All Forum Posts by: Rich S.

I'm gonna go out on a limb here and say from your post, you won't charge your Mom rent no matter what and you won't move her to a different place unless she wants to.  Many of the people on these forums will tell you otherwise, but the bottom line is, my parents would never charge me rent and therefore, if I get in a place where I have to take care of them or house them, I would never expect them to pay me.  Is it the best financial decision, no, but in my world it is the right one and it isn't close.  It doesn't mean others are wrong, it just means I understand where you are coming from.

Assuming I am correct, I'd HELOC the home to get yourself cash to purchase. If you are willing to just have a "unit" in your property, I'd look for a multi unit and do what @Tim Herman suggests... as you will end up getting a great start in investing.

This is no different than realtors who don't like investors because of the sheer volume of time they might spend for no deal, but if they stick it out and that investor does volume, the realtor that stuck it out, will greatly benefit.  What I would say is the biggest reason folks are having these issues with GC's is because there are less and less good ones everyday and very few of them NEED investors as much as investors need them.  I love @Neal Mahoney approach... old school and super appreciated.  It is just rare, very rare.  The one thing I would say, is don't be afraid to SELL your contractor.  If you are an investor and planning to do volume, sell that.  I'm not saying it will work, but it can't hurt.  And to everyone saying investors just waste contractors time all the time and it isn't worth it, etc... think about how much time you as an investor have spent analyzing, visiting, inspecting properties that you never bought.  It is the price of doing business.  If contractors need work, they take some of that risk, if they don't, they won't.  

I'm no expert, but are you intentionally not valuing the land?  The LAND is what allows you to collect lot rent.  I think the point that MHP are hard to come buy as more and more places are trying to get rid of them, means the ability to have one that generates good returns is harder and harder to find.  For some, park owned is a pain and they want nothing to do with it, but if you can raise the rents and with only a handful of them, I'd keep them that way until you need to replace them... then switch over OR give the tenants two options . You can buy the trailer for X amount, plus the lot rent per month OR you can just pay X amount for lot rent.  

The private septics is what would worry me the most on this deal.

The bottom line is develop your criteria and stick to them.  If you are comfortable at $100K because it meets your cash flow percentage or amount, offer that.  The time you spend trying for the perfect offer is time wasted not working on your business, evaluating other properties, etc.  The other thing I would say is get creative, say $100K, but offer expires in 2 hours.  It may or may not work, but it also might get them to feel like they need to decide or counter.  If you are willing to pay $100K after negotiating back and forth, you might as well just offer it straight away and be done, either way. 

I find it interesting that so many folks who tout, they are successful because they don't "think and act" like the average American, are shaming the poster for doing the same?  I agree with their point that it will be hardest on the kids and that should be the biggest concern, but like others have mentioned, this isn't a one and done.  If you try it and it doesn't work, you aren't doomed forever, you just find a different house.  The other benefit nobody has mentioned is how great it may be for your kids to connect more often and deeper with their Grandparents.  That benefit alone might be worth it.  In today's world, there is very little appreciation for the older generations and what they have experienced, been through, learned from, etc.  We are all so busy chasing the modeled American Way of living, we never stop to appreciate those who have created many of those opportunities for us. 

As far as what to do with the liquid cash... you have to align that with your strategies and beliefs.  I think there is a happy medium between leverage and equity.  The folks with lots of equity I would imagine always sleep well.. the guys leveraged to the nine's... probably not as often.  Find a balance you can tolerate that gives you the biggest bang for your buck... 

Please keep us updated... I'd love to see how this shakes out.  

Bump... anyone have any "twins" to add?

@CJ Ashton Isn't it funny how you just posted your story and now everyone knows how you should run your business?  I don't think any part of the post asked ANYONE on the forum a question or for advice... it was just sharing a story.

The bottom line is everyone needs to make their business work for them.  There are some who will never treat it like people are involved, but rather just on rules and numbers.  Others will work with people and focus on that relationship over numbers.  The bottom line is you aren't running someone else's business, you are running your own.  You need to make it work for you.  

Like has been mentioned, every market is different.. Losing say $75 per month, to stay under market at your rate of $1325 vs. $1400 is $900 in lost rent... if you were vacant for a month, while replacing the tenant you lose more than that, plus turnover and in my opinion the most important factor, is it seems like they are great tenants.  Each and every day the tenant pool gets worse.  Sure, you can be @Thomas S. and train your tenants(and there is no doubt his operation works well for him), but some folks just aren't good at that, nor have the time for it or want to deal with it.

This business has its differences for everybody... thanks for sharing your story. 

It is different for everyone, but I caution you when hearing from real estate investor, that paying for education is a waste. Most REI, use leverage, so the money they use, costs money... but they justify it because it returns immediately... meaning, yes I have to pay $300 in interest, but I am getting $500 back so I am making money. The money you spend for education is like appreciation... you go in with the HOPE that it brings you money at a future date. It is a guarantee, no, but you have a pretty good idea where it will get you. The reality of the professional/corporate world, is those degrees open doors. Right or wrong, if you don't have the degree, some doors in that world will never be open for you. If that door leads to a gig paying you say, $100,000... you now have $35,000 more earning power... which will eventually open doors for you to qualify for more financing and LASTLY, the thing many people don't talk about... is you don't have to change anything and you can REPEAT that. So your earning power is up $35,000 a year OVER and OVER again.

If I were you and guessing on who you are from the short stint you posted.  I would keep doing all you can to pay off that first rental... get in a self paced, online school that offers flexibility, keep your W-2 and a couple years down the road, you'll have a paid off rental, a 4 year degree, yes- some student loan debt, but a great foundation to move forward.  It isn't always a blast the doors off and get rich quick.... some of the best investors were calculated, started slow and have a foundation that doesn't waver... those are the ones with staying power.  They survive the market because they have options.  GOOD LUCK... your thoughtful thinking on the topic will serve you well going forward.

The bottom line is, it is your business and you get to decide.  For the folks that take many forms, that works for them.  For the folks that require one specific way, that works for them, etc.  You need to run your business how it works for you.  I think the key to the electronic version is folks being comfortable with it.  That may mean you have to help them set it up or whatever, it just depends.  Never be afraid to set it up like you want it set up, just be aware that may not be preferred for your tenants so you will have to "train" them like @Thomas S. indicates or adapt to find your sweet spot.  I think class of tenant has a lot to do with how/what systems are in place.

@Steve Vaughan hit it on the head with the difference between being frugal and being cheap.  Bringing the sandwich in, not only disrespects the restaurant, but makes things uncomfortable for anyone else you are there with.  I am assuming this is against restaurant policy.  I again, "assume" he would not be in favor of someone not on a rental lease living in one of his units because it is against policy... but it is such a great way for said person to save money?  Or being he is a realtor, I wonder how it goes when someone haggles over his commission?

There is nothing wrong with being mindful of the $$ you spend... but being respectful and treating people the right way is by far more important.  To each his/her own, just my take.