All Forum Posts by: JM Payne

If people are making great money doing something, there is someone just around the corner trying to figure out how to sell you the hype without all the work.  It's the way of the world, but good on you for wising up and finding your way here.  There are good people here, and most of what you can find in those seminars you can find here for free if you're willing to take the time to search, read and interact.  Full disclosure; I haven't taken Ken's course, but I do watch his youtube vids as well as Graham and Kevin's...tons of good info.  Spend some time digging through threads, pick up some books, join a local meetup or investor group, and find a mentor that you can actually interact with.  Best of luck!

- jm

You have to then get in contact with the owner of the property and convince them to sell you a property that you have no intention of buying.  Best to be honest with them up front and tell them what you intend to do.  Don't forget to add the "and/or assigns," or whatever is required in your state.  Best of luck!

- jm

Cost, sales and income approaches are used at the appraiser's discretion, just like residential.  The different approaches can be used to corroborate a value, but are not added together as you described.  In the given example, they would have to go by income cap to justify price.  Hope that helps, best of luck.

-jm

You're looking to do a new build and you can only afford 5% down of the land?  I'd find a better way to deploy capital and/or save more cash. Specifically, I'd be nervous about touching hard money unless I had personal experience with and was supremely confident in the builder's ability to deliver on time and had already done the leg work for site dev and permitting.  You're giving away a lot of control and placing your ability to succeed in other people's hands.  

If you've already built houses before and are aware of common practices to [try to] keep a builder on schedule, then I would reach out to friends and family that may be wanting more than a fraction of a percent from a savings account.  Best of luck with whatever you choose.

- jm

Fundamentally, it depends on your investment and business plans and goals.  Sometimes it's better to pay down debt, sometimes it's better to reinvest. 

We happen to be in the exact situation you're describing at the moment...it's a value add deal so we will rehab the property and rent it out...once it's performing, we'll refi (very likely cash-out) and pay off the seller early.  If it were my first deal, I'd likely pay it down, but it depends on your aversion to debt and ability to make things happen.  Best of luck!
- jm

Make sure they're newer than '76 when HUD codes went into effect.  Be sure to get title or bill of sale if title is not available.  Be sure to check with the municipality first about the continued use of a manufactured home.  Check for actual proper installation which varies by locality...ideally you want it installed such that it becomes immovable real estate, and not personal property, for ease of lending.  If the house has been vacant at all, double check to make sure they'll let you re-occupy.  The rest is pretty simple...tons of vids on youtube about how they're built and how to rehab. Best of luck!
- jm

The last property we bought, we got the owner to hold 80% of the note and borrowed the down from a family member looking to beat out a .5% savings account.  At the end of the day, we were only out for the closing costs, and once the property is rehabbed (we do most of the work ourselves,) we'll rent out the two units and wrap it into a no-doc loan.  The sky is the limit, if you're crafty, but for sure grab a copy of [your money or your life/simple path to wealth/Set for Life/IWTYTBR/etc] and get that debt under control.  Best of luck to you!

- jm

Well.  There's nothing necessarily wrong with that scenario, but buying land and banking on appreciation is gambling.  Sure, it may be worth more, but it may be worth less, the same, or nothing at all.  If you were going to buy and develop, then you add value, but why would you tie capital up in a net-negative asset? 

If fundamentally you guys are just looking to have a property to enjoy on the weekends, then buy away and enjoy.  Also, if you're not married to the cabin idea or if you want to generate income before you get that far, check out hipcamp, where accommodations are often much more spartan than say airbnb or vrbo.  Best of luck!

- jm

I can count on exactly one finger the number of friends I have with which I would attempt this. I've known him since the 6th grade, and we both have a lot of experience in REI and construction, and he would probably still tell me I'm nuts.

Even if you have a great friendship, that's a massive project to work towards and a lot of outlay before you'll see cashflow, at which point you'll have an active business, not necessarily a passive one.  Given your age and financial position, I would pick off some smaller deals to generate passive income, and then go build the dream vacation rental business.  Whatever you choose, best of luck!

- jm

Originally posted by @Jeffrey St.Laurent:Is another strategy to use a HELOC to close on a deal and then refinance the property to secure the current low rate

This is literally my current business model, with rehab and renting out occurring between the two. It's basically BRRRR and I'm using somebody else's money for the B part. Works great. BP has a whole book on it if you want to read up. Have fun and good luck.

- jm