All Forum Posts by: Rico Nasol

 Thank you @andrew super helpful. What size parks do you go after?

@John Teachout good question. Haven't looked into due diligence yet, but have these general questions before I go deeper. Want to know how to go about analyzing the deal.

Thanks @Alina Trigub. I know some folks have mentioned that they pay $10/unit for medium to large size parks. I've been looking at secondary markets and hoping we can have a tenant do on-site mgmt. Do you know how to properly estimate taxes on a MHP?
 

We are investors that are looking to transition into Mobile Home Parks. Wanted to get some information on how we should plan to pay for property management and if anyone knows any good ones in Indiana. We are looking at 31 lot park that is currently at 65% occupancy. The pads are currently going for ~$185 each, but the market is more in the $225-$240 range. Can someone help explain how management should work for a park like this? I know some people have on-site mgmt and some people use property mgmt. Would like to better understand how we should be projecting costs and what would be realistic for a park like this. Thank you.

Who do you use?

So we have a rental property in MO. We're paying cash for it and then going to rehab. All in, we're spending ~$70k with an ARV of $100-110k. The rebuild insurance is $84/month at $170k. The ACV insurance is $56/month for $100k. Both have a $1500 deductible. Which policy should we go with? The house was built in the 50's and the plumbing was upgraded at some point to copper and most of the major items were replaced at some point and time to meet more modern standards. The roof may have 5-10 years left on it.

The $30/month does eat into our monthly cashflow, but want to get the pros and cons of both. I've read that some folks go ACV at 70% of the rebuild cost. Some only do the rebuild policy. My thoughts are, we're in it for $70k. If something happens,we get our investment back and then some and we can always sell the land. That could be totally wrong, so looking for some advice. Thanks!

I don't know if this answer is going to provide a lot of value you to you, but one thing that is super important is for an investor to be super clear around what expectations are and what they are looking for. As out of state investors, my partner and I have extra costs that local investors don't always have to account for (IE: local can self-managing, access a local handyman, leverage existing relationships, etc.). If it's out-of-state investors you are targeting, really get to understand their numbers and tolerance for risk. It may not be in-line with what your expectations are. At that point, you can decide to work together or that it might not benefit either of you to continue. At least by being up front from the beginning, you can all save time.

As for us, we use the typical formula of 75% ARV minus rehab costs. Take into consideration we have project mgmt fees that we have to pay for as well so we make sure the rehabs go to plan. We look for at least a 12% CoC ROI and positive cashflow. We add in insurance, property management, CapEx, maintenance/repairs, vacancy and any other potential expenses based on the property (refuse, water, etc. fo MF and lawn care/pest control for SFR). I can get more specific, but that's between me and our realtor. This type of relationship building can be difficult and take time, but if you're building a team, to us it is worth it.

As for profiling your properties, are you asking about how you can show the deals you've done? That's not as important to us. We need to get on the phone and get a feel for someone. We spoke to 5-6 agents before landing on the one we're working with now. She aligned with what our goals are when other agents were trying to convince us to buy in other parts of town and for price point well beyond where we wanted to be. Those are great examples of agents not "hearing" their client. There's no team there. Felt like the agents wanted to up-sell us without much upside. The numbers were actually worse. Those conversations and relationships didn't last that long after. Maybe you can chalk it up to us not being 20 years in the game, but if we feel like you aren't "hearing us" we stop talking.

Hope you find this helpful. Didn't mean to rant, but wanted to give my 2 cents.

We try to avoid sec 8 if possible, but it sounds like that's the type of area this would be in. We've avoided it in the Kansas City and Las Vegas area.

My business partner and I are looking at a potential mutli-family commercial property in the West End/Westgate area of Montgomery. It is off of Mobile Hwy across from Trentholm State Community College. Any thoughts on the area? We are out-of-state investors and we are closing some duplexes in the Capitol Heights area.

We are looking to purchase at ~13% CapRate with lots of room for adding value. We want to be sure the area could support renters and is in a decent neighborhood. We don't know the area that well just yet. We've been researching, but we also wanted to leverage the crowd knowledge of BP.

My partner and I have been finding success in Raytown and Olathe if you're looking for >B neighborhoods. There are even some good deals in Grandview. We've just been finding deals via MLS and auctions. Another way we've been finding off market deals are by calling listing agents and they typically have other properties that they haven't listed yet. PM me for more details.