All Forum Posts by: Tom Goans

@Billy Gardner,

My method is to back into the numbers to see if an investment is a viable opportunity.

Before you begin, determine your risk and workload vs. acceptable reward. Each person and investment is unique. You must make this determination based on your personal comfort levels and goals with considerations for your family and future.

When I say back into the numbers, I mean begin with a thorough study of the target market, whether it is tenants or buyers. Understand the target market better than they understand themselves. Include considerations for income, employers, trends, desires, wishes, hobbies, and spending habits among others. This type of consideration if very local to the unique neighborhood where the investment opportunity is located.

This study will provide critical information that determines the numbers. For example, determine what the target market is comfortable in paying. Determine if it is better to offer multiple payments during the month.

From this, you can further back into the purchase price with cost considerations, such as vacancy, repairs, maintenance, replacement, insurance, taxes (property and income), overhead costs (daily and during vacancy), finance costs, and then your acceptable risk/workload vs. reward.

Now, you have arrived at the acceptable purchase price for the investment opportunity. If you pay more than your research suggests, this may be a big mistake.

This is just one method for determining the value of an investment opportunity. It is based upon my long history and what was learned from others.

@Lindsey Run,

Steven has given you very sound advice, in my opinion.

To add, consider a lease with option to buy. Many seasoned manufactured home investors are very aware of this financing concept and are open to the idea. They are also aware that in order for them to be successful in collecting from you, you must be in a positive cash flow position. So, the selling price should be more realistic, as well the terms.

Visit with the managers of mobile home parks to find manufactured home investors. A visit to the local manufactured home dealerships could also provide a name or two.

@Curt Smith,

Excellent question.

Top producers do what others are unwilling to do. This old saying remains extremely true and relevant.

To add, do what you love to do or has great meaning to you. By doing this, it is never work. Every morning you will rise eager to go do that thing you love to do.

For example, it is very meaningful to me to help others realize their dreams. I take great pride in being an asset and contributor to the community. The real estate business makes this possible in many ways. I primarily focus my efforts on the Chevy buyers - lower to mid income levels. This is not work, it is my personal challenge to solve problems and put smiles on faces and in their hearts.

One consideration that most old-time investors avoid, if it is a trend and popular, it is no longer a good investment opportunity. This is true in all business endeavors, unless you do what others are unwilling to do - an example is Walmart that put the old guard out of business.

@Michael Krassos,

Please Seek Legal Professional Advice

Legally, legal advice can only be provided by a licensed attorney in the state where the property is located. You should only consider legal advice that is provided by an attorney you hire. Any other legal advice is ILLEGAL and may be very incorrect.

Seeking advice from an attorney in the area where the property is located can be a wise and very economical decision considering the alternative. An attorney will assure you are abiding by the federal and state laws. Every state has unique laws. The attorney will also provide the best advice and options for your specific needs with a consideration for your future. The results will be legally drawn up agreements for your use.

Just they way you communicate with a tenant is regulated.

Moreover, every investment, partnership, and individual is unique. There is no one correct answer. But, there are numerous options that must be considered.

Please seek advice from an attorney you hire.

@Eric Gutierrez,

Honestly, it is impossible to give you a remotely answer to your question based upon the photographs. You really do need someone with experience give this one a physical inspection that includes viewing down the chimney.

As clean as the one is, it would appear there has not been a fire down below for many years. If it is a gas-fired only fireplace, it still must be open enough to have a good draw.

Good luck.

@John Stover,

What great opportunities you have to consider.

My first thought, eliminate the word or even consideration of appreciation from your thoughts and vocabulary. Make each investment survive on its own without any possibility of the what ifs.

Published August 15, 2013:

States like Maryland, Oregon, and New Jersey, which maintained relatively stable markets after the housing bubble popped, saw new foreclosure filings climb by double- and triple-digit percentages in July, according to RealtyTrac.

Then, you may be in an excellent position to help others in the investment world. Be their finance and experienced partner. You fund the projects and they do the work. Your workload is reduced, your financial obligation is reduced, and you have more time to find other investments to increase your cash flow.

This is just a consideration. In reality, the possibilities are almost endless.

Have fun no matter what your decision.

@Dennis Estenson,

I feel you will never regret it. In fact, many things will be revealed you had no idea existed. Your experience should be very stimulating for the mind. Hope you have fun. You will also be better prepared than most of your competition.

Once I owned computer companies. I also took on the roll of IT and primary support for the systems installed in restaurants ... they only have failures later than 10 PM. I was self-taught. This was not so bad during the DOS days and early Windows 95 days. However, seeking a more formal education would have made it easier. I do not know if it would have been much more profitable. My experience is everyone whats the moon and are only willing to pay a dime.

@Jon K.,

First, please know I have been renting residential properties that I own since the 1960s. Experience will teach skills not found in books.

More importantly, I am a firm believer in THE WAY YOU TREAT PEOPLE WILL AFFECT YOUR RESULTS. Treat your tenants as you would like to be treated. After all, they are enhancing your life, as you are theirs. Begin the relationship on a positive win-win note.

As for screening tenants, your reply post suggest your are overstating your thoughts or have been sadly misled.

Learning how to have an informative casual conversation with the prospective tenant and then listening more than talking is more revealing than all the paperwork will reveal. This is not speculation, but fact. I have written about this methods several times in the past and provided many reasons why it is more effective.

There is important information to seek about each tenant or borrower. It is my opinion that lifestyle is critical information. However, I never directly ask lifestyle questions, except one. Tell me about your favorite hobbies.

Another great question that is not part of most paperwork; Do they have many visitors often?

Every adult - every single one including you - has or will have a financial bump during their lifetime. Bad things happen to good people. Two primary causes are divorce and medical bills.

Should they then be considered untrustworthy bums who should be outcast and required to live under bridges?

Many times I have leased or provided financing to people who have terrible credit histories or are being kicked out by the current landlord. Each time, I have had excellent results. In fact, one tenant that was being kicked out by the current landlord is now the proud owner of a home I sold and financed for him and his family. All they needed was understanding and a chance to be successful. They own their home. How many people can make this statement?

Jon, nothing you do will guarantee a tenant will not have financial challenges during the lease term. Nothing you do will guarantee the property will not be damaged by the tenant. There are methods of reducing these possibilities, but your challenges are a part of the business, just as making deposits.

My methods may not be the best for those with less than 30 years of experience, but the principals should be a consideration and perhaps a goal. A more successful career in rental property ownership should include embracing the whole picture.

Jon,

I do advertise credit history is not considered.

So, while others are taking applications, running credit and background checks, I am driving to the bank with a deposit.

I have had tremendous success with my methods since the 1960s. In all that time, I have never asked for a credit history, never asked what their credit history was like, never asked for an application, and never asked how much money they make.

@Michele Fischer,

You are correct, I do receive multiple payments in such a case.

No, I never charge any tenant or borrower any fees whatsoever at any time, other than a late payment fee.

Being flexible is a win-win opportunity and loyalty builder.

If the payer receives a paycheck on the 10th, I generally make the due date the following day. This gives the payer 1 day to cash the paycheck and send the funds. When setting this up, I tell the payer this should be more convenient for them so that they can cash their check and send me one at the same time. Most send money orders, so they are accomplishing two things at the same time and same place.

This method of collecting money is far superior than any other. I collect a late fee about 2 times a year. So the proof is in the pudding.

The idea is to always create a win-win situation. Most landlords rule with a heavy fist, I view it as we are all in this together. I also have other landlord tenants come to me asking for a place to live because they have heard of me from other tenants and their friends.