All Forum Posts by: Mike Reynolds

Quote from @Kevin S.:

@Logan M.

Thanks for the tips but these tips are just general tips that probably most of us are already aware of.  What would be helpful are tips that go deeper.  Yeah, different markets are different, every investor's goal and situation is different.  What we want to hear is how you did it, your story, your experience.  In snippets if you would/could.  One story at a time followed by more stories.  Trust me, you will have no shortage of audience.  Now that, would be more meaningful, and helpful.  

To be fair, judging by the “ask about the guru” posts on here, many people might not realize this. The gurus tell you that you can do anything with nearly no money at all. But sometimes it’s just plain old luck and good manners that can get you most deals. 

I’ll tell my story though. 

2019 I was living check to check pretty much. I was on BP and soaked up everything I could. I did a lot of side work to gain some money but it was taking time. I came on a MHP that was a good deal. Smoking deal. I didn’t have the down payment but I had a vacant lot in Galveston county. Most of the people on here told me it wouldn’t refi because it was vacant. I kept trying and one person on here told me that it could. Maybe. He gave me a few pointers on how and it did actually finance. I got 80k off of 100k value. Even though I was cash poor, I had good credit that I had been working on since I’ve been a member of BP. 

Getting the park under contract was the next hurdle. We had competition and they had bucks. I didn’t. We sent one of those “love letters” through our agent and he sold to us for the same price as the other guys offer because he liked us. If fact, he is still in our lives today because he is a valuable resource and now a friend. 

The park should have been a slam dunk at the bank. It was 230,000 with 26 units. But the previous owner only collected cash so we didn’t have an income to draw off of for appraisal. Bank said the land was only worth 200k and that’s all they would loan. They wanted 60k down on that. That only left me with 20k left over that I wanted to use for fixing stuff right away. So how do I get the park now? Was it over?

Went with hat in hand to the owner and asked if he would O/F the 30k. Our goal was to sell the houses and rent the lots. As we sold the houses we would pay on the side note and he would release the title one by one. He agreed. The houses that sold paid off the side note in 8 months or so.

Now, the hardest part was the double close. The bank doing the park kept asking where the money was for the down. I told them it was coming soon. The bank doing the refi was slow slow slow. It was the most aggravating part and I thought it would cost us our deal. We closed on the refi that morning and closed on the park that afternoon. It was that close. 

14 months later and a lot of work, we had it appraised. It was worth 750k and cash flowed nicely from day one. Still does. 

For me, I would say don’t pay a guru when you have thousands of them right here. They don’t always give you the answer you want but they usually give the one need. But also, never give up on your dream. I have more now but the first one is hard to forget. I learned more on that one than any other. 

Quote from @Anna Catron:

Hola!  We're in FW, TX, and building duplexes to hold and rent. Is there a calculator for that?  We'll build (150k) with cash and then finance (100k) out into a 15yr note. Our numbers are pretty solid as we already own a prototype in the same area. Running the numbers on BPs "RENTAL PROPERTY" calculator somehow feels incomplete. Any ideas? 

Thanks!

 Hey Anna, long time no see. I just came across this today. What specifically do you think you are needing? Maybe I can help and maybe not. I’ve been working in Austin for a year but send me a pm or text if you need to. 

Quote from @Jay Hinrichs:

Quote from @Bruce Woodruff:

If you're choosing to live in Cali, ya gotta get used to the prices. It is what it is. Part of it is the higher cost of operating a business there, and part of it is that the Contractors know that they can ask higher $$ and usually get it.

U used Redwood..  Redwood = big dollars compared to other materials..  But it last forever. dd you consider a trex deck ?

 I was going to say the same thing. The house I’m living in now, my father and I built in ‘76. It has redwood fascia. I’ve replaced rot pretty much everywhere but that. It will for sure last forever. 

Quote from @Robin Gravlin:

It's a joke really.  So many things that are out of my control.  The EAO is requesting things, they can't help me.  The police department can't release anything because the Fire Department can't say anything as Cal Fire has it under investigation, so they can't tell me anything.  It's a big circle with finger pointing and I am spinning.  

I am out of the country but when I get back next week, I will reviewing all of my doc's and  I am hoping the two properties are separate and if I let Colusa go to auction or just foreclose on it, I will be able to keep my Texas property as it brings me a substantial cash flow every month.  

 You said you lacked 6 weeks or so finishing? Was there any stain in the house? If a painter leaves the rags they stain with in a pile, they can spontaneously combust and cause it to catch fire. I have had it happen on one job and we were getting a CO the next week. If this did happen, it’s on the contractor. 

Quote from @Josh Fugle:

 Maybe I’m crazy but I read your post different than most of the others. Many here are talking about Ohio and I think you asked what kind of market. If that’s the case I’ll tell you what happened with my journey. I suffered from shiny object syndrome also until one came up and slapped me in the face. It was a home run from the start. It was a mobile home park. Now it’s one of many land lease communities that we have or will have. So I buy MHPs and turn them into communities where people want to live. I might even have to buy one in Columbus since it seems to be the place to be these days. I haven’t really deviated from this but I have been looking at some self storage and RV parks lately. I just haven’t found one of these that have slapped me in the face yet. 

 I have heard great things about MHPs. what kind of numbers do you see? how do you go about finding these deals? would love to talk to you more about it. 

I buy what I see will make money from the start. The old saying about you make your money when you buy and not when you sell applies. I look for a DSCR of 1.4 or better. Mostly I find parks that are owner operated and the owners are getting ready to retire. Usually they haven't raised rents in years. The park I am about to buy this week, the owner hasn't raised rents in 20 years. That's crazy and not typical though. Usually it's about 5 years or so. Most always off market and just do a drive by and get the owners info and just ask. Postcards dont usually work for these types of owners. They want to look you in the eye and tell you about their kids, dogs and how the weather is. You get a yes or a no but it's always fun to meet new people anyway so it's not really a burden. It's actually kind of fun.

Quote from @Ashley Campbell:

@Mike Reynolds Nice! Mabelvale is a growing area.  South of LR (Benton/Bryant) is a growing area as well.  We lived there for 3 years and could kick ourselves for selling our house when we did.  Another good potential area for us.  and Mt. Ida is a beautiful area! 

you likely are aware of this if investing in Mobile Home parks...Benton/Bryant had one for sale recently in the last two months.  Not sure if it's still on the market though. D

Do you self-manage or use someone local?  

My sister is also my partner. She lives in Benton. But we sell the homes and just rent the lots. We have our days mostly free. Consider that on many SFH with the BRRRR method you rent and hope to get a few hundred a month free and clear. ThEn you still have maintenance and Capex. When we sell the homes it does many things. First, it brings in tenants with a different mentality. They are home owners and not renters. They tend to take better care of the property. They are responsible for the upkeep on the house and we are responsible for the land and underground utilities. Then we can make more than a few hundred per month per house and have much less Capex. Plus we are not bothered by diapers flushed down the toilet and late night calls about things like that.

We have one manager per about 3-4 parks. As long as they are not that far away from each other. Mostly the manager is phone duty to keep them from calling us all the time. Software takes care of the rest. 

Everyone is griping about the economy and interest rates. What better inflation fighter than to offer low income housing that these people can sell later and buy something better when they are ready to make a change? I don't worry with interest rates either. We bought a park last year when the commercial rates went to 8%. We are netting 7k a month with a DSCR of 1.65. When the rates go down in a few years we will do even better. If they don't we will have equity and probably appreciation and still probably be at the same net.

If you choose to go this route and like this model, I can hook you up with a banker that is awesome and loves these. He only lends in AR though. 

Quote from @Ashley Campbell:

@Mike Reynolds Isn't it funny how that works!  I'm really not opposed to investing in AR.  Based on my research, it just seems as if more jobs moving to TX and appreciation is likely to take place in some of those "smaller" cities outside of DFW.  Don't get me wrong NW AR is booming!  This is my dilemma though...where do I invest?  I know it's not my backyard (even though folks are trying to convince me of that). Just need to get started! I total get why I've heard over and over people getting hung up on the first investment LOL.  Really our goal has been to acquire 2-3 properties by YE...so still time to hit our goal! 

Do you mind sharing the area in AR you invest?  How long have you been investing?  I'm all ears if someone is willing to share their experience! 

 Mabelvale was the first place. It’s close enough to LR that’s it’s not really small town though. Beebe and signing a contract for a property in Mt. Ida later this week. 

I buy properties that are below retail and there are plenty around the area. I do mobile home parks. Mostly owners that are tired of the grind and want to retire and enjoy life. The first one I bought for 60k down. 

Quote from @Josh Fugle:

I am struggling to find a market that fits me. SFH, small multi, apartments, industrial, car washes, laundry mats, storage. I have always been a generalist, master of none skilled at most. good CoC seems easy enough to come by based on the calculators 7-8% on industrial 25-30% on apartments. SFH in the 10-14% and everything else in between.

how did you find your market and what has made you stick with it so far?  have you thought about changing and are waiting to pull the trigger? 

 Maybe I’m crazy but I read your post different than most of the others. Many here are talking about Ohio and I think you asked what kind of market. If that’s the case I’ll tell you what happened with my journey. I suffered from shiny object syndrome also until one came up and slapped me in the face. It was a home run from the start. It was a mobile home park. Now it’s one of many land lease communities that we have or will have. So I buy MHPs and turn them into communities where people want to live. I might even have to buy one in Columbus since it seems to be the place to be these days. I haven’t really deviated from this but I have been looking at some self storage and RV parks lately. I just haven’t found one of these that have slapped me in the face yet. 

The thing is, you do you. We don’t know how much time you have to spend or what you are willing or able to do. If you keep going on this journey, you will find out what you will be investing in. 

Quote from @Ashley Campbell:

Background:  Late 30s, married with two young kids (4 and 2).  My husband and I both have solid W2 incomes (both remote).  We live in small town Arkansas with a very low cost of living.  No plans to move as this is where we want to raise our girls.  We have been your average corp job employees for the past 15+ years (maxing out 401K, emergency fund savings, etc.).  About 5 years ago we hopped in a RE syndication and pulled out of it recently to take a more active role in our investing (returns where meh), along with trying to supercharge our financial goals in retiring early.  Theoretically, we are on track to retire in our mid 50s.  But why not try earlier and start gaining some income outside of our W2!  And the grind is getting a bit monotonous...Plus, I've always had a keen interest in RE and ready to dive in.  I'm a specialty insurance underwriter by trade; therefore analyzing deals and numbers is my jam.  

Our market doesn't make sense from a longer term rental standpoint, so we've been researching different areas to focus on and get started.  Man, it's sooo overwhelming!  We've pretty much honed in on North Texas area.  We've been exploring the OmniKey Group/Slaughter Investing, which we came across through the RealWeath (Kathy Fettke) channel.  Does anyone have any experience with these folks?  Any feedback would be appreciated.  

We have approximately $150k liquid cash ready to go and can likely gain more capital in a fairly quick manner.  I keep getting hung up if we should focus on diversifying with two different houses in two different areas in North Texas or go for it on a more expensive type Duplex.  On paper the duplex projects higher returns, but of course, that's just a projection.  Interested in some thoughts here! PS...anything outside of our market, we do plan to hire a PM.  

Now, we do live in a small town, touristy area that does lack in nicer/unique short-term rentals. Could be an opportunity here. In my head I ask myself if we should go for one less capital intensive LTR and give a local STR a try (for the tax advantages) as well. We really need to sit down with an experienced RE CPA. We've visited with 3 that just don't get it. Personally, I need to do more homework myself on the local STR part to see if numbers make sense.

Appreciate anyone's feedback! 

That’s funny. I live in Texas and invest in small town AR. Not just small town though. Think about this if you will. Texas has a minimum wage of 7.50(I think it’s still that anyway) and Arkansas has one of 11.00. Houses are cheaper in AR than in Texas and so is the property tax. Even paying the state tax up there, I come out better buying in Arkansas. 

Let me know what you are looking for and maybe I can help. 

Quote from @Richard Edgar:

I’m a new investor. My family has a family farm consisting of 3 parcels of land. 2 parcels are owned free and clear. Each parcel is worth roughly $350K. That said, we’re currently cash poor. Any advice on the best way to leverage all  this equity if I find any good opportunity(s)?

I was in the exact same boat as you. Don’t let people tell you that it is impossible to cash out on bare land. I had 50 people on here tell me you couldn’t. I had one tell me it’s possible. And it was. It wasn’t easy but it’s possible. Keep trying.