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All Forum Posts by: Patrick Sears

Patrick Sears has started 49 posts and replied 129 times.

Post: Manufactured/mobile home rentals

Patrick SearsPosted
  • Midlothian, VA
  • Posts 130
  • Votes 17

While we are on the subject of mobiles as rentals, what is everyone opinion on using older/repoed homes and fixing them up on the cheap vs buying new homes (single or DW) for much more money?

Pros for Cheap:  Excellent Cash flow (2% rule!) and payoff in 10 years or less

Cons for Cheap:  Outdated interiors, questionable insulation (I HATE getting calls in the middle of winter re: cold house-and this is on my old stick-builts); plastic sinks, cheap cabinets, and the inevitable nuisance repairs-even after rehabbing them.  CHEAP!

Pros for New:  I could order to specification and beef up things for rental use-Energy Star insulation, engineered flooring everywhere (no carpet), real windows, beefy cabinets, PEX plumbing (no POLY!), ceramic sinks, etc..  A rental built to last

Cons for New:  Expensive ($60-$90k PLUS transport, set-up and probably perm foundation) payoff in 15-20 yrs, ~1.25% rule 

In what I am thinking, both new and old would require transport and set-up with rural utilities; existing properties come available from time to time but the market here is pretty tight; nice 10-15 year-old DW's on 2 ac+ routinely go for $125-$150+ around here.

BTW:  There are no $20k single-wides on land that need $2000 to be rent-ready around here....

Thoughts?

Post: MLO Requirements for Virginia

Patrick SearsPosted
  • Midlothian, VA
  • Posts 130
  • Votes 17

Hi Chris, thanks for the reply.  

I guess I could just call the VA SCC and see what they have to say about it. The NMLS says you have to be an MLO, but the individual states can add on extras like being a licensed "lender" as well (extra $$$$). Also, in Virginia to get an actual "Lender" license as a company, they want you to have $200K in "readily accessible funds" to start your business, whatever that means.

I know people are screaming for quality notes, so going the extra mile to start a business that actually creates notes on rehabbed properties for sale to owner-occupants, then selling those partial or whole notes to investors could be a good move.  

Even better down the road might be setting up a correspondent relationship with a larger lender that might buy them from you at little to no discount...

Thoughts?

BTW:  Love your podcast Chris!
   

Post: MLO Requirements for Virginia

Patrick SearsPosted
  • Midlothian, VA
  • Posts 130
  • Votes 17

Hello,

Wondering if any of my fellow Virginia BP posters can clarify what exactly are the licensing requirements to seller finance my own flips (more than three per year/as a full-time business). I know I will need the MLO individual license, but it sounds like I might need the company-level lender license as well? Or the VA broker license? Or are they the considered one in the same? (they kind of make it appear that way on the VA SCC website).

If I need both, than I guess I would be the owner of my lending COMPANY, as well as the licensed MLO sole employee of my own company?

The VA SCC website also mentions an "independent contractor" status as well. Would that apply to me?

Thanks! 

IF they always (AND I MEAN ALWAYS) get caught up INCLUDING YOUR LATE FEES (you do collect late fees, right?) within 3 weeks of the due date, then I say keep them going.  Nothing like repeated late fees to bump up your yield (just ask Bank of America).  Some people are just habitually "10 minutes late to work" (like me...)

HOWEVER, if this is a situation where they are paying later and later, or going past 30 days into the next pay cycle, THEN GIVE THEM one more chance-IF THEY FAIL AGAIN-DUMP THEM!!  THIS IS A LANDLORD'S MARKET NOW

Hello, 

I'm thinking about doing some ground-up rental property manufactured homes in semi-rural central Virginia, and they would be on new septic systems.  

Anyone have any experience with septics for rental properties?  Do tenants destroy them?  Are they a big hassle requiring constant calls to the plumber?

Thoughts ?

Thanks!

Post: First mobile home park Purchase

Patrick SearsPosted
  • Midlothian, VA
  • Posts 130
  • Votes 17
Lol, you keep buying parks with 50% cap rates and you will be overtaking both Frank Rolfe and Warren Buffett! I'm so jealous...

Post: Where are people buying notes today?

Patrick SearsPosted
  • Midlothian, VA
  • Posts 130
  • Votes 17

@Chris Seveney Yeah that figures.  Another bright idea bites the dust!

Post: Where are people buying notes today?

Patrick SearsPosted
  • Midlothian, VA
  • Posts 130
  • Votes 17

@Chris Seveney @Andy Mirza I would think one benefit of having a neutral 3rd party servicing your loans is that when it came time to sell your paper, the quality of the payment history couldn't be called into question by a potential note buyer, vs. the note buyer having to take your word for it if you are doing your own servicing.

Still, servicing OTHER people's notes might be a business worth looking into, depending upon the potential profits margins vs. regulatory headache.  How many notes do you think an average servicing probably has on their books?  

Post: Where are people buying notes today?

Patrick SearsPosted
  • Midlothian, VA
  • Posts 130
  • Votes 17

@Andy Mirza Why do you think the reason is for all of the note servicers out there not being any good?  As a professional lender, do you think there could be an opportunity for someone to come in and take some market share? 

Has your own organization thought about getting into the servicing space?

Post: NPN Story: Mother Bails Out Deadbeat Son

Patrick SearsPosted
  • Midlothian, VA
  • Posts 130
  • Votes 17
Originally posted by @Andy Mirza:
Originally posted by @Patrick Sears:

Wow. That is totally ridiculous.  People are dirt.  Funny how none of these shenanigans are covered under Dodd-Frank...

 Dodd-Frank helps borrowers, not lenders, unfortunately. Big banks pulled their own shenanigans by basically not having their stuff together and screwing a few people over. Now, we all have to deal with extra burdens ....

Yes, emphasis on FEW.  Unless we are talking about outright fraud by lenders (which was already illegal before 2008) I really have very little sympathy for the people who took out loans that were too big for them.  Whatever happened to personal responsibility?  And let's not forget that there were PLENTY of people who were able to buy much bigger personal homes, and many more rental properties than they would have been able to normally buy, and they hunkered down, kept it together and eventually came out way ahead when the market recovered.  

You never hear those stories in the news because it doesn't fit the socialist narrative.