All Forum Posts by: John Arendsen

I can't argue with @Dylan Vargas at all. He's spot on. My only concern is your time capabilities. If you have the time to do as he suggests then by all means do so. You'd be very wise to go through that learning curve so you'd have a pretty educated guess when it comes time to actually step away from the hands on in the trench end of the game. 

You can also be building your bench while doing so. As my ole football coach always used to say as long as he keeps his bench deep he'll always be able to compete on the field. When you get multiple projects going it may then behoove you to start stepping away from the daily hands on, however. 

Having read several realistic and interesting answers on this thread I still haven't heard anyone discuss "XACTIMATE". (Copy & paste this into your address bar as BP will delete any comments that link to another business). The mark of a truly good contractor is generally the tools in his tool bag along with his experience and level of sophistication.

Xactimate over the years has more than proven itself as one of the best tools a truly good contractor could have in his tool chest. It's not cheap to become a certified Xactimate contractor either. But when one does take the time to learn it and spend the money to purchase and own it it's one of the most reliable tools both the contractor and the customer could ever ask for. 

It's a software program the most insurance companies not only rely on but insist that any contractor they work with be certified on and use. Its algorithms can hone in on every geographical location in the Country by zip code. Then it factors in that zones net labor and material costs on a unit and line item  cost. 

Once all line items have been entered on the estimate Xactimate will allow for what is called a 10 & 10 mark up; That's 10% on material and 10% on labor. It really doesn't get much more honest or realiable than that. 

Having been licensed in California, Arizona, Oregon and Florida at one time or another over the past 30+ years as a disaster response contractor I can tell you first hand that if you're not an Xactimate certified contractor you might as well pack up your tool chest and go home because the chance that any insurance companies or emergency response providers i.e FEMA will use you. Reason? Xactimate has proven to be one of the most fair and realistic tools used in today's competitive construction industry.

Pay them as CONTRACTOS! Not your "hired at the Home Depot" guys holding their hands up hoping you'll pick them up. Come on @Account Closed you either want to hire a CONTRACTOR or a HANDYMAN! If you're going to enter this arena enter as a PRO. Not an amateur not quite knowing what to do.

That approach is fine if you want to be your own GC & PM, however, as @Mike Reynolds, so aptly stated if you want to micro manage your job and have noting else better to do with your time go for it. But having been a GC & MH contractor, dealer, developer and RE broker for the past 3 decades I can tell you first hand that I avoid customers like you like the plague. Too many interruptions, inane questions, changing mind, etc. 

Add to that the insurance and liability issues should there be an accident or problem that was not caused by something that I did directly but, moreover, by something that you may have caused by constantly being too hands on. 

Case in point. You purchase all the lumber and have it delivered to the job site and while unloading it there's an accident or damage done wile offing the load. Guess who get's drawn into the lawsuit? MOI! Why, you ask? Because I'm the one who's got the insurance co's deep pockets. 

Hungry and greedy attorneys will just start throwing around lawsuits like there's no tomorrow and they target the pour souls with the deepest pockets. Once served the burden of proof is on the contractors shoulders and it ain't cheap even if you do get released from the complaint. I know this for a fact because I've been down that road.

It's like my Granpa always used to say. "Run your job. Don't let your job run you. In today's economy there's just too many other fish to fry. Why on Earth would I ever want to subject my self to 3rd party contracting. Especially from someone who's not a contractor and may not even know anything about construction.

Hate to be so direct but that's coming from an experienced contractor who's been there and done that a time or two. But good luck.

@Charlie Chung, Curious to know how many ADU purveyors/builders/contractors there are in and around Austin. I'm thinking about expanding into that area myself. Do you think there is adequate demand for them?

Get a local appraisal. Depending on if it's in a rent/lease MHC or a resident owned will determine value. If it's on resident owned land make sure your appraiser uses other MH's on resident owned land and not in a rent/lease community even if it's closer. You will surely take a major hit on value.

"Should I pay a premium for location, for potential sale of land to a developer in the future?"  It's not unusual for investors to pay up front for value added "potential profit centers" It's only a decision you can make as the investor/buyer. What I always tell myself is, go with your gut. Instinct is often your best balance beam in making these types of decisions. 

The other thing is the overall price point and how it impacts your investment capital that could be used for other investments. If you've got an extra 50k to throw into the deal and it won't prohibit you from making a move on another investment or take away from your ability to continue living within your comfort zone why not put it to work for you? An 8 cap is better than what the bank will pay you to keep it in their coffers. 

We've been investing in MH's in Cali for 3 decades and own several rentals. You have to be very careful. Always be sure to get a copy of the HOA CC&R's before pulling the trigger. Many if not most "Resident Owned" MHC's have some pretty stringent rules about subletting.

Most want a new owner to live in the home for a minimum of one year before they can rent it. Others will only allow you to rent out your home on one year minimums. Absolutely no vacation, VRBO, Air B&B or short term rentals. You might find some that will allow a 30 day minimum at best.

Resident owned MHC"s are very much aware of investors wanting to purchase MH's because of their attractive price points. But they don't want a lot of transient activity in their communities. All that stated, there are some that don't have those restrictions but you really have to dig around to find them.

It's definitely a sellers market in SD right now almost everywhere in the county. I just looked at a property in Oceanside on North Tremont. It's in a rather new (10 years old +-) and gentrifying area where the average price point is in the 800k to 1m & up range. So when I saw a new listing hit the street for 690-729k I got a cold shiver running up my spine and couldn't wait to beat a path to the property and check it out. 

It was built in the '90's and had been rode hard and put away wet. Probably (and I say this as a general contractor) needed at least 100k in deferred maintenance. However, the average unwary buyer wouldn't have noticed a lot of the things I spotted almost immediately. 

The RE agent was as good a strategist I've seen in the game as they get. He scheduled all the appointments in a 15 minute cluster so lookie lous were stepping on each others heels to preview the property.

I informed the agent that we were cash buyers and would be willing to make a full price offer and close in 17 days with the proviso that the offer would be withdrawn in 24 hours. We are leaving early Saturday morning and will be out of the country and did not want to get caught up in any bidding wars.

He, unlike a lot of RE professionals came right out and said that they would be accepting all offers until Sunday evening at 6pm. They would then evaluate all offers and go back out for final offers. That's tantamount to an auction without being an official auction. 

Needless to say we were not the least bit interested. Especially in view of the fact that there would be the deferred maintenance issue looming within a short period of time. Bottom line? This is the first sign that you as a buyer should be cooling your jets for awhile and sitting on the sidelines. 

It's only been a decade since our last RE correction. Or should I say total collapse. It took 5-6 years for us to start inching our way back from that debacle. Will we ever learn our lesson. I'm not liking what I'm seeing in the RE market right now and I've been an investor for decades. I can see the writing on the wall and it's not saying buy, buy, buy.

That's not to say there aren't other creative ways to invest in RE because they surely are and @Lee Ripma hit on it. It's a perfect time for folks to look at RE investing from a completely different perspective. At least for awhile until this buying hysteria starts cooling its jets a bit. 

That's my 3 cents/sense worth adjusted for inflation.

Nothing wrong with that at all. I actually have a few myself along with site built homes and they pencil just as well. The only proviso is if it's in a rent/lease MHC then you may want to consult with the owner/manager before you pull the trigger.