner (boots on the ground), and handle all the day-to-day operations of the park.

What was the outcome?

We are currently cash-flowing ~$2000/month. But because of the current market, and the short-term plan for this property at the start, we put it on the market and currently under contract with a closing set for mid-December.

Lessons learned? Challenges?

The two biggest lessons I've learned are this: 1) The responsibility of a property/park manager. I gravely underestimated the amount of work and attention needed for this role. 2) Even though there are great investment opportunities and money to be made, we're dealing more with people (& their lives) more than actual real estate. And being in the position of owner, we can either drastically help or hinder the people who are living there. That also holds a tremendous amount of responsibility.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Richard (Trey) Yelverton is the real estate attorney we have used and he and his team are fantastic!

The age old question, “Should we build it new, or fix up the old?” I know a lot of people will say it depends on the area class (A, B, C, or D) you live in or is it even the best/highest use of the land?! But I live in a small, expensive market in NC (Pinehurst). The class A Facilites are a dream, the D’s not so much. But even the D’s are way overpriced.

So is it worth it to build on a busy corridor near the main hub of my market or try to get B, C, & D’s class properties for a lesser price? Because we could get land fairly cheap and develop (A-B) for a lesser price as well, and shouldn’t have any issue generating good rents and cash flow (depending on structure of money). So, would it be better to develop? Is that the best use of the land that we’d be using? Let me know your thoughts.

Investment Info:

Single-family residence buy & hold investment in Southern Pines.

Purchase price: $200,000
Cash invested: $7,000

My wife and I purchased our first home (live in flip w/ attached studio) 12/31/18. We purchased this property for $200k and with some simple cosmetic updates (~$25,000 renovations), the ARV conservatively comes out to $275k+. Not only that but we furnished the attached studio and put it on Airbnb and it has been bringing in about $1,500/month in revenue...paying our mortgage and putting a few hundred dollars in our pocket. House hacking + live in flip = happy first time home buyers/investors.

What made you interested in investing in this type of deal?

We were living in an apartment and we knew we wanted to buy a home, but as Robert Kiyosaki says, "Most people confuse their homes for assets when they're actually liabilities." Knowing this, I wanted to buy something we could add value to but my wife DID NOT want a total fixer upper. The fact that it also had the mother-in-law sweet (studio), we saw an opportunity to rent it out and turn our home into an asset that creates money for us, on top of the equity we could build into it.

How did you find this deal and how did you negotiate it?

I found this deal on the MLS. It had been on the market 45 days, and they had just reduced the price by $25,000, we scheduled a showing and made an offer that day.

How did you finance this deal?

FHA loan (my wife is the sole borrower)

How did you add value to the deal?

Through basic renovations. We installed engineered hardwood floors, painted the kitchen cabinets, installed new countertops, backsplash, underneath cabinet lighting, tile in bathrooms, new light fixtures, and furnished the studio.

What was the outcome?

We built/building major equity into this home, and we absolutely love living here!

Lessons learned? Challenges?

We had to replace the front wall because of termite damage (not found during due diligence), but it makes me more knowledgable about termites and the damage they create that I can share with clients and others. Also learning how doing all the work yourself can save money, but leveraging that out to others saves significant time and a lot of stress. There's a fine line...still learning that.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Our lender, Rochelle Boone, is fantastic. My good friend, Joseph Druther, helped me tremendously throughout a lot of this process giving me wisdom, insight, encouragement, and guidance.

Investment Info:

Single-family residence buy & hold investment in Southern Pines.

Purchase price: $200,000
Cash invested: $7,000

My wife and I purchased our first home (live in flip w/ attached studio) at the end of 2018. We purchased this property for $200,000 and with some simple cosmetic updates; new floors, countertops, light fixtures, etc., (~$25,000 renovations), the ARV conservatively comes out to $275,000+. Not only that but we furnished the attached studio and put it on Airbnb and we have been bringing in about $1,500/month in revenue...essentially paying our mortgage and putting a few hundred dollars in our pocket. House hacking + live in flip = happy first time home buyers/investors.

What made you interested in investing in this type of deal?

We were living in an apartment and we knew we wanted to buy a home, but as Robert Kiyosaki says, "Most people confuse their homes for assets when they're actually liabilities." Knowing this, I wanted to buy something we could add value to but my wife DID NOT want a total fixer upper. The fact that it also had the mother-in-law sweet (studio), we saw an opportunity to rent it out and turn our home into an asset that creates money for us, on top of the equity we could build into it.

How did you find this deal and how did you negotiate it?

I found this deal on the MLS. It had been on the market 45 days, and they had just reduced the price by $25,000, we scheduled a showing and made an offer that day.

How did you finance this deal?

FHA loan (my wife is the sole borrower)

How did you add value to the deal?

Through basic renovations. We installed engineered hardwood floors, painted the kitchen cabinets, installed new countertops, backsplash, underneath cabinet lighting, tile in bathrooms, new light fixtures, and furnished the studio.

What was the outcome?

We built/building major equity into this home, and we absolutely love living here!

Lessons learned? Challenges?

We had to replace the front wall because of termite damage (not found during due diligence), but it makes me more knowledgable about termites and the damage they create that I can share with clients and others. Also learning how doing all the work yourself can save money, but leveraging that out to others saves significant time and a lot of stress. There's a fine line...still learning that.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Our lender, Rochelle Boone, is fantastic. My good friend, Joseph Druther, helped me tremendously throughout a lot of this process giving me wisdom, insight, encouragement, and guidance.

Thanks @Jason D....I appreciate it! 

Hey folks! My wife and I have just finished converting our mother-in-law suite into a cozy little studio apartment, we threw it on Airbnb and it is getting booked up like crazy. My question is, what would be the most efficient way to operate this for the most tax advantages/breaks as opposed to claiming it on my own personal taxes? 

Appreciate the input. 

Kevin 

Hello Wise Biggerpocket folk, 

I have a question regarding cash flow. We have part(s) of our home that I believe could cash flow well with AirBnb, and my question is this, when cash starts rolling in...do I save it, pay off debt with it, pay off the house quicker with it, or do I use it to fuel a next investment? 

Thanks for all the help!

Sincerely, 

Kevin C. Krysty Jr. 

@Kris Bucci Understood. Also, is it common for perspective tenants to also try and negotiate price of rent? Have you seen if thats been an indicator of a financially sound tenant trying to get a deal or someone trying to pay for more than they could afford?