All Forum Posts by: Don Alder-LaRue

The Addendum form....It's simply labeled Addendum (C.A.R. Form ADM).

You'd put on it anything that your buyer wants included in the purchase contact that is not covered specifically in the commercial property purchase agreement.

contact a local commercial RE agent.  They should have access to CoStar, and they can pull rent surveys.

@Dominick Dahmen The CASH program does seem to be a good way to fill a park, but the park owner then has to take on the additional job of selling the home.   I'm not a fan of park owned homes, so I'll leave that out.

There is another way.  Contact mobile home dealers somewhat close to you.  I work with a dealer in Calimesa, CA and he's more than happy to set up a brand new home in an existing park, and deal with the showing and selling of the Manufactured home.  One stipulation, he doesn't pay you rent while the home is being set up or on the market, only the buyer pays rent after close of escrow.  The park still has to approve any potential resident.  

The space isn't bringing in rent while vacant, or while you try to sell the home.  He includes all setup and offers a complete package.  Most dealers with any experience will also know what price point the home should be at for your location.  Consider it OPK (Other People's Knowledge, the dealer will know what price point home to set up)...as well as OPM (Other People's Money, the dealer pays for the home and set up fees), and OPT (Other People's Time, the dealer handles the sale of the home).  And  you get the benefits of filling a vacancy and a new home in the park which can be considered upgrading the park. 

@Eddy Kim I wouldn't use C.A.R. forms for the purchase of a working orange farm. This sounds like it would be considered commercial property, so you'd be better off using A.I.R. CRE forms instead. It's available through your zipforms software. "C.A.R. members may purchase the AIR CRE Contracts Library by clicking the "SHOP" link at the top of the transactions list page after logging into zipForm®."

A.I.R. forms are less slanted towards seller protection.  I feel the protection more evenly distributed between buyer and seller and for that reason like them more.  Cost for AIR forms is $199/year for CAR members.

Before you spend the money on that, check with your board.  They'll probably push C.A.R. forms which you're already paying for.  You could use C.A.R.'s Commercial Property Purchase Agreement and Joint Escrow Instructions (C.A.R. form CPA).  though.   Use an addendum for anything that isn't covered by the CPA.  Even with AIR forms, you'd need to do that. 

I agree with @Michael Ealy, but, just to be cautious, would also plan on a longer period of no rent.  Just because you want the tenant out, doesn't mean they'll want to go...eviction time, plus court costs, (not to mention increased repair to the unit should the evicted tenant decide to trash it) should be added to the vacancy budget.  You may not need to evict, but budget for the worst case scenario and hope for the best.

@Roberto Ramos I'd be concerned about a couple of things you said.

1.  There's no such thing as a verbal lease.  If they're paying rent and there's no written lease, they're month to month.  

2.  @Sean McDonnell is right.  You will most likely have to evict the tenants. If not immediately then in January after the supposed lease is over.

3.  You said the house is a mobile home.  Is this located in a park, or on land you are purchasing as well?  If it's in a park, the tenants are likely not supposed to be there.  Most mobile home parks do not allow the residents to rent their homes. It's considered a sub-lease and can get not only your tenants evicted, but you as well.  Then you have the option to either pay to have the home moved to another park (which is expensive, and finding another location can be very difficult, especially if the home is more than 10 years old), or abandoning the home.  Best case scenario if the park does not allow rentals is the eviction of your tenant, you ending up under the park's microscope to ensure it doesn't happen again, and hopefully you make a profit after rehab/repair, at least enough to cover the costs of selling.  Don't expect a hard money lender to lend on a mobile either.  All the HMLs I've spoken to over the past 20 years have said they will absolutely NOT lend on a mobile.  There may be some out there that do, I just haven't met them yet.

I see a lot of complications that may and likely will arise from this.  If you decide to move forward do so very carefully.  Do a lot of due diligence, then do more. Personally, I'd tell the seller "Thank you but no thank you"

I think that what you're thinking of doing for your parents is wonderful. If you collect enough from them to cover expenses it's beautiful. If you can only get PITI, that's still beautiful. They're your parents after all. Very sweet of you.

@Drew Chance There's a meetup in Palm Desert coming up next week.  PM for info, or you can search for it on Meetup

@Joseph Chui Because we are a resort area, the STR are sucking up all the rentals that the locals need. However, that being said, it's still difficult to find rental purchases that make sense. I can find properties that will cash flow 10% cash-on-cash return based on conventional 20% down financing, but located BRRRR properties is very difficult.

I highly recommend DuaneGomer.com.   He's been in real estate since dirt was created.  Is reasonably priced.   I'm taking one of his courses now (I'm short one for my CA Broker's license).   

I don't know about education for new license.  My course I ordered online and got both a PDF book, and "hard copy" book.  I'm old fashioned, I prefer the hard copy.

Duane also does the circuit, going from real estate board to real estate board offering courses for continuing education for license renewal.  He's always entertaining, and extremely informative.

I am in no way affiliated with DuaneGomer.com.   I am a very  satisfied client.