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All Forum Posts by: Rick D.

Rick D. has started 16 posts and replied 24 times.

Post: How Exactly Does a FHA 203k Loan

Rick D.Posted
  • Professional
  • Akron, OH
  • Posts 26
  • Votes 3

Can anyone point me to a narrative that explains exactly how a FHA 203k loan works? Is the process flowcharted out anywhere? How much repair can be financed? Do you make IO payments during construction? etc.

Thanks in advance,

- Rick

Post: Purchase & Ownership of an Outer Banks Beach House

Rick D.Posted
  • Professional
  • Akron, OH
  • Posts 26
  • Votes 3

I'm entertaining the idea of purchasing an OBX (outer banks) beach house as an investment, so I'd like to have a discussion with someone who is currently owns one.  I need a "look behind the curtain".

  • What is the true cost of ownership?
  • What will my NOI actually be?
  • Who is willing to share with me their I/E reports
  • How does rent fluctuate throughout the calendar year?

Are there any current owners out there who are willing to share some info?  I am unfamiliar with this type of investing and need a little coaching on how to model this potential investment.

Thanks,

- Rick

Post: Due Diligence Checklist / Form for Small Apt Bldg

Rick D.Posted
  • Professional
  • Akron, OH
  • Posts 26
  • Votes 3
I’m considering the purchase of a nearby 6-unit apartment building. Does anyone out there in BP land have a due diligence form or checklist they’d care to share? Or, can you point me towards a good one in file place?

Post: What is this mobile home park worth?

Rick D.Posted
  • Professional
  • Akron, OH
  • Posts 26
  • Votes 3

I need help from some experienced mobile home park investors. This is not a product type with which I am familiar, so I’m looking for advice on how to value a current opportunity.

Let’s start the discussion by first considering a “single-tenant net lease” example … a free-standing CVS/Walgreen’s at a busy intersection. This being a product type with which I am very familiar. I realize this is a completely different type of investment from a mobile home park, but please just play along.

If I own the pharmacy, I have:

  1. Rent - a premium, high-rent payer,
  2. Credit – tenant has great credit,
  3. Building - vertical improvements in the form of the building,
  4. Site Improvements - in the form of a parking lot, curbing, storm controls, etc,
  5. Zoning – I own real estate zoned for a broad variety of commercial uses, and
  6. Real Estate - I have a great piece of underlying ground on the hard corner of a signalized intersection with the highest traffic counts in the area.

There is a market for this type of product. These things change hands all the time, so I always know the value. Even if the doomsday scenario hits in my pharmacy example, and CVS/Walgreen's goes out of business and a tornado destroys the building, I lose #’s 1, 2, and 3 above. I still have #’s 4, 5, and 6. As doomsday scenarios go, this isn’t terrible.

Now switch to my mobile home park and consider the same factors.

  1. Rent - low rent payers ($200 per lot for 15 lots),
  2. Credit – my residents probably have mediocre credit at best,
  3. Building – I own nothing here, as the residents own their mobile homes.
  4. Site Improvements – I own nothing here, as there really are no site improvements to speak of,
  5. Zoning – zoned for the park
  6. Real Estate - an otherwise poorly located piece of ground jammed up against an airport.

The seller/owner created the park 15 years ago and claims to have never had a vacancy, so if my doomsday scenario hits and all the trailers are wiped out by a tornado, I’m left with a poorly positioned piece of ground which I suppose I would eventually repopulate with mobile homes.

So why consider this at all? I’m interested in collecting “ground rent” with little to no tenant complaints ever … no trouble calls about leaky roofs or plugged up toilets or air conditioners that go out on the hottest day of the year.

If the only real value here is that of the rental cash flow, what’s this thing worth?

Thanks in advance.

Post: how EXACTLY does a Solo 401k differ from a self-directed IRA?

Rick D.Posted
  • Professional
  • Akron, OH
  • Posts 26
  • Votes 3
Does anyone know where I can find a definitive guide on self-directed IRAs vs Solo 401ks. I mean something that goes beyond the superficial and tells me step-by-step EXACTLY what they are and EXACTLY how they differ and EXACTLY what they typically cost to setup and administer? I've listened to a dozen podcasts on this topic and no one ever goes into a satisfactory level of detail.

Post: Passive Activity Losses and their Carryover

Rick D.Posted
  • Professional
  • Akron, OH
  • Posts 26
  • Votes 3

Please define "Passive Activity Losses" and their carryover for the purposes of calculating depreciation recapture.

Thanks,

- Rick

Post: Tax Savings from Rental Properties

Rick D.Posted
  • Professional
  • Akron, OH
  • Posts 26
  • Votes 3

I realize a real estate investor “makes money” in four basic ways.

  • Cash Flow,
  • Appreciation,
  • Principal Reduction, and
  • Tax Savings.

In order to properly estimate my returns I need to assign a dollar value to each of these. The first three are easy to calculate after having made a few basic assumptions, but I need help on #4.

While I understand every individual’s tax situation is different and complicated, there must be a way to make some basic assumptions and estimate this as well. If I ignore 1031 exchanges, ignore deductible property improvements, etc, and assume the following parameters:

Purchase Price:                  $100,000

Property Type:                   Residential (so, 27.5 years of depreciation)

Annual Depreciation:        $3,636

Marginal Tax Bracket:       28%

Est. of Taxes Saved:          $1,018   (= 28% of $3,636)

Is this a reasonable way to estimate money "not paid in taxes" in order to put a dollar amount on #4?

Thanks in advance,

- Rick

Post: What is a "Body Foot"

Rick D.Posted
  • Professional
  • Akron, OH
  • Posts 26
  • Votes 3

I'm taking a look at mobile home investing, and I came across an unfamiliar term.  What is a body foot?

Post: Renovation of an Apartment Complex

Rick D.Posted
  • Professional
  • Akron, OH
  • Posts 26
  • Votes 3

There are over 50 buildings & over 1200 units.  They are of varying square footages and the original developer used over 20 floor plans.

Post: Renovation of an Apartment Complex

Rick D.Posted
  • Professional
  • Akron, OH
  • Posts 26
  • Votes 3

I am considering buying & renovating a large apartment complex.  I'd be very grateful to connect with anyone who has done this before and/or for any cost templates (with soft cost and hard cost breakdowns) that may help provide me with a roadmap as to how to approx a project of this size.

Sincerely,

- Rick