All Forum Posts by: Phil Collett

I recently started attending our local rei meetings again and vip member had a bunch of deals in Ohio. I am in Southern California, but after listening to the last 2 years worth of podcast last month while painting 3 walls of my house twice (before hiring it out, not good at this) I started looking at out of state investing. When I saw a 13 cap on the park, and Brandon Turner and Mindy Jenson just did one and seem to want a bunch more, I got excited. I read a bunch of posts last night and thought it over today and bugged my cousin that does commercial loans. 

Anyways, I started going through the checklist https://www.biggerpockets.com/renewsblog/2013/04/26/mobile-home-park-due-diligence-checklist/ and I will ask for answers on the sewar situation, and try to get the last 3 years of rent roll and PL statements. Not sure how to check on zoning and maybe the city trying to push out parks. This one seems to be surrounded by houses when I found it on Zillow.

I was skeptical on some owner financing at 6 to 10 percent after I bring in 25% or so until reading that mobile parks are hard to get coneventional or commercial lending on. I sign on a HELOC tomorrow for enough to cover the whole park at 5% from bofa ( my buy and hold I am in still) . So now that owner finance offer makes sense and checks out from what I read here.

The park owns 13 of about 25 mobile homes, it is at capacity and has had some improvements over the last year. Not sure on the exact reason they are selling and I am hesitant. Small park, so I guess that is why the cap rate is so high from what I read to attract buyers as larger parks get more interest. This park with the mobiles included costs less than a condo where I am but seems to cash flow like crazy.

Any words of wisdom, or advice. We have a few guys that love mobile I can take to lunch and take their class if I buy this to become more informed. They talk about their Lonnie deals, etc and sell their 10% notes on some trailers. I have been going off and on to those meetings for 2 or 3 years.

I am leaning on pass as it is so far out of my comfort zone, but I need to do something eventually in RE so should this be it?

Doesn't look too bad, I have a property manager hopefully going to look at the numbers for me.

Also, if you need your first deal and a place to live there were a couple of short sales in Heritage. I have seen 2 shorts, and 1 REO. the flip numbers don't work out (5% margin after sales) but the live in flip numbers sure do....50k equity compared to last years sale prices when I looked.

I also sent a connect request to you.

View report

*This link comes directly from our calculators, based on information input by the member who posted.

High Desert in Southern California. Triplex.

unit 1a: 2 bed
unit 1b: 1 bed

unit 2: 1 bed

Rentometer (and zillow) put rents at about $900 for 2 bed, $800 for singles. Schools are 2-3 range. Guess this is a C or C- area. About 45 minutes from my primary.

Current rent is $2k for all of them

203k, but there might be an upper limit

I'm a noob, so I don't know. I exported an image of if though from the pdf.

View report

*This link comes directly from our calculators, based on information input by the member who posted.

So a little background. I am thinking of a live in flip with this house and sell my current primary residence in the process. I ran this report by some REI at a local meetup in Riverside a few weeks ago and for a 5% margin it was not worth it. I figured that before asking and running the numbers but wanted to see how much margin they typically use. I have been going to their meetings off an over over the years.

As a live in flip, and pulling my equity from my primary to do some turnkey flips in Houston into Rentals that cashflow I figured it may be worth the effort. The Houston ones would hopefully give me:

a. positive cashflow

b. enough equity that a 10% market correction would not effect me (if and when that happens)

My primary residence was bought in 2011 at the low as a short sale with some robo signing agreement so I did not pay any closing costs. I bought for $299k in Rancho Cucamonga and the house is now worth $468k redfin, and $520k Zillow; I owe $224k @ 3.6% 30 year. So there is some equity to play with. I also have money in a roth IRA and can take $50k from a 401k loan @ 4.5%. I am finishing painting the exterior of my house (I spent 3 days and have some guys that will finish when they paint my parents house) and figure if I wanted to sell, it should not be a problem because the house is in great shape, and this is the summer family moving time market.

I know the area well as I my family has been here since 1986. The live in flip house is in a slightly less desirable area, but barely anymore as they are in the same school district of Etiwanda which is very good. I was going to do an equity share for my friend last year and this Heritage area was pretty hot and everything I looked at was going for $450k, even when they were trashed (looked at about 10 houses). So I figure $440k arv to be safe. It is a bank REO bought at auction by the bank for $355k.

So, live in flip:

$360k ish offer, about $30k in repairs probably, worth $440k ARV

Sell primary:

$480k (split the redfin/Zillow estimate) - $224k remaining loan (I will miss the low mortgage of $1650/mo)

Worth it?