All Forum Posts by: Eleena de Lisser

The Cold Hard Lessons of Mobile U.

An excerpt:

"It was Day 2 of Mobile Home University, an intensive, three-day course on how to strike it rich in the trailer-park business. Seventy-five or so students had signed up for the class, which Rolfe offers every other month in different places around the country. Most of the enrollees weren’t real estate speculators; they were jittery members of a hard-pressed middle class. They were nervous about retirement. Or they were worried about their jobs moving overseas. Or they were making $100,000 a year, maybe even $200,000, but felt the need to earn more. All of them, though, had somehow come to see the lowly mobile home as their vehicle to financial freedom.

As an instructor, Rolfe has a veritable Ph.D. in the habits and rituals of trailer-park residents. It’s as if he carries a map in his head based on trailer parks he has bought or at least contemplated buying and that gives him a fascinating, if perhaps narrow, view of his fellow citizens. Trailer-park residents living in the North, he told everyone, are rock-solid citizens compared with their counterparts in the South. For one thing, they tend to be neater and also more responsible. In Texas, for instance, 5 to 6 percent of their tenants are delinquent each month paying the rent, compared with less than 2 percent of those living in parks in Wisconsin, North Dakota or Minnesota.

Rolfe avoids buying any parks in New York and California; both states are too “tenant friendly,” he said — too much in the way of time and money are required to evict someone who is behind on the rent. And forget Las Vegas, Phoenix and other locales hit hard by the subprime meltdown. The glut of cheap homes represents competition. “If we look on Zillow and see houses selling for $30,000 or $50,000, we’re walking from that deal,” Rolfe said. In most of the country, the key to calibrating the proper rent means knowing the price of a decent two-bedroom in the surrounding area. If the going rate is $700 a month, Rolfe said, then cap your lot rent at half that. And think long and hard, he warned the class, before crossing the $500 threshold. The industry “sweet spot” is a lot rent of $495, he explained, but raising it by another $5 “could mean death.” On the other hand, Rolfe said, you can always have your tenants pay for water, which is a trailer-park owner’s largest expense.“

There's a new trend among homeowners looking to buy a home in 2014. They're choosing to rent out their current home instead of selling it to buy their next house.

39% of buyers prefer to rent out their last home than sell

Experts are attributing this to the refinancing boom.

"Homeowners who refinanced when fixed mortgage rates dropped below 4 percent will be less inclined to put their homes on the market as interest rates climb. And as a result, the limited property supply already impeding sales in many markets may not ease anytime soon."

Fallout from Financing

She's in the Cincinnati area. Butler County, Ohio.

Anyone have any experience dealing with Missy McCall-Hammonds of Retire With Real Estate in Ohio? She's a turnkey operator in the Butler County area.

@Kozette Feaster

Don't let a couple of guys who don't know you and don't know what you're capable of doing get you down. I think it's fantastic what you're doing! In a couple of years, when you are massively successful, some of these same men who were condescending to you will be beating down your door to either work with you or work FOR you! :) Best of luck to you!!

For any seasoned investors operating in the Philadelphia (city/suburbs) and South Jersey area, what are some good bread and butter areas to consider for rental properties? By this I mean communities that have good to strong rental demand and have plenty of properties that would fall near the lower median in price, i.e. the "sweet spot" of cash flow possibility. Thank you.

You're right.

Thanks Dmitriy and Ann for responding.

Hi Nathan, welcome to the BP forum! I've heard Pittsburgh is a good cash flow market, and with your ability to do all cash deals it sounds like you are off to a great start! Look forward to reading more about your RE investing here in the forum.

Thanks, everyone, for the warm welcome!! Really appreciate it!

My employer offers a generous retirement plan: 4% company contribution (regardless of whether or not employee contributes) PLUS a 5% company match. In other words, a total of 9% from the employer if the employee contributes 5%. All of this would be in pre-tax dollars.

My question to the BP forum is this: Would you stop contributing pre-tax dollars to your retirement plan (and give up the 5% company match) to open and fund a Roth? Stopping your contributions to the company's conventional 401k would be a temporary move. Just long enough to put the $5,500 in the Roth annually. I like the idea of having a Roth SDIRA for real estate investing.

Your thoughts?