All Forum Posts by: Chris Kelch

40-100 pads, 100K+ metros in Wisconsin, Indiana, Michigan, Ohio.. public utilities, septic OK any condition 

I got a Mechanical Engineering degree from UIllinois, worked as a Mechanical Engineer for 5 or 6 years, and then quit to go full time REI. I miss the engineering work but I do not miss corporate America.

I agree with what’s been said - the way to do it is have a lease in place and track income and expenses by having them flow through a separate bank account. Then have your accountant do bookkeeping and taxes on that bank account. It’s clean and I can’t think of any downsides to doing it this way. 

The rough way to get your starting point on value is to multiply 23 (occupied pads) * $200 (lot rent) * 12 (months) * (1 - 0.3 (rough expense ratio for park w city water/sewage)) / .085 (cap rate)  = 454K. You get the cap rate in that by figuring out what cash on cash return you want, and working backwards from that and % interest on the loan. If this number comes in close to ask you can figure out what value you want to assign to park owned homes. Echoing the other points in this thread asking price is probably too high esp for a smaller park like this. There's also too many park owned homes

Is there an abandonment clause in the lease you inherited? Sometimes there is. 

Hey Scott, 

Which investing strategy do you think you'll be using? If you'll be fixing up properties it's likely better to be closer to them. You can manage rehabs from afar if you set up boots on the ground but there is no sense in doing that unless you have a really good reason to. 

Greg made some really good points. I concur doing city to city comparisons is a better route than trying to do a broad state to state analysis.

 Chris

Hi Kendra! 

Before you build a team and look at properties I'd recommend spending a decent chunk of time on your real estate education. I would start by listening to as many of the BiggerPockets podcasts as you can, reading The Book on Rental Property Investing by Brandon Turner, and checking out the webinars. 

Thanks for the perks BP! 

I agree with most on this thread - pay off a sizable portion of your loans first. Paying off your loans is a guaranteed interest rate albeit elimination of a percentage rate that is working against you. 

If you haven't already, I would check out Scott Trench's book Set For Life and mrmoneymustache.com

Also, although not directly relevant to your situation, here is a specific article from Mr Money Mustache that has a lot of really good points.