All Forum Posts by: Patrick Sears

Thanks for the replies.

Yes, I guess it would be a loan, secured by the home and the projected cash flow.  

Do you think there would be interest in that?

Hello,

Wondering if anyone has any experience with developing dedicated rentals using brand new single or double-wide mobiles on land vs rehabbing older homes for rental use.  Obviously, the new home route is going to be much more expensive upfront, with a longer payoff (in my area we are talking $60K+ for 20 yo rehabbed DW on rural land vs probably $120k for the same thing new, and probably ~70% of those numbers for singles) .  However, I know from personal experience that old homes take a long time to rehab yourself (and hiring reliable contractors has become expensive-if you can find a trustworthy one).  

Theoretically, you should be able to rehab an older home to "tenant proof" it as well as ordering it that way new from the factory, but then the price starts to get up there too.  The new home deal however would have brand new septic and well.

What would yield better "forced appreciation"--forced appreciation from rehabbing the house (make money like a "flipper"), or forced appreciation from putting together a new house on a lot with new foundation, septic, well, etc...(make money like a new home builder)

There is also the subject of BRRRRing with the local banks (or 21st Mortgage or private money) and what they would rather loan against.

From a purely business point with a 15-year cash out horizon on a portfolio of 20 or so homes (or maybe a longer horizon with 50+ homes if I decide not to conquer the world and just do this until I die) which would you all do?

Thoughts?

Hello,

I was wondering if anyone has thought about selling a partial on a rental property income stream vs a standard seller-finance purchase contract?

I can't think of any reason why you couldn't; the investor could still take a 1st lien position on the home (btw I'm talking about a free and clear home).

Would any traditional note buyers be interested in something like this?

Hi Paul, 

thanks for the reply.

What exactly do you mean by " sure-walled"? And what do you do about the perimeter masonry? What is you typical cost for all of this?

$425 x 12 /$10,000 = 51% cap rate (before the inevitable maintenance costs, which should be low for awhile if you rehabbed it correctly).  Not to many places you will find that return.  The issue is, most parks don't want rentals-they want owner occupants.

Can you sell these lots individually?  That used to be known as a "condominium park" back in the day.  Most zoning these days no longer allows it, but if it is allowed where you are that could be another way to make money.

And Harrisonburg is becoming a high-dollar area, If you developed it and kept it I would think lot rents would only continue to go higher over time, possibly much higher.

Hello,

Wondering if any of you investors who flip MH's on land for cash or on owning financing/rent to own go to the trouble/expense of converting them to a permanent foundation if they are currently not on one.  I would think it would increase the sale price as well as ease of bank financing down the line if your owner financing buyer wanted to switch to a bank loan and cash you out.

Any idea on the cost these days to pour footings and run a cinder black perimeter wall for an already placed home?

Thanks!

Hi Chris,

Thanks for the reply.  BTW: loved your "Top 5 Notes Predictions for 2020" podcast

Yes, I forgot that banks often don't want to bother with subprime loans that involve lower priced properties (which admittedly are becoming rarer every day). 

I'm thinking of flipping mobile homes on land in an area that's in the path of growth and offering seller financing; basically getting into the lending business.  There's definitely rental demand in the area I'm talking about, but I'm thinking that carrying paper with owner-occupiers might be more scalable that dealing with MH tenants (despite the loss in tax benefits) so glad to hear there is still demand for seller financing out there.

One thing I've always been somewhat concerned about carrying paper at a fixed rate is a rise in interest rates/inflation rates eroding the value of a longer-term note portfolio.  I've always assumed that interest rates just HAVE TO eventually go back up from the historic lows we've enjoyed over the past decade.  But with recent events, now I'm not so sure... It seems like DEFLATION might become the new norm. We already have NEGATIVE interest rates in multiple countries, and the US treasury rates just hit new historic lows courtesy of coronavirus.  That said, with a permanent 0.5% (or less) interest rate environment a distinct possibility, a 10% seller-finance note might look pretty sweet to just about everyone...

Thoughts?

Hello,

Considering how cheap mortgage money has become, and how many mortgage companies are out there offering credit to just about any FICO score someone may have, is anyone here still having success offering Seller Financing on your properties that you want to carry paper on? Are you still seeing a demand for it?

Thanks!

Hello,

Considering how cheap mortgage money has become, and how many mortgage companies are out there offering credit to just about any FICO score someone may have, is anyone here still having success offering Seller Financing on your properties that you want to carry paper on?  Are you still seeing a demand for it?

Thanks!