All Forum Posts by: Brenden Mitchum

Hey @Jason Moore, welcome to the BP community!

Congrats on being ready to make the jump! Rent by the room (co-living) can be tough if you don't have the proper systems in place. Here are my thoughts on your questions. These definitely aren't the answer, just my two cents. 

1. Depending on the size of the building, you could likely set up business internet with a few extenders. If that doesn't work, you'll have to do multiple services, which could get pricey. Do some research on business internet and how offices/hotels provide internet to large spaces. Wouldn't worry about the streaming service though - most folks have or know someone that has at least one streaming account these days. However, it would be fairly simple as long as the service allows for multiple accounts and active users at once. You'll likely just have to pay for the upgraded account.

2. Likely this won't be an issue though if you're purchasing a true multifamily property - these are typically always separately metered (unless they're quite old). However, since you're renting by the room, it would still be tricky to bill folks based on their individual usage. You can split this up 50/50 but that often causes issues if one person is there more often or takes longer showers. The best option here is likely to bake it into the rent. 

3. I would recommend furnishing the entire unit. Most folks who are looking for an affordable living situation such as what you're providing likely don't have furniture to move in. This might not be the case if it's student housing or you're locking in long-term tenants. However, if you're shooting for truly affordable co-living, you'll want to furnish everything. For bedrooms, we do a queen or kind bed, dresser, bed side table w/lamp and desk w/chair if there's space. We actually turn living rooms into bedrooms for our co-living spaces so I don't have any advice on living room furnishings. For the kitchen, you really just need a place to sit and eat, nothing fancy. 

4. Don't get fancy. Again, you're already providing a much needed service - affordable housing. Just focus on doing that very well. Keep the property clean and functional. Screen tenants well. Look into Padsplit if you want a model to follow. You can even hire them on to manage the tenants in certain markets or just use their platform if they aren't in your market yet. 

Hope this helps a bit! Please, feel free to reach out anytime if you have other questions or just want to chat!

Hey @Ellette Craddock, welcome to the BP community!

The struggle is real! Investing in real estate with a busy job that has you traveling frequently is tough because you're unable to really spend time in a market. Essentially, you will have to treat investing like most out of state investors do. You'll need to build a strong team in your chosen market and spend a lot of time analyzing deals and understanding that market. You do have a advantage over other OOS investors though in that you spend some of your year in a great market, here in Atlanta. It might make sense for you to start out with some kind of rental that you could stay at while here in Atlanta and rent out to colleagues while you're away. Maybe just focus on rental housing for folks in the film industry since this is a tenant base that you understand.

Keep in mind capital requirements. A second home loan is at least 10% down (plus another 2-3% for closing costs), just to get you into the property. You might be able to get a primary residence loan for as low as 3% (plus closing costs) if you convince the lender you're living there most of the year, but I wouldn't count on this. Worse case scenario, you're looking at 20% down (plus closing costs) for an investor conventional loan product or something similar. This is likely how you will have to purchase property after the first one. 

There are more creative ways to get into property here in Atlanta and other markets but many of these are less passive or have higher capital requirements. 

Hope this helps a bit though! Please, feel free to reach out anytime if you have other questions or just want to chat!

Hey @Chandler Butler, nice job being proactive here. Too many agents wait until they have their license to start researching brokers. That being said you should also be 100% committed to getting your license before you start reaching out to brokers/agents so that you avoid wasting anyone's time (including your own). 

Now, what you're really looking for here is not necessarily an investor-focused brokerage but rather an investor-focused team. There are small boutique brokerages here that focus on investors. Joining one of those is fine but don't forget about the teams that hang their license with a larger brokerage, like KW or EXP, but still focus on investors. Oftentimes these teams will have both investor and retail agents which will be good for you if you're planning on doing both. 

In fact, I am currently building out the investor side of our team and will be looking to bring on an agent or two in the next couple months. Happy to discuss the opportunity further if that's something you'd be interested in. 

There are also wholesale brokerages here in Atlanta that exclusively work with investors and require all their people to be licensed. Could be a good move for you too if you want to learn more about wholesaling!

When you're starting out, it's the team that really matters, not the brokerage. 

Hope this helps a bit. Please, feel free to reach out anytime if you have other questions or just want to chat!

Hey @Jarvis Brown

I'll have a unit becoming available in the next 2-3 months. So, depending on your timeline, that could work out. It's a 3/2 in Tucker. Feel free to shoot me a dm to discuss further!

@Sandeep Tyagi thanks for the explanation!

So, you essentially own 59 mobile homes on their own lots. This is not a park, nor is it one parcel. Sounds like 59 different parcels. That makes this situation very difficult. This isn't much different than you buying 59 stick builts in a development of 200 homes. Except your homes don't appreciate like stick built homes. 

If it wasn't for your inability to control the homes around you, I would say you just start evicting everyone who is not paying, breaking the law or not following park rules. This would get out the bad tenants and allow you to start over. Obviously, your tenant screening would need to be rock solid to keep out folks like the ones you evicted. 

The problem here is that you might not be able to find decent folks to live there if it's still a considered unsafe due to the other homes. You might be able to hire an off duty police officer or two but not sure if that will solve this.. The only real solution I see here is to find a way to buy the rest of the lots or sell yours. You can't fix location, unless you own it.

@Lee L. Unfortunately, you are doing a lot of assuming here and just hoping the seller is honest and isn't screwing you over. If they were honest then inspection shouldn't be an issue. Maybe you just put down a bit more EM or slightly higher purchase. For them to not be willing, under any circumstance, to allow an inspection, tells me this is a pile of junk and they know it. No other reason they wouldn't let you inspect, right?

Really, what you should do next is go take a look at those 5 "occupied" units. Then find a way to have someone double check whatever foundation work they claimed to have done. 

BTW your own inspection counts for very little unless you're a RE pro and familiar with commercial construction & maintenance. 

Maybe everything is fine but it's a good habit to not ignore red flags as an investor. 

Hey @Lee L., welcome to the BP community!

Well, this is certainly going to be a trial by fire for you. Sounds like you just got something under contract and you're already thinking about taking over the property. What due diligence have you done, if any? Did you just waive an inspection contingency or did you actually agree to not have any kind of inspection? Have you seen all the units, including the occupied ones? Have you seen a rent roll or P&L?

If your answer is "no" to all of these, I'd strongly urge you to get this done before you close on the property. Sounds like you also need to walk units with a contractor since they're in such bad shape. Just so many unknowns here...

Get copies of the leases too so that you can see what the terms are. You are bound to those terms once you take over the property and cannot issue new leases unless the terms allow you to or the tenant agrees. 

FYI going under contract is not the time to reach out to a forum for a list of everything you need to do next. I'm hesitant to say this because that person may have already misled you but maybe your experienced investor contact can help you put together said list.

Hope this helps a bit. Also, hope this isn't going to be as much of a nightmare as I'm picturing. If you have more info or other questions about the deal, feel free to drop those in here and we'll answer to the best of our ability!

Hey Sandeep, welcome to the BP community!

I'll be honest, I am quite confused here. Please clarify. You did not buy a mobile home park but rather some lots in a larger park, right? So, you do actually own the land or just the homes? Did you purchase one parcel of a larger multi-parcel park or is each lot it's own parcel?

Just want to fully understand the situation before I provide any advice!

@Rick Baggenstoss I think you may have tagged the wrong person. I'm very familiar with the co-living strategy. Currently helping a number of clients purchase 2-4 of these every month. We're pushing into the off-market space now to bump that number higher. 

Hey @Austin Kuhnle, welcome to the BP community!

First, independent contractors (most realtors), are not W2 but rather 1099.

It depends what type of loan you're talking about. If we're talking conventional, then it will be impossible to get a loan on your own until you have at least a year of income provable by tax returns. I believe many lenders even require two years. This typically is enough proof for them to see your income as stable and loan based on it. 

You'll have to get creative with financing or find a co-signer until you've built up enough income history. 

Hope this helps a bit. Please, feel free to reach out anytime if you have other questions or just want to chat!