All Forum Posts by: Adam Philpot

Evening BP’ers, I want to start going to the local courthouse to find potential foreclosed properties. I understand the need to look at Liens, 1st vs 2nd mortgages, taxes, etc... but I want to make sure I know the ins and outs of this process before making a bid. I was thinking of offering a real estate attorney $$$ for their time to teach me due diligence process/everything to be aware of before bidding. Does anyone have any other advice on how to go about learning the courthouse auction process?

This is what I have a hard Time understanding and I’m knew so please help me be realistic. It’s seems reasonable to factor in 40% expenses (10% maintenance/ repairs, 10% capex, 10% vancancy, 10% property manager). After I discount mortgage it should give me a healthy cash flow. Is 40% not realistic? I’ll review financials from the current owner but assuming the tenants pay water/electricity shouldn’t I be able to use the math above? Thanks everyone!

Thanks Sam and Bjorne. What kind of expense percentage of gross would you expect on multi family. It’s seemed reasonable to calculate a 60% Margin based on this 10% expenses 10% property manager 10% cap ex 10% vacancies Please let me know what I may me missing. Thanks

Evening BP’ers, I’m running the numbers on a potential 12 unit (3 buildings) 2bd/1ba in Huntsville for 510k. I’m pretty new so would like to make sure I get the numbers right. I want to roughly factor in a 60% margin after factoring in expenses so even if expenses are under I’ll pull out the additional for any potential cap ex down the road. They said they’d provide a full year rent roll and financials breakdown after contract is accepted but the gave me June. What do you think of these numbers? Month of June Income - $6,018 Expenses -$695 Prop management - $602 Balance -$4,722

Evening BP’ers, I have a property I 100% own. Instead of selling for a lump sum I’d like to sell and become the bank. I’d like to finance the property to someone who maybe can’t qualify for a conventional loan and secure a loan for them at slightly above or at the market interest rate. Does anyone know how to go about doing this from a legal/underwriting perspective? Who would I need to involve to make this happen? Real estate attorney? Any companies that exist to help people through the process already? Any books you can recommend? Thanks in advance! Like Warren Buffet said “compound interest may be the greatest invention of our time”.

Evening BP’ers, I’m currently trying to put a fair offer together on a MHP outside Huntsville and hoping those that are in this space can help validate my numbers. Any feedback is much appreciated because I keep losing deals. I’m not sure if my numbers are too tight or everyone else is overspending. Here it goes: 1.) i valued the business at 3x EBITDA (gross revenue - expenses) using their last year tax return. I thought this was reasonable because it hasn’t been ran well and any small business I buy I will give a 3-5x multi on EBITDA. It’s 33 pads but based on the numbers I saw it looked like they’re only collecting on 26 so there is upside if I come in and run it right. The cash flow would be better at full occupancy, but My thought is why should I pay them today for what I have to achieve tomorrow. Value of the business: $103,000 2.) value of assets - I generously priced the land 50k above last years appraisal value. The area is hot right now so I ran it against comparable land for sale in the area. It got me to 10k/acre for 18 acres -$180,000 Infrastructure- roads, water and electrical (MHP established 2006). Last years improved value of the land at appraisal was 50k so I used that number Asset value: $230,000 Overall offer price: $330,000 Please let me know what you think of my numbers. I hate to lose this park because there are nice subdivisions being built only a few miles away.

Not planning to build anything yet but trying to determine the true value of the land if a lot of infrastructure is there for fire build of stick homes. Electrical and water are in place and each unit has its own septic tank

Evening BP Family, Will the infrastructure from a mobile home park (water and electrical) typically be the same quality if I want to convert the park to a single family neighborhood and built?

Thanks! My big concern is they have another park that funnels into the same bank account. I’m not sure how I’ll distinguish between the rent for the park I’m buying vs the one I’m not. You guys are extremely helpful! Thank you for all your advice

Thanks, Rachel. Part of the reason I want the rent roll is being able to see how often rent is getting paid really late but I definitely want the tax returns too. Appreciate all your advice. You commented on my other thread too.