All Forum Posts by: Christian Carson

Thanks @Joseph Gibbons !

An LLC is important for protecting yourself and your assets when insurance fails to cover a casualty loss or a lawsuit against you. Probably 90% of people don't ever need LLCs, but those who do are thankful that they did it.

You're right to identify that I was talking about Coventry with my $1200 rents. Honestly, though, I have a deal on the table for a 4000 sq. ft. duplex for $28k, 50k in renovations, and $1800 in total rents in a great neighborhood that will produce a 13.8% cap. I haven't yet found a deal in Lakewood that will come close to matching that. It's not hard to break into the fringe market around Coventry which is heating up quickly as the foreclosure crisis lets up. The University Circle area contains a tremendous rental market--we have two universities, three colleges, and a huge high-tech industry leading the state's job growth.

I don't know the west side because I don't invest there. I've had great luck in North Collinwood with the killer deals over there, but it takes a good deal of effort to get good tenants renting from you. Part of this comes from simply maintaining your property to inhabitable standards, which is more than what a lot of absentee landlords can offer.

@John Ellis : I have the same sentiments about Lakewood. It's a great place to live, but you'll be hard pressed to find a 10% cap even on the bad side of town. I can do 10-20% cap in desirable east side suburbs all day, even in Cleveland Heights where taxes are at least 30% higher than Lakewood. The universities and the cultural institutions of the east side drive rents far higher than the west side. $1200/mo for a 2 bed apartment in a (very) desirable east side neighborhood is normal and expected--an equivalent (very desirable) Lakewood apartment is nearly half that.

There's an REIA that meets once a month in Brecksville/Broadview Heights. Last month they had Judge Pianka, nationally notorious of the Cleveland Housing Court, as keynote speaker.

Hi all,

I've finally found a regional bank that will write nonconventional rehab+purchase mortgages. They are 5/1 ARM, 20 year term at 5.5%. These aren't exactly Fannie terms but they look like the best available to an investor dealing with homes with <$50k purchase price.

The banker offered to do this in my personal name or an LLC. My concern is this: when the time comes to refinance, will I be better served holding these in my personal name? It seems that reading other forum posts indicate that banks might require me to season the title in my personal name for 6 months before refinancing. I value LLC protection highly, so this is kind of disconcerting for me.

I've also been kicking around the idea of doing a 1031 exchange with my real estate colleague after 1 year and obtaining purchase money financing on one of his properties. This might do us both a benefit since we would be able to "cash out" on both of our properties.

Does anyone have any insight for me? My number one priority is to get started swinging hammers with this financing opportunity, but I don't want to be disappointed down the road.

@Matt B.: There's a major stigma associated with mobile homes in this area. It's seen as a country thing, but this park is located in the middle of the city, where single-family homes can be purchased at a price point of $60k-$100k in the same general area. I'm going to guess that the only target demographic is going to be low-income retirees. The market for these kinds of places has really bottomed out in recent years due to the loss of low-skilled blue collar jobs in the area. The people with steady incomes, generally, can afford SFHs.

@Bill Gulley They make it easy here to redevelop. I've identified certain city incentives for carrying out this kind of redevelopment that would really boost the bottom line to this kind of project. I like the idea of lobbying them to help relocate residents; I think certain nonprofits might step up to do that. I've already had dealings with the local CDC, whose number one goal is to clean up this area.

Hello fellow investors,

I have an opportunity to purchase a large, 100+ unit mobile home park. The 28 acres it sits on is highly valuable land, the park is dilapidated, and the owners are behind on taxes. The city has been trying for years to get rid of it and merge it into the public park next door, but I suspect the highest and best use is a SFH development.

As I know little about MHPs, I would like to reach out to those of you who are experienced in dealing with them and what pitfalls to expect. Specifically I'm wondering about the following:

- How long is a typical mobile home lot lease?
- Would eviction be an option?
- How costly is it to dispose of an abandoned mobile home?
- Are there any other pitfalls to remediating the land for redevelopment into quarter-acre lots? Environmental considerations?

This sounds like a difficult task, but the potential is high due to its being adjacent to a beach and nestled between two public parks. It's now a matter of determining how much it will cost to clear the land and how long it will take to get all the units off the land.

I'd love to hear from anyone who has done something like this before!

Thanks

@Scott Seaman -- That idea sounds like a good one. The issue is that if they counter, and I accept, they're forced to breach one of the contracts if the original buyer decides to move forward.

Thanks @Wayne Brooks

I just checked the comps and it looks like I might have appraisal problems, too. This is one of the more upscale neighborhoods in the greater Cleveland area, and this is one of perhaps two duplexes in the immediate area with SFRs selling for 185k - 1mm. The closest comps are a half-mile away in a very different type of neighborhood with prices varying from 50k-150k. Well, I'm going to put in a full price offer and see what happens. The seller's agent doesn't want to give me any information about the other buyer.

@Wayne Brooks, my mortgage is a conventional. Does that mean I'm not stuck with the previous appraisal value? I won't be able to pay above appraisal, will I? I'm guessing the appraisal was lower than the buyer's offer, and the buyer wants to lower the sale price now?

I'm also not sure what his purchase price was, since his offer was accepted before I submitted mine.