All Forum Posts by: Paul Moore

Good to see this thread restarting. I agree with @Scott Meyers on self-storage. Mobile home parks have some surprising value-adds as well.  Our firm invested in a MHP that spent $100,000 adding a one-acre paved gated paid parking area. The annual revenue on that should be $120,000 at full capacity. 

Assume a 6% cap rate. The CRE value formula states that $120k/.06 = $2 million increase in value. If you have a $5 million MHP leveraged at 60% ($3m debt + $2m equity), that potentially doubles your equity. That is a whopping value-add!

James,

A hearty congratulations to you!  My only regret about self-storage is that I didn't start investing in it a decade or two ago. Thanks to @Scott Meyers for helping us get started. 

Thanks for serving our country!

Congratulations Maxwell! It's hard to find deals in this market and it looks like you got a good one. 

@Scott Blackwill: Great question and one that many investors should be asking. I completely agree with @Todd Dexheimer's reply above. I wrote a slightly controversial post on this topic here: https://www.biggerpockets.com/blog/real-estate-deals-exist-where-to-find-them

After doing this for the better part of 2 decades, and studying Warren Buffett's model, our team decided to go the semi-passive syndication route. Like Buffett, we spend a lot of time and effort in due diligence on the operator/syndicator. Track record, background checks, experience through the Great Recession, etc.  When we feel great about them, we feel comfortable yielding control to them. We get professional management, a great deal pipeline, outsized returns, minimized risk, and virtually zero hassle. 

Buffett has become the most successful investor in history using this model. (With less than 30 staff in the home office of a $500 billion company.) Now that we've done it for a while, it's easy to see why. 

@Leandro Bidal.  If your goal is truly passive income, I agree with others who said they would invest with a great syndicator. I talk to numerous investors weekly, and after doing a bunch of one-off single families, many conclude: "Why am I working harder than I need to... to make less than I could?"  

I've been at this for 19 years, and there are a boatload of ways to make money and build wealth. But there are some ways that are easier than others. I wrote about this topic recently in a somewhat controversial post:  https://www.biggerpockets.com/blog/real-estate-deals-exist-where-to-find-them

Best wishes! 

Hi @George Yu.

Congratulations on your success! I wrote a book on multifamily investing but we beat our heads against the wall for years trying to find deals that made sense. Your strategy is one of the few that works in this crazy compressed cap rate environment. My hat's off to you! 

Our team doesn't have the appetite for much ground-up (we are more risk-averse now), so we expanded into value-add self-storage and mobile home parks. There are many mom-and-pop sellers in these arenas, unlike multifamily, where 93% of the facilities over 50 units are owned by corporations. 

I love your story, @George Yu. Please reach out to me if you'd like to be a guest on our wealth-building podcast, How to Lose Money. We recently interviewed a prolific Shark Tank guest on the show. 

@Tyrone Hood, I would look long and hard at the risks and the time it takes to do a startup mobile home park. It could take many years to fill up and get to breakeven. You may be better off to invest in an existing park. 

Hi Weina,

There are about 100 or so MHP brokers in the US. These brokers often carry off-market listings and it would be great for you to develop relationships with those in the region you want to work in. Good luck! 

Matt,

I know of at least 2 instances where these type of things have been overturned. Once there was a very old deed restriction left in someone's will from the mid-1900s. The new owner petitioned a court to get it overturned and made millions developing a mall and retail there. 

The other instance was in the case of an HOA that expired automtaically if it wasn't renewed (it wasn't) in about 25 years.

I think you have a good shot at making this work, and the harder it is, the better it may be for you.  

Sincere thanks for serving our country! 

Jason:

 Thanks for consistently putting out great content on your podcast! 

Hey Ann,

So I'm in the weird position of writing a popular book on multifamily investing humbly called The Perfect Investment (2016)... doing a BP podcast on that topic... then making a switch to self-storage! I love self-storage, and like Scott Meyers and others here, am so glad to have discovered it. So many advantages over other asset classes. 

I attended 3 of Scott's events in 2018, and my fund now focuses on self-storage and mobile home parks. Feel free to reach out if you want to talk about why I love these asset classes.