All Forum Posts by: Chase Louderback

Second @Greg Dickerson's advice.  Especially with the price range and size properties you are looking for cold calling and direct mail marketing could be very effective for you.

Best!

@Kenny Kamdoum  All great suggestions above.  You can use Loopnet or CRExi to get a really rough feel.  CRExi will usually have the OM and financials so that you don't have to contact the broker.  Just keep in mind it's probably not a deal if it is on one of those sites.

I'll be there!  Hoping some other BPers will be there to connect with.

Agreed with those above.  It's up to your personal goals, network and current resources.  You can do and be successful in any of those 3 things.

 That's great news!  That really helps you get a good idea of the market value and will help with negotiating.  If your analysis is showing that you need to be sub 100k to make the deal work then the numbers don't lie.  

One thing to consider would be to make sure you have at least gotten a quote of your refinance after you complete your renovation.  Make sure you check to see how long it has to be "seasoned" after purchase before you can refi.  Average is 6 months to a year, but can vary depending on the lender. Check that out so you can verify what your hard money loan holding costs will be since that may effect the deal.

Hi @Allen Claussen,

Some of the things I have learned from a recent on-site visit to a heavily distressed student housing asset is that you need to:

-Check the comps to see what similar properties are offering in term of amenities and rent structures (i.e. does rent include all utilities, some utilities, is it bill back, cable and internet, furnished vs unfurnished, etc.)

-Check to see the local property's layouts.  Are your units going to be larger/smaller, how is bed/bath structure? are they all at parity?  If your target property would require shared baths and the market all has a single bathroom per bed then that will effect your rent as well.

-Make sure you are very familiar with the college, if that is your target demographic.  Check with a local housing authority at the college to see if enrollment is increasing, are they building any on campus housing for students, is there a movement to bring more students back on campus, does the person know of that apartment building and what's there opinion of it, how about that area - is it a desirable area for students to live? Walkability, public transport, etc are other things that should be considered.

-Make sure to factor in how the leasing structure works for student housing in your underwriting.

The big question is if you will be pursuing this as solely a student housing project then your success will be reliant on the school and doing similar due diligence is advised.  If the plan is to rent the property at market rate and not a "per bed" basis then this may not be as necessary.  

Happy to connect about other due diligence we recently went through on a student housing property.

@Raden Mantuano

@Joshua Hively had a great idea with running the property by a local hard money lender. You should have your own ARV determined by running comps. It sounds like there isn't a lot of comps in the market based on your original post so do you best to determine the ARV then keep it a little on the conservative side.

You can get your hard money lender's opinion or another seasoned local investor's opinion.  If you really want to you could get a BPO (Broker's price opinion) with current market value in "as-is" condition and an "as completed" report based on your projected repairs.  However, be sure to take those with a grain of salt as only YOU really know how the end product is going to look so their "as-completed" report could heavily skew the value in one direction or the other.

I haven't seen a county record show the appraised value, it's usually the tax assessed value which may not be indicative of market value.  You could call to verify.  Also, sometimes properties can get a reduced tax basis for things such as "farm use" so check what the taxable value means for your county as well and why this particular property's taxable value is so low.

Hope that helps!

@John Hall

Gotcha.  Well maybe some of the local handymen you are looking into will work on it.  That's odd that the other contractors you have asked said they won't work on MHs.  

Selling for cash as @Rachel H. recommended could definitely be a route you decide to pursue, but keep in mind you are likely to get a less desirable tenant when you market a fixer upper.  In my experience, with MHs or single family houses, when you market a lower quality product like that you are limiting your buyer pool.  A lot will move right in if possible and not fix anything.  Then, if they move out due to the MH being uninhabitable in a few years, you will have a larger expense.

@Raden Mantuano

4 units and less should be valued based on similar comps. 5 units and higher will be the income approach.  

Could you ask the seller how they arrived at that asking price?  This can give you a better idea how they are valuing the property and you could also use the needed repairs ($30k+) as grounds to negotiate the price lower.

@John Hall

It is cost prohibitive to switch out MHs like that unless you basically can't rehab the MH.  Not to mention you take on additional risk with transporting the MHs in and out of the park. We always rehab our MHs unless there isn't another option.

Out of curiousity have you gotten multiple bids on the renovations? 10k for each would be high for my market unless they are absolutely trashed.

As for the game plan, after renovation our typical plan is to seller finance the mobile homes so we aren't responsible for any more repairs and a park that is on lot rent only is generally more desirable for resell.  Should try to get at least 1k down, but this amount can vary depending on your market.

Hope that helps!