All Forum Posts by: Joshua Christensen

I always get Title Insurance because you have no idea what issues exist before your ownership tenure.  We always ask the seller to provide it in the deal so we're not paying for it ourselves.  They shouldn't have a problem insuring a clean marketable title.  

I've not invested in CA, and I'd enter that market extremely cautionsly based on various rent control issues, eviction issues, and the political environment seems to be very unforgiving for landlords.  Spend a great deal of time investigating and doing your homework before jumping in.  

Robert is a standup guy and their company is solid based on our experiences.  We're in with them on a deal in Atlanta that has gone as well as can be expected.  It was acquired at the end of 2022, so rates were climbing and rents in the area were starting to slow down.  All in all the distributions were paid slightly lower than initially expected while the remaining is accrued.  K1's were distributed with the cost segregation and 100% bonus depreciation allowed in 2022 which helped offset other taxes, so that was nice.  

Hey Balkar,

Typically, the CoC in the first year is less than across the board. The 'advertised' Cash on Cash is estimated as an average (usually over 5 years). The first year is the hardest as the business plan at acquisition has not started yet. It will take the first 12 months to do renovations (lower occupancy & higher costs), bringing the current rents to market depending on where lease terms are currently, and etc.

7% preferred means (as an example) that if the first year cash flow is only 6%, the other 1% will accrue to your credit until it catches up at a later time when cash flow improves or an equity event (sale or refinance) cashes you out.  

The 70% equity is all means that after the 7% guarantee is met, any additional cash flow & equity is split between the sponsor and the investor 70/30.  Investor always gets paid first.

Remember that these MF deals are not in a vacuum.  The occupancy fluctates, the collected rents fluctuate, the repairs and expenses fluctuate, all on a monthly basis.  Some months have much higher collections than others, so the estimates are just that since no once can see the future exactly.  

Hope this is helpful. 

 Hey Hugo!  Congratulations on your decision to enter the MF arena.  It's definitely not for the faint of heart, so I applaud you.  I started in 2008 with a group that I paid a large amount to and found myself with good knowledge and no real life experience.  It wasn't until I started doing deals that the real learning began.  

You cannot impose those restrictions.  You can have clauses in your lease regarding a Substantial Lease Violation that includes discharging a firearm in the apartment or on the property.  In New Mexico, that is a 3 day notice to vacate.  Anyone can own firearms within the law.  

1. not knowing / understanding the area you're buying in (D class - It was a "hot" deal at a "great" value)

2. Made the mistake of working with a voucher program to "help" the homeless.  The tenants created a lot of havok - yeah, the program paid, BUT the damages done, the shooting on our property from guests, drugs, etc. were not worth working with the program.  

3. Not keeping enough in reserves for unforseen items the seller "forgot" to disclose.  

All in all, we did well with our first one and have no regrets, just little tweaks to our process as we learn and continue to grow.  

 Thanks Roger!

 Thanks Jordan!

 Hey Jeremy,

Interesting enough, manufactured homes in parks don't appreciate as fast.  Where people get hung up is that much like a car, a new MH may lose value coming from the dealer in what you pay going into a park.  Adding it to land on a permanent foundation does preserve the value however.  

Also keep in mind that as an affordable housing option that lands between renting and single famile detached housing, the manufactured home provides ownership.  When the housing market improves, the median home values increase.  These affordable manufactured homes also increase with the overall market.  They are still a segment of housing after all.

Go back 40 years and the quality of the homes was terrible.  In 95 the construction standards improved and they have been improving more and more every year since.  The quality of construction on the newer manufactured homes is to a much higher standard than the old school tornado magnets.