All Forum Posts by: Bab Adetiba

@Jim Froehlich this book was written in 2015. WHen did you do the deal? Do you consider the book up to date and relevant?

Hey, 

I have an agent helping me acquire a 38 space RV park with a 3/2/2 home in East Texas and I am doing so pre eval before walking the property. Asking $659,000, cap 13.5%. Private financing available: 50% down, 8.5% interest for 3 years.

Right now operating expenses are at 37% but that is with a low management expense and no lawn care. 

The seller doesn't account for any repairs or cap ex.  I see the owner has a new septic tank system - so that falls under cap ex.  What is included in cap ex and repair on a trailer and rv park? 

I understand parks traditionally cost less to maintain than apartments but 37% doesn't appear accurate. In my spreadsheet, I increased management to 11% of gross income and lawn care to 6% of gross income or $700 monthly.  That increases operating expenses to 47% and 11% cap rate.

I am located in the DFW metroplex. Is there anyone with trailer park experience willing to provide some pointers? I can provide lunch and share my calculations. Help!

Do you pay this $8500 cost for each deal you set up? Also, are the investor funds used to compensate yourself of this cost or is just the cost of doing business as a syndicator?

@Marc C.

In your scenario, did you still have to deal with SEC? My understanding was that if you form an LLC with the partners, you can avoid the SEC, as you are not selling securities or crowd funding, or etc. @Garrett Hogan

Of all the topics in real estate, lending, syndicating and crowdfunding are the most confusing for me. 

Simply stated, my LLC wants to be able to receive a loan from individuals to finance a rehab. I am finding so much conflicting information in regards to this scenario. I do not want to become a full-time syndicator or anything but I don't want to get in trouble with the law. These people are not accredited investors, just regular people who want a return on their money.

There has to be a simple way and term to permit this transaction with little paperwork and without an online platform as a custodian. Does a promissory note suffice for the private lenders?

Full analysis of the property which didn’t accept my offer. 26 units Asking: $575,000 Offered $550,000 Op expense is 55% Noi: $72,000 Cashflow $45,000 29% Coc 13% cap rate 30 year mortgage at 6% is $2,062 monthly I can email my spreadsheet to anyone interested.

Ok I am not being as technical as I should be. I do know debt isn't included in expenses. Vacancy is subtracted from  gross rent however I am not familiar with this repair escrow. If it is what it sounds like, I will look into it. Thanks for the advice.

OAN: I found some great BP articles on syndication and it filled all the gaps for me. 8-10% return and 75/25 split, or whatever the investors decide.

Basit Siddiqi Thanks for the in depth response about cpa and tax planning. I’m in Dallas and our portfolio is mainly in Texarkana. We acquired 11 single family rentals In 2017 and have some 2018 goals including some mfh deals and new builds. My cpa from who manages my Trucking business offered advice but I don’t think he knows much about rei. I really want a cpa who specializes in rei. someone else referred a local cpa. Do you service clients virtually?

Correction: 15/85 split , not 75... They will be an equity partner in the new llc What is 12% pref? Also are you suggesting 11% cap and 25% Coc is too good to be true? After reviewing some similar deals, 15% split is too low. I think 20-25% is more fair. In addition, I will be managing the day to day. I don’t think expenses are under projected although I’ve never done a mfh deal myself. the expenses include third party 8% management, 10% cap ex, aggressive water and electric utilities, the $2300-2400 mortgage (at the asking price), 5% vacancy (average occupancy is 100%) and some other lines. I’m in Dallas and if anyone wants to look at the numbers with me, I’d love to take 30 mins of your time and beer and pizza on me . Virtual meet ups are cool too!

We have under a dozen doors in Texarkana/wake village and enjoy the 3% and up rent to PP for single family. In 2018, we plan to enter mfh  and the numbers appear to match that same trend. 100% occupancy for mfh is a norm for the area and with A and M new campus and downtown renovation, you can bet the area is a good place.