All Forum Posts by: Tom Valichka

@Sam Bagwell Awesome sam thanks for reaching out!! There was another gentleman who messaged me about a REIA meet up in Cumming that was free every Month. I am going to attend. I'd love to meet up! I'll message you

@Jacob Wathen @Sergiu Ionita  THank you both for the input! Definitely going to have a real estate attorney check it out. I was able to review it today and it was very simple and straight forward.  

Jacob, the way i found mine was just riding around, finding the RV parks, and calling the owners asking if they wanted to sell. It just so happens gentlemans mother just passed and he wanted out.

Sergiu, I am buying it to far from Atlanta so I am using an attorney we use for closing in north GA, thanks for the lead though if i ever am in ATL.

BP,

I have written in my last post about the RV park i was considering. I was able to pull all the strings together, dot all the I's and cross the T's. Bottom line, we are getting ready to finalize the deal and do the earnest deposits.  This is an OWNER FINANCED deal. No banks, no official Board of Realtor agreement.  I have not seen the agreement the owner is working on but he said it was a standard real estate purchase agreement (I am waiting on him to send it to me to review). I have already toured the property twice, and had a new survey done and the property lines flagged.

Has anyone ever done a owner financed deal and what should I look for. What should i make sure is in the agreement?

Any input is appreciated since this is my first owner financed deal.

Thanks,
Tom

Hey BP,

Anyone living in the Gainesville GA area and looking to meet up please reach out! I have not been able to find any meet ups or anything in this area, (maybe im looking in the wrong spots).  I just moved here from Hiawassee (way north ga).  Looking to meet people here and get more into meet ups and connections. If there is an interest here and there are not any meet ups, i am willing to get the meet ups going. 

I have a rental in the canton area (north of atlanta) and i am working a RV park in hiawassee area that is 35 units. looking to close in February 2018.

Thanks,

Tom

@Jody Schnurrenberger

thanks Jody! Since the post i have met with the owner and have talked to him about completely going around this manager since i plan to manage it myself.  The owner thinks that the tenant (manager) will flee the scene anyways when he finds out he is selling because A). he has a racket going and B) he is keeping all the money and providing no real value.  We always want him gone because he is the ring leader on allowing "trash" in the park and letting other users have more than 1 RV site for the cost of 1.

The owner is on my side since i plan to keep it nice and he is just trying to get rid of it help pay some bills.  We have decided to move ahead at this time. I have him checking on my funds and he is calling the "manager" tenant to let him know what is going on.

i'll keep everyone posted!

Thanks

i'll try to keep this brief. I am currently looking at larger deals that are "unsexy" to the average investor and owner financed due to being maxed out on conventional borrowing at the moment.

I ran across an RV park that has been listed with an agent for over a year with no action. It is right on a main intersection with good road frontage close to town (could be a commercial buyout play down the road).  It needs some work.  It is part of death sale and the owner is looking to liquidate. i called him, he owns it free and clear and is willing to work around the agent. Here are the numbers...

current units: 14 (35 total available units)

rent income/month/unit: $325

barber shop on property rent/month: $300

total monthly income: $4,850

Here is the catch. The owner has been charging a TENANT $800 to manage the whole RV park and charging the barber shop $300. He let's the TENANT KEEP THE REST OF THE PROFITS!!! WTF. So the OWNER is only bringing in $1,100/ month. He said himself he wants out, realizes the park is underperforming, and is OK with this setup right now. There is also no books on this business. His family has owned the park for 30+ years.

I am concerned without talking to this TENANT that this could go south quickly if step in.  If i am this tenant i would not want to give up the cake walk he is. I'd have to do something to satisfy this person, or ask him to step out of his role.

My offer to this man was 10% down ($29,500), 5% interest only/month for 5 years ($1,120/monthly payment) then full cash out after 5 years (i'll be able to get financing by then). He is asking $295,000 - the land is worth $220,000 and the barber shop building may be worth $25,000 and infrastructure somewhere in the $30,000 - $40,000 range for septics, electrical, office building, so forth. Totaling - $285,000 or so.

Expenses - $1,120/month interest payment

management company (10% TBD) - $485

internet - $120

insurance - $250

water - $500

septic - $0 (included)

dumpster - $75

property taxes - $400

total expenses - $2,950

Current income with current units: $4,850

Current expenses (am i missing something???) - $2,950

Estimated current cashflow - $1,900/ month

At this rate i would have my initial investment back in 16 months if I make no other improvements. I am budgeting around $5,000 in deferred maintenance costs which would put me back to 19 months to return my initial investment.

ANY thoughts on how i should approach this situation?? The seller said he would get back to me next week. everything is contingent upon the tenant coming to an agreement with me on the management process. Please advise.

@Samantha Klein @Gail K. @Carl Pickens all great advise guys thank you!

@Thomas S.

Yes, i guess that is my biggest issue. i don't want this to become a monthly thing, crying wolf protecting their deposit and costing me $. Yes i will inform them that can't continue. 

I agree with you there. i'd just have them pay the bill.  Again, this is the first incident in 6 months so i think everything will continue on in good fashion. 

@Irina Belkofer @Dustin Lavender @Levi Ballard @Rachel H.

Thanks guys, all great advice. Rather than adding wording the lease to discourage calls, I will lay out better guidelines as in what to do in certain situations.   I still have not had a chance to get there to see everything for myself. I am hoping to this weekend. I am sure something silly happened and they didn't want me to know. 

I still question, that if I am paying for their "accidents" that i should not have to pay for due to their disregard, can that come out a security deposit? (sorry if this is a dumb question, first time landlord here)  I can see if the pipe burst and it was my fault, id pay for that no questions. This isn't quite the same.

@Bryan O.  good points Bryan. I like having the bucket there just in case.

You have a great website as well.