All Forum Posts by: Paul Moore

@Chris Moss. You may want to get the book Real Estate on Your Terms by Chris Prefontaine before you finalize this.  It explains many variations on the "Subject To" structure. Great book and program. 

Hi @Alfredo Coria. This may be a cop-out, but I don't think I know enough to advise you. Perhaps you could go to a local REIA if you are in the area and seek some advice there. And/or call some local real estate agents and developers.

Developing a new mobile home park is extremely challenging, by the way. That is why so few new ones come online annually. 

@Alex Merkel you really did get some great advice here. I have benefited little from an engineering degree, but much from an MBA. But far more from all of the mentoring I have received in paid coaching programs. There are a lot of great REI programs depending on what you want to do. Michael Blank, Scott Meyers, and many others have great training and networks to meet others, do deals, etc.

Best Wishes! 

Hi @Andrew Sprague. You are in the right place!  I must agree with @Michael Wagner that you could skip the residential realm and get right into self-storage.  I will be glad to send you an eBook on that topic if you're interested, but it would be far more helpful if you can get training from Scott Meyers, a long time BiggerPockets contributor. He has some great training as well as a mentor network that will allow you to partner with others on deals.  

If you decide to go the SFR route, you may want to wait a little longer until the aftermath from this Covid situation hits real estate. And consider other locations that have lower downs and higher highs (more variation in price) like Florida. There is a great book by BP contributor Chris Prefontaine called Real Estate on Your Terms that could be very helpful now and more so in the near future. 

Good luck! 

@Todd Nagel.  Great question and great feedback above.  If you are looking to raise a small amount from a close-knit group, as @Jacob Blackett said, you could probably do a direct LLC. I really like what @Greg Dickerson said as well. 

If you need to go the syndication route, you could get a book called It's a Whole New Business by Gene Trowbridge, but you must get the latest edition since it covers the many legal changes that came through in the last decade.  There is also a syndication course that you can get through The Real Estate Guys, who were a guest on the BiggerPockets podcast in 2019.  

Good Luck! 

Hi @Nick Jansen. This may not be what you are looking to hear, but I would ask if you would consider stepping back first and getting some serious training on MHP operations before proceeding.  I'm guessing you are busy, but even so, if you could do a home study course at least it would help you a lot in making this decision.  (Maybe I'm being rude by assuming you haven't, but I'm just saying...). Frank Rolfe, who was on the BiggerPockets podcast in the summer of 2019, has live and home study training available.  And there is a book called Trailer Cash by Jaimie Smith as well. 

You will want to be sure not to directly apply a cap rate to the income. You need to break out park-owned homes separately when calculating the value.  And be sure to consider the ramifications of well and septic vs. city utilities.  

Best of luck! 

Hi @Christopher Smith.  Great question.  I would recommend that you learn all you can, store up as much dry powder as possible, and wait for the deals that will be coming down the road due to this downturn. There is no way to tell when they will start or where/when they will bottom out, but last time it took over two years to reach the bottom.  

I would focus on creative financing opportunities like subject-to mortgages, lease-to-own, lease-option sandwiches, wrap mortgages, etc.  You can learn a lot about this from a book called Real Estate on Your Terms by BiggerPockets blogger, Chris Prefontaine.  He will steer you in the right direction! 

Good luck!  

@Kasey Libby.  You got a lot of great advice here!  I love what many shared, including @Ronan Donnelly and @Jacob Blackett plus others.  I recommend getting to know an operator/syndicator very well and then only invest a portion of your capital with them to see how you two get along.  Then consider more later.  There are great operators in the Atlanta area who have done well in multifamily, self-storage, and more.  

You could try to attempt to invest and get mentoring at the same time, which could be tough but worthwhile - especially if the syndicator is in the North Atlanta area.  

If you go this route, you should consider the brand new book by Brian Burke called The Hands-Off Investor. Brian was also on the BiggerPockets podcast this week.  Good luck! 

Hi @Tracey Robinson as well as @Mark H. Porter and @Natasha Sumner. 

I just spoke to an investor with this question a few hours ago.  I reviewed 7 options with him.  I agree with many of the comments above, including the likelihood that some of the best deals ever are around the corner and it wouldn't be the end of the world to take cash and pay the tax.  

Here is a summary of what I shared... 

1. Find your own deal to invest in. 

2. Find a great commercial operator to JV with (you bring part of the cash and others bring some and you are Tenants-in-Common but they do operations which is great for you.)

3. Invest in a Delaware Statutory Trust (many options available, but be careful you invest in a recession-resistant asset). 

4. Invest through a Deferred Sales Trust (this trust allows you to defer capital gains for decades). 

5. Use an Installment Sale (could allow you to defer capital gains a few decades). 

6. Invest in an opportunity zone project as @Chris Montgomery wisely pointed out (but be sure not to let the tax tail wag the dog, especially right now!). 

7. Invest as a tenant-in-common in a large CRE project that loans you back (say) 90% of your cash to reinvest while they manage the property for a few decades. I know of an operator that does this with Amazon sorting centers and it is pretty impressive.

I have contacts for each one of these deal types if you want to reach out. I could point you in the right direction. 

Brian,

Thanks for writing this critical book! I love your assertion that the most important thing about vetting a sponsor is assuring they are moral people. A great sponsor with a mediocre deal is better than a mediocre sponsor with a great deal (but of course we want both to be great!)