All Forum Posts by: Sonia Spangenberg

Use the BP rental calculator when looking at MF opportunities.  You can add rental income for each of the units.  

P.S.  The med students I knew didn't even have time to make their own lunches, they often stole nurses lunches out of the fridge.  ; - )

Tyler, the market is  a little different in Roanoke.  It doesn't rise and fall as significantly as a lot of other markets.  Natural appreciation is at a slower rate.   Time on market is a little longer as well.  In order to find a deal you have to find something significantly deteriorated, which as Mindy suggests is not a good idea for a med student.   The MF is the best option for you but then there is still a need for spending time property managing which is not always convenient.  Good deals are getting harder and harder to find right now as market cycle is peaking.  That puts you at risk when time comes to sell.  No one can totally predict that but there is the potential.  You may even keep the MF after med school as an income property.  Then hire a property manager when you move away.  When you move out and gain another rental income it will look even better.  I recommend buying the MF, find one where you see the possibility of improving the management.   Right now, Instead of learning to rehab, learn to be a property manager.  Invest for cash flow instead of appreciation.  You can always rehab later.  Let the tenants pay the mortgage and avoid the need to do much so much rehabbing.  Forcing the appreciation in a MF involves improving operating costs and rental incomes which can be done with less tax on your time.   Read some blog posts on ways to do that.  As a nurse who has worked with med students for years, that would be my advice.   

A fascinating discussion and I enjoyed reading through the entire thing so far. Saved some links to great trend indicator websites. There are clearly so many factors/perspectives to REI. This was very educational for any investor working at any level. Thanks BP for providing this format.

https://vip.vantageproduction2.com/HtmlTemplate/50...

This was the original link I followed to find edX

https://www.youtube.com/watch?v=rYwTA5RA9eU

https://www.edx.org/

I just discovered a great resource for learning. Because my career background is in nursing and because I love learning, and need more education in business, finance, accounting to support my REI pursuits, I was exploring cheap options. Budgets are tight when you are starting a new business. I am sharing the link for "edX" for others to explore what's out there. I am blown away by the variety of options. first link is a TED Talk by a developer of MOOC, (watch video and you'll figure it out) and second link is to edX website with free courses. If you decide you want certificates for your course then you pay. This is great if you just need functional learning and don't have the need for degrees. Have fun researching this.

The plan is a basic concept, find poorly managed and neglected property, rehab it to force appreciation and increase cash flow.  The trick is in the numbers.  The cost of acquisition, deeply itemized to make sure you have a real number, acurate analysis of market lot rent potential , and cost of engineering srudies then install or rehab of wells and septic install, cost of new or upgraded electical hook ups,  roads, then the multiple meetings with county zoning and water departments before you even start the rehab. The approvals have to go back and forth between multiple departments.  Time frames will be dictated by the coordination with those departments.  Finacing for MHP is trickier as well.  You have to juggle development costs and carry all that until you can get the park filled.  It may take a little longer than you expect.  One of my next steps is to run a teaser Craigslist ads to determine how quickly and how much response you get.  I read that tip somewhere. It's a lot of work, it's not easy.  But it can be so worth it. I do suggest using the BP rental calculator as you would for a MF to help you make sure things make sense financially.  It helps you make sure you are not missing things.  I am also planning on buying a workbook for MHP due diligence from a website called mobilehomeparkuniversity.  They have a boot camp as well.  They have great forums and webinars you can tap into.  

I know because I have started the process on a "very similar scenario" myself.  My plans is almost exactly as you have described.  I am taking my time to make sure I'm not missing something and the deeper I get into it the more I am learning.  It's scary but I'm gonna keep at it!  Just be prepared for the work, it will be more than you initially anticipate.

Kenneth, sounds like you're still early in the process so don't let the naysayers scare you off of further due diligence. You've been given good lists of the red flags so dig deeper in those areas.  Sounds like you already have that figured out.  

Because there aren't many other small MF comps in the area the seller's financial records will be even more critical. Hope the cash payments will be verifiable, (checking account records and quality of bookkeeping). Don't be afraid to re-adjust the offer price if the seller can't verify the income to suit the HML. Don't be afraid to walk away if the due diligence reveals major flaws in the story, but also don't hesitate to make a lower offer price to make the (actual ARV) numbers work before you do walk away, if that's the case. I love the BP rental calculator for figuring out the price that does make a deal work. I love how Brandon teaches how to work backwards from the asking price to get to an offer price that works, using the calculator. Watch his webinar. Even if you do end up having to walk away if the numbers don't pan out, it's not a failure. It's actually a success because you didn't buy a bad deal! The biggest thing that will help you achieve long term success is the ability to walk away based on the numbers, not how many properties you acquire. The most important process in REI is the due diligence, so do it as an exercise even if the deal looks iffy. It's not time loss but a learning/practice activity. The more you do it the more efficient you become at it.

Are you actively involved in a local REIA? If so, getting additional feedback from someone who is a vetted investor and knows the area, (once you have your contract with an inspection clause) it will help you make sure you are asking all the right questions.

Wishing you success.  

David Song and Virginia F, great job connecting.  This sounds like a great mentor/mentee partnership forming.  Love hearing about this.  All the best to you both.  

This has been a very entertaining read today!

Rori Stumpf, I have signed up in the past for webinars I have been  unable to attend and do get an email with the recording later.  Give that a try.  Don't know if it always happens but I have been able to view a couple that way.