Posted by Greg Meade on January 30, 2005 at 06:21:29:
on this site and in FL. a group of us here have a very large bet (pooled) on when he posts he has earned his first million. It will be fairly soon IMHO.
Greg
Looking at a small slummy park - Posted by Briton (IN)
Posted by Briton (IN) on January 29, 2005 at 09:13:48:
I am looking at a 10 pad park. The homes are all 60’s and 70’s park owned homes. They are only 50-60ft long also. The park is situation on .6 acres. So the lots are small and the homes close together. Most of the homes look like they could be replaced in the next few years. The park is in a pretty good area. (the park is the sore spot of the area)
The seller is asking around 100K. The utilities are city. The units rent for about $80/week. So this would cash flow easy for a short time until tenants move out. At witch point many of the homes would get replaced most likly.
I am soul searching on whether to take on another run down park. I turned my first park around in the last 2 years. I was just driving through it this week and realized how much i have done in 2 years. I have also had to learn to find small homes over the last 2 years, so i think i can find some 50ft- 60ft homes to replace the existing rentals.
I am young and actually like turning parks around. But it takes cash to move homes and buy them. Is my money better spent on turn key operations? Or should I take on a project? I think in 5 years i could have 80s and 90s homes in the park and nice skirting, ect. Then it could be another little gold mine.
But the bottom line. Whats going to make me more money based on my time ect. Land home deals? Nice parks? Or get into this park with 10K and turn it around?..hmmmm
All thoughts welcome. Briton (IN)
VEry good advise below - Posted by Eli
Posted by Eli on January 30, 2005 at 17:12:13:
First of all Briton I agree with everyone below. Especially Greg when he says, You should be dishing out the advise and not asking for it.
I think you have created a great system turning around parks and you have done an amazing job at it! From the little bit of info I have in this post I would say pass on this one. Sure there is upside, but is it worth it? Of course in the end that is going to have to be you that decides it, but I think your time could be better spent on “better” parks then this. Not better per se, but that the parks would be better investments for you.
Find a better one, they are out there! I promise they are. I am negotiating with 12 parks right now, if this is the course that you choose to take there are parks out there. Drop me a line if you want some help finding them. or just call me 210-437-2681
Oportunity cost, that is what it is all about. Every person here posting has their favorite way of doing things, the trick is to figure out the BEST way for you and if therre is anyone that can do it it is YOU!
seems to me you should be … - Posted by Greg Meade
Posted by Greg Meade on January 29, 2005 at 20:06:46:
giving advise on MHP purchases instead of asking for it! LOL. Jeez…21 years old , own 2 Parks and thinking of buying a third…I love it! You go boy…if it cash flows and has upside, jump on it! What would a nice 10 space Park sell for fixed up?? What kinds off rents could you expect in a few years?
Good Luck B…post your results!
Greg
Re: Looking at a small slummy park - Posted by Tony Colella
Posted by Tony Colella on January 29, 2005 at 10:02:22:
Briton,
There is an old saying, “Those who will do for 5 years what others will not, can do what others cannot for the rest of their lives.”
Being young and aquiring turn around properties will net you a great deal of equity and cash flow now that will grow into the future, allowing you to do what others cannot.
It will take work and it wont’ always be fun but you are playing to your strengths by using your experience and knowledge to analyze the property, turn it around and obtain the cash flow and equity that will make you quite wealthy.
You have the ability and time (since you have become financially independent of a job due to your park and mobile home investments), to take on projects that others cannot.
Cash is required to replace homes and turn a park around. Doing this stictly out of cash flow is a slow growth process but it is an alternative.
Where do you get the cash?
A land/home deal or two a year for you would likely be all that you would need or want. By creating a “land bank” as we call it, you capture the equity in a land/home deal and pull that cash through a refi or equity line and begin to replace the homes in your park. The seasoning necessary on such a land/home deal will vary by lender but 12 months is not uncommon.
Ok, let’s say you were to buy one land/home deal, fix it up and rent it out. You wait 12 months (or less if your bank will allow) and then refi and pull out a chunk of cash.
Take what you need but be sure that the land/home deal still cash flows a little bit.
Even though you reduced your income from that land/home deal, you turned it into cash that you can now use to replace homes in the new park so as to increase income (greater than what the land/home deal provided) and increase the value (equity) of the park as the new, nicer homes increase park income (income analysis appraisal) and the new homes represent a more desirable park (comparison analysis) as well as attract better tenants after the turn around.
The land bank is a tool to access lump sums of cash, provide an positive income stream, but more importantly it allows you to use that lump sum of cash to increase your income and net worth exponentially.
Tony
Re: Looking at a small slummy park - Posted by karl (TN)
Posted by karl (TN) on January 29, 2005 at 09:29:21:
Did I read it correctly - 10 MH on .6 acres? That’s awful small area to put newer units on even if they are small ones. I can’t figure out how they put 10 old ones on it.
One strategy that may have merit. You say this park is the one blight of the area. The zoning board is likely to rezone it to anything you ask provided it inproves the area and tax base. So figure out what would be very profitable in that location. For example: townhomes, self storage, etc.
Or do nothing and ride the cashflow wave for a while, who knows what progress has in store for that area.
Good luck. and remember. We make money when we buy. We get paid when we sell. So get a good deal!
karl (TN)
Youth - Posted by Sterling
Posted by Sterling on January 30, 2005 at 05:49:24:
Did he say he was 21? I’ve re-read his post and all I find is he said he
was young. Anyone under 50 is young. Anyone under 40 is an infant.
If people twice my age are infants… - Posted by Briton (IN)
Posted by Briton (IN) on January 30, 2005 at 11:00:12:
What does that make me? LOL
Parents can teach their kids to be rich when they turn ten. Most kids in America have the chance to be rich by their twenties.
I just read Rich Dad Poor Dad for the first time. I learned a few things, but the concept is old news to me. Put your money in income producing assets! Not liabilities! I am very thankful I was tought this to say the least.
I think 10 or 12 is and infant when it comes to learning to invest. At least that is when my kids will start. Briton (IN)