Hello John, In short you want to value the business based on the EBITDA, or earnings before interest, taxes, deprecation and amortization.

This means they want to see that you’re invested in the project by contributing your own funds, which reduces their risk.

If the tenant is paying the HOA fee, you may have to reduce the rent rate to make it make sense. 

You can leverage your money to purchase more property, you'll increase your return, you'll earn more, and you get tax benefits.Read a few books on real estate investing to learn the power of leverage.

It reduces risk by having them know the laws which are extensive (down to needing a compliant monthly statement) etc.The other component is no chance I could do it for that price either.

I had a beer with my brother recently and after I laid out my path forward with all the numbers involved, he said “you can’t afford to stay” … pension won’t be worth enough to justify staying in a job that has a pretty hard cap on earnings for a pension that won’t be worth enough to make a difference in my life, let alone the lives of my children.

If you can handle it, you should be able to get five or more fourplexes by the time you are 30 and earning enough cash flow that you will have the financial resources to enjoy life.

With no points, closing costs are reduced.

But per lot it will cost roughly the following:$1,500 Electrical poles, meter installation $2,000 water taps and connections$5,000 grading and land prep$8,000 septic installation (assuming a 1:1 ratio of homes to 1000 gallon septics)$5,000 down payment on each home ($700-750 / thereafter per unit)$21,500 total set up x 17 = $365,000Ongoing expenses after development would look something this for POH model: $12,750 a month in mobile home mortgages (17 x 750 for PITI on each unit) $1,900 a month in land mortgage PITI (house) $3,000 a month landscaping$2,000 a month in reserve emergency fund$2,200 management$21,850 a month total expenses $262,200‬/yearOngoing incomes after development would look something this for POH model:$27,000/month ($1500 x 18 {17 mobile homes plus house})$324,000/year324k-262,2k = 61,800 net pre-tax profit or $5,150/month.Opportunities to reduce start up expenses: Bulk deals with the government or contractors for doing all the work at once (electrical, water, land grading, septic) Trade free rent for someone to mow and landscape (turning a $3k event into a $650 event every month).

This could be normal for our market, but it makes me wonder if our agent is especially drawn to these prospective buyers because they’d earn him a bigger commission.