All Forum Posts by: Andy Bauman

Investment Info:

Other other investment.

Purchase price: $2,904
Cash invested: $3,075
Sale price: $13,014

This was a deal where I picked up a vacant lot from direct marketing. I found a buyer before I closed on the deal, I did a self-close on this lot. I did seller financing with this lot with a $1,500 down payment and $216 a month for 5 years. I will be paid back after 10 months and, if the loan goes to full term, will realize about a 74% annual return. Not large dollars, but my goal is to get about 100 of these deals to create more passive income.

What made you interested in investing in this type of deal?

I currently specialize in flipping and creating cash flow with seller financing of vacant land as well and value add mobile home park investing. This fell in my strategy.

How did you find this deal and how did you negotiate it?

I found this deal with direct marketing and negotiated with the seller.

How did you finance this deal?

Cash

How did you add value to the deal?

I found a buyer that wanted the property that could not afford it right now. So I added value through financing to make it possible for them to own it over the next few years.

What was the outcome?

Sold via seller financing.

Lessons learned? Challenges?

I learned not to give-up. I had to follow-up with the seller quite a bit to get the deal down and negotiate with the HOA for back-due fees. I also thought I lost the sale because the buyer didn't see my name on the deed because I hadn't closed yet. I was able to get their down payment and reassure them that the lot was in the process of closing and they didn't have to make their first payment until they could verify that the land was in my name.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Nope

Investment Info:

Other other investment.

Purchase price: $2,904
Cash invested: $3,075
Sale price: $13,014

This was a deal where I picked up a vacant lot from direct marketing. I found a buyer before I closed on the deal, I did a self-close on this lot. I did seller financing with this lot with a $1,500 down payment and $216 a month for 5 years. I will be paid back after 10 months and, if the loan goes to full term, will realize about a 74% annual return. Not large dollars, but my goal is to get about 100 of these deals to create more passive income.

What made you interested in investing in this type of deal?

I currently specialize in flipping and creating cash flow with seller financing of vacant land as well and value add mobile home park investing. This fell in my strategy.

How did you find this deal and how did you negotiate it?

I found this deal with direct marketing and negotiated with the seller.

How did you finance this deal?

Cash

How did you add value to the deal?

I found a buyer that wanted the property that could not afford it right now. So I added value through financing to make it possible for them to own it over the next few years.

What was the outcome?

Sold via seller financing.

Lessons learned? Challenges?

I learned not to give-up. I had to follow-up with the seller quite a bit to get the deal down and negotiate with the HOA for back-due fees. I also thought I lost the sale because the buyer didn't see my name on the deed because I hadn't closed yet. I was able to get their down payment and reassure them that the lot was in the process of closing and they didn't have to make their first payment until they could verify that the land was in my name.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Nope

Investment Info:

Other wholesale investment.

Purchase price: $1,764
Cash invested: $1
Sale price: $2,550

This was a vacant lot that I picked up via a mailing and sold quickly. Easy wholesale via contract assignment, but the process took quite a bit of time because there were some title issues (liens) that had to be cleared by the title company. Proceeds will pay for my next mailing!

What made you interested in investing in this type of deal?

I currently specialize in flipping and creating cash flow with seller financing of vacant land as well and value add mobile home park investing. This fell in my strategy.

How did you find this deal and how did you negotiate it?

I found this deal with direct marketing and negotiated with the seller.

How did you finance this deal?

Cash

How did you add value to the deal?

I wholesaled the property to an end buyer for a good deal.

What was the outcome?

I made an easy, small, assignment fee.

Lessons learned? Challenges?

For this one I was glad I used a title company as it took a lot of follow-up to get liens on the property released from the prior vendor, but the title company was great!

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Only the title company. I found the buyer and seller on my own.

Most banks are going to require at least 20% down, especially if you don't have a track record and/or relationship with them.  I would suggest you keep looking at more banks, maybe you'll get lucky!  If not, you may have to take outside money (friends, family, etc...) if the deal is good enough.

From what I've been learning, your best bet for a park of that size is to find an onsite manager.  Many times one can be found amongst the current tenants that have pride of ownership. They would get free lot rent and a few bucks per occupied lot, per month and some other source of income like retirement, pension, etc...  They will most likely need some training on how you want them to run the place, your policies, quit and pay, etc...  But you definitely want somebody in the park.  Are the rents currently under market?  PM me, I'd be happy to chat some more.

Here are a few thoughts:

* Have you contacted the county to see if they are willing to work with you on past due fees and liens?  Sometimes you may be able to let them know the situation, either you buy it and fix it up, or it stays a blight on the city for many more years.  That could help you on the acquisition price.

*  I'm not sure how to motivate the seller.  Maybe tell her that the amount she will get paid will decrease each month until she has the right to sell the property?  But if she cannot control the right to sell the property, that will most likely not work.  I'm really not sure what options the seller has to push anything through faster.

I'm interested to see how this works out for you, I'll keep my fingers crossed for you.

No.  There really isn't much to analyze, you have to look at comps to find the value of the land.  The only things that you can do with it are: hold it, sell it, split it, or develop it.  Not much analysis to do really.

I am NOT a professional in this space yet, and I don't play on on TV, but I have listened to about 50 podcasts on this subject and I hear that a well-run MHP with all lot rentals on public utilities should run in the 30 - 40% expense range.  Of course that depends on insurance, deferred maintenance, size of park, what you work out with the onsite manager, taxes, etc...

@Aaron Williams - DM me.  I'm willing to give you a hand with doing the comps so you can figure out what to sell it for, who to sell it to, etc...

I'm new in this space and I don't own a MHP yet, but as @Alina Trigub mentioned, the numbers work the same or better with TOH.  The other aspect that I think is worth considering is the time and aggravation.  If you look at a 50 space park and you have 1/2 POH, you have turnover in the 50% range.  So you are always rehabbing, screening, placing, etc... for 25 units (just like an apartment complex).  For the TOH turnover is going to be closer to the 10% range and if you only rent the dirt, your headaches are much less and it will be easier to manage.