All Forum Posts by: Michael Hooper

I'm looking into purchasing a property that is being marketed as an "Extended Stay Hotal/Apartment". I was looking into multifamily apartments, but this one popped up. All of the tenants are week to week and pay in advance. All of the units are fully furnished. My question is, are there any major differences between operating a Hotel or an Apartment? Is this a Hotel or Apartment? Rent for the area is around 600-700/month, but there records show they consistently get around $225/week, which appears to be much better returns. I know cleaning will be hire since you presumably have higher turn over, but I'm just not sure what else to consider. Any thoughts? Should I just convert this to year lease apartments, or keep it as is?

I'm currently looking at a 32 unit apartment complex (all 1 bedrooms) in Cincinnati Ohio. We're in the middle of our due diligence process and we just found out the complex has all aluminum wiring. From what i understand banks won't loan on aluminum wiring, so seller financing is probably how were going to have to go. Also, I'm told insurance companies won't insure it until the wiring is replaced. Is that true? Does anyone have an estimate for how much it would cost to replace? Should we just walk away at this point or just figure this in to our offer?

I'm looking at getting around 30-40 unit apartment complex in Cincinnati, OH. It seems that almost every complex in the area pays for water. Does anyone have experience switching a property, if possible, in this area, over to individual water metering? Should I offer to decrease rent with the change? Will I experience a mass exodus? Thoughts?

@Tamiel Kenney Thanks for the concern. I've listened to about 75 of the podcasts so far on the site, and ran numbers on about 30 multifamily properties so far. I will also make sure anything I buy is within the 2% rule. And I'm trying to do as much due diligence as I can think of on the properties I look at. Rent Roll, income taxes statements, list of expenses (Utilities, property management, repairs, vacancy, taxes, etc). I know that, by no means, makes me an expert, but I'm hoping that partnering with someone who has done this before will help me on the rest. You are right that I don't know very much about financing MF, that part is where I'm probably the most concerned. I have around a 720 credit score, but I really just don't know how that part works once we form an LLC together. I really just trying not to do anything that would affect my credit score right now.

@Andrew Johnson Thanks for the feedback. The 40 units just comes from how large of a loan we are comfortable getting with our level of down payment combined with the average price per unit in the area. 40 units isn't a set number, its just what we came to working backward from how much money we had to work with. But we'd be fine with a 30 unit if we found a deal on it. Also we'd have about 50k in reserve between the two of us, were you suggesting 50k a piece (100K total) or is 50K between us enough?

I bought my first house in cash back in 2011. I moved out in 2014 and rented it up until last month, then sold it. The property sold for double what I paid for it, so i'm sitting on about 150K in cash. I'm wanting to continue investing in real estate, but I've really only own one investment property in my life. A friend of mine, who owns a 12 unit apartment complex is wanting me to invest with him in a 40ish unit apartment complex. I've never done apartment complexes before, but he has. I've been doing a lot of research, and it seem like a great idea as long as we wait for the right property. 

So my question is, assuming I trust this friend (which I do), should I pursue this? Is it an ok jump to make, or should I start smaller and work my way up? I do have a full time job, and will slowly build up more to invest, but this would tie up all of my investment capital for a while. Thoughts? 

Thanks

@Curt Smith Hmm... thanks for the advice. Sounds like I may not want to start mobile home park investing with this property. I really appreciate it.

@Curt Smith Thanks for you input, it makes a lot of sense. To be fair to the estimates, its $350 a month in rent, I said about because they range from $325 to $375, but they average to $350 (Also, the house rents for $550). But $50 across 10 rentals adds up. The owner also listed his finances from the previous year which amounted to about $700/month. I don't know if that's low/average/high for mobile home parks, but it seemed low compared to the rent. Also, $150K is the asking price. Its been on the market for 7 months, so I was hoping to get it around $130K - $140K. Is there a point where the math does work there.

Also, you're right I'm not looking for a crazy amount of work, but I don't mind doing a little however. Do property management companies handle mobile home parks or do they stay away from them?

Any thoughts on the refi options if purchasing with cash? For some reason I feel like banks would hesitate to cash out refi a mobile home park? Is that feeling justified?

I've found a mobile home park with 9 mobile homes (owned by the park, not the tenants) and a house on the property. Each unit is rented out month to month at about $350 per month. The rent roll look a little sporadic. ranging from about 60% occupancy to 85% occupancy. Its $150K. I've got the cash to purchase it, but I don't want to tie all my cash up in that investment for long. Is it relatively easy to do a cash out refi on a mobile home park, or should I seek to just purchase with a loan. I've only owned 1 rental property before, and I've also rented out rooms in my home. Is it a good step to move to a mobile home park? Or should I do something else before moving into a mobile home park?