All Forum Posts by: Ethen Armstrong

Attorney Barbara Wellton - Select Settlement

Is there any consideration that all 16 of the POH's were completely gutted and remodeled in the last two years? Or because they are POH it doesn't matter at all when it comes to a lending party evaluation?

just for clarification what do you mean when you say "REAL"?

goal is to add 3 new units a year for the next 5 years so when it comes time to refinance we would have 43 units at roughly $325/m, 43 x $325 x 12 x .6 = $100k NOI which would put it at a 14% cap rate, right? Or am I missing something?

Also, where does the additional income of $64,000 fall from the POH fall into everything?

I appreciate all the insight Frank, trying to learn all of this so we make good deal decisions!

Ok, so my partners and I are looking at a MHP with 31 currently rented units and 15 vacant lots on 10 acres of land.

There are 16 POH's rented @ $600/m and 15 owner owned @ $265/m. Current market lot rates are around $300 - $350/m, and the rent has not been raised in about 4yrs according to current owners.

Current expenses for the park are roughly $47k with me padding the numbers quite a bit to stay conservative(factored 10% vacancy & roughly $15k for property management when we, as owners, will be self managing park is 15 mins from my house).

The rough NOI is coming in at around $99k.

Only real downside is park is on Well Water and Leach Bed septic system. So a lot of hassle with the D.E.P. that we have to deal with but from all of the conversations with the D.E.P. and seeing labs the water and sewage are in good order.

The asking price is $710,000 seller financed at 3.5% for 15 years with a balloon payment at the 5 year mark with option to extend financing down the road (buying from mom & pop who don't want to pay capital gains).

So after financing we are looking at a take home of roughly $47k cashflow before taxes.

Thoughts?

@Frank Rolfe

@Tae Kim That's awesome man! Congrats on getting started on your journey. My friends and I just started investing in real estate recently as well. They live out of state and I live in Erie. I'll give whatever help I can about the market/locations etc. Hit me up. I'm sure there are others here as well that will be willing to help.

@Brandon Penn

I concur

@Aaron K.

Yea he has a house in Fort Meyer but he grew up here in Pa. So his investment properties are here. So he does a bit of traveling back and forth and repairs stuff himself. He got injured a little while back so has put serious thought into retirement. He wants to help me get my investment portfolio kickstarted so he asked me to come up with ideas on how we can make that happen.

@Dave Foster

Awesome Ideas! Would love to pick your brain more on these ideas. Is there a good way to contact you, if you are OK with that?

I have an investor friend who would like to sell me his real estate, but he doesn't want to pay a ton in capital gains. Are there ways to avoid paying tons in capital gains legally? I know a little about seller financing and lease option buying, but not all of the tax details around those ways. Also are there ways to tie in 1031 exchanges for someone who wants to sell and get rid of their properties? Just curious to see what the options are.

He of course wants to be above board with everything legally. So just looking for viable options, nothing shady. Thanks!

@Dan Heuschele

Correct ARV was only for the single family not including the addition. Thank you Dan! I appreciate all of the feedback!

@Dan Heuschele Great insight, thank you Dan! I really appreciate the breakdown. And yea in my market basically the only thing going is cash flow. Appreciation is not too great around here. It all depends on the neighborhood. And I apologize for not clarifying $40k would be to also build the garage building with additional unit on top. I just realized I never clarified that! The single family will only take about $20k of work. Man I was wondering why I was getting such bad responses to the numbers.

My partner owns an escavation company so we would be able to do all of the foundation ourselves at cost which will save a ton. So essentially we would have a 4 bedroom single family and a garage with 1 unit for the total all in of $53k.