All Forum Posts by: John Stewart

Right now my tenants are long term however I am not sure the usual tenant screening is adequate.   I am looking for tools that might identify prospective tenants who would play the covid card.  I would rather have the property sit empty than have a non-paying tenant living there.  

Mike Ashby

Carr Kennedy Petersen Frost

    You can alway check out upwork.com too

Meeks on Twin View, Costco, Amazon.    I believe Meeks is contractors favorite.

Check out Pensco.com. They have Hugh amt info and may serve as custodians. Also look into UBIT which may be triggered if you borrow money in IRA

If you don't like to memorize formulas  you can always derive the equations if you know the assumptions.  

Assumption 1:  If the tenants pay their own utilities the expense ratio should be around 30% (in a well run park)

Assumption 2:  if the owner pays the utilities the expense ratio should be around 40% (in a well run park)

Assumption 3:  Do math for a 10 Cap-it works for any Cap rate you choose including  positive or negative

*************************************************************************************************************************

Net operating income=gross income - expenses 

Using the expense ration of 30% => Net Operating Income*(1-expense ratio)=> NOI*(1-.3)

Therefore:

NOI/yr=(#lot)*(rent per lot per month)*(12 month per year)*(1-expense ratio)

Cap Rate=NOI/Purchase price

do some 8th grade algebra followed by some 6th grade math (dividing with a decimal)

Purchase price=NOI/Cap rate

Therefore:

Purchase price{tenants pay utility}={#lots*Monthly Rent*12*(1-.3)}/0.1 =>84* lots * rent

Purchase Price {owner pays utilities}={#lots*monthy rent*12*(1-.4)}/0.1 =>72*lots*rent

There are the 72/84 numbers derived

Its not rocket surgery.  A negative cap rate might be a good screen since it would indicate either income too low or expenses too high.  Both situations open the possibility of turn around and value add.  Or it could be a total dog.

Is anyone able to compare and contrast Park Street Partners to MHP Funds?

I invest with Arixa throught my Pensco Self Directed IRA. The return over the last 2 years has been approximately 8.5%. The income goes back to my IRA quarterly. Their website is pretty thorough. You need to be an "accredited investor" although if you are considering trust deed investing that is probably already the case. I compared it to whole note investing and I personally don't want be that involved with the lending process. I am happy to concede a couple of percentage points. An investor also gets a list of loans (flips usually) outstanding and can check the jobs out. I went to an open house on one of the flips with the inside knowledge of purchase/ARV/Loan.

Arixa typically has 30-45 loans out with an average value of $300,000.  They charge 10-12% with points and there is a waterfall revenue structure.  They have loaned and closed well over 200 deals.  I think they get alot of repeat business.