All Forum Posts by: Kevin McGuire

Jeffrey, I totally want to encourage you to get into real estate investing. I wonder though if there might be better investments for your hard earned capital. My thinking is that I want to own the thing that appreciates in value because of limited supply, that's why I love real estate. Land appreciates, houses depreciate. I invested in mobile home parks through a fund because I want to have partial ownership in the appreciating part (the land) while the tenant owns the depreciating part (the home), to me this is such an ideal strategy. Check out the excellent posts by @Paul Moore.
If your choice is due to limited capital, I know there's a whole approach around low or no money down real estate investing, I can't speak to it but there's lots of books and posts here. Plus there are lower price points in different geographies (invest out of town or out of state).
Best of luck to you whatever route you choose!

@Anthony Simboli No problem! To my knowledge, Microsoft does not turn your stored data into an asset which they then use or sell. However, if you really want to be defensive, there's Box for cloud storage, and Proton Mail for email, both of which use "zero knowledge" storage. I've looked at Box and I don't mind paying for cloud storage (since otherwise you pay with privacy) but at the time I didn't like the application integration on iOS as much. Definitely worth a look though. 

@Jeffrey Lazenby Great you want to get started. When I saw the title of this post I thought you were interested in mobile home parks, but seems you want to invest in the homes themselves. This is the opposite side that I want to be on for mobile home parks: I want to own the asset that appreciates (the land), not the part that depreciates and requires maintenance (the mobile home unit). If your choice is based on the amount of money you have to get started, perhaps you’d be better off partnering with others and not narrow the deal type.

@Anthony Simboli QuickBooks Online is monthly subscription and browser based so you can run it on either Windows or Mac. There’s also an iOS app.

I use Microsoft Office (One Drive, excel, word). I just don’t like giving all my data to Google for them to sell in some form or another. And I use QuickBooks Online.

Most important I find is being cloud based.

@Mark Miles it does account for it, that’s the capital draw down I mentioned. But in any case I’m sure there’s a better experiment to be constructed, I just made all that up as an example. My point is that you don’t have to know exactly the right structure to start. Moreover, just the act of thinking of it as an experiment will help to drive clarity on goals, risks (to your point), tolerance for those risks... which may lead to a better experiment design or a decision not to do anything!

I’m taking a chapter out of the book The Lean Sartup (Eric Ries).

Some great answers, so taking a different approach to the question:

View this as a business experiment that you and your PM are jointly embarking on. How would you run the experiment? What are the success metrics? How would you know when to stop? For example:

The minimum is that you both expect to make the same or more than you are today (you make at least as much as the monthly rent, your PM as much as their monthly management fee). You’ll give it 6 months and evaluate. You’ll put up the funds to buy the furniture, etc. and all proceeds in excess of your minimums will first act as a draw down against that capital investment. After that, you will split proceeds above your minimum in some ratio (say 50/50, since you’re taking the bottom line risk but your PM is taking the time risk). At six months you’ll both know more than you do today and can decide if this or a different business model makes sense. There is no one way door here; in the worst case you’re out a bit of rental income, your PM is out a bit of time, you shake hands and go back to doing what you’re doing today, but in the best case you both learn a new business model which you can continue to tweak for mutual success.

@Chris Clothier that matches my view. I investigated a turnkey operator and basically the price is the price. If you want to negotiate and get better value then you’re not the audience for turnkey. As another mentioned, you pay for convenience, that’s the turnkey’s product. As mentioned elsewhere in this thread, the “error on measure” of an appraisal is high. So the operator doesn’t want you to waste their time if the appraisal is off a bit from the asking, but at the same time the contract ensures you have an out if it wildly differs, in other words that they’re not bilking you. Seems a good compromise for both parties. Finally, if you’re concerned about true value, as a lender said to a friend of mine who did invest in a turnkey, the lender has a vested interest in ensuring that the price matches value since they too have money in the deal.

“Tremendous” (stupid phone keyboard!)

@David Lilley I love love love this deal, temwndous upside and so little downside! Congrats!

@Gerry Magrini Agree with the great comments on the “no” side, I personally would never allow it. At the best you may get a few more bucks but at the worst you take on liability issues, increased wear and tear, and may lose your current LTR tenant because nobody wants to live beside a hotel. More generally, be clear on what your business model is and stick to it. Keep it simple. That will allow you to focus, expand, and be successful in the long term.