All Forum Posts by: Nathan H.

Quote from @Jacob Sherman:

Quote from @Nathan H.:

Any MLOs out there that would be interested in working with me in Colorado? My income is difficult for an underwriter to understand. It's inconsistent and consists of various types of income (ie. LTCG, STCG, rent income, a little Sch. C and some W-2 for some years but not current).

Happy to share details if someone feels they can help. Thanks

 Hey Nathan ! Have you explored any bank statement loan options ? 

 Jacob,

I’ve used one before for an investment property but with this being my primary, I’m hoping to get the benefits that come with Fannie/Freddie loans. Rate, amortization, low down. Thanks for the response and please feel free to correct me if my assumptions are wrong and these can be competitive term-wise

Quote from @Mike Grudzien:

Nathan,

Don't know if I'm interested yet (need more info), but I'm curious.  Still trying to understand your scenario and your ask.
Do you currently have a primary residence?
How much equity?
Do you need to sell that to purchase the next, or are you going to rent it?
What are the logistics that you are trying to maneuver?
Mike

I have several houses with 30yr fixed mortgages, one that used to be my primary but is now a rental. We rent the house that we live in. We wouldn’t need to sell anything and there can be months of overlap between our lease ending and moving into a new primary, logistics are flexible. I have about 1.5m in total equity 

Any MLOs out there that would be interested in working with me in Colorado? My income is difficult for an underwriter to understand. It's inconsistent and consists of various types of income (ie. LTCG, STCG, rent income, a little Sch. C and some W-2 for some years but not current).

Happy to share details if someone feels they can help. Thanks

Quote from @Travis Biziorek:

I'll chime in as someone living in CA but investing in Detroit.

We do deals in the $75k-$95k for a SFH today and rents are $1,100-$1,300/mo.

Yes, it works and can be lucrative. But you also really need to understand the market and how to operate in it. I lived in Metro Detroit from 2017-2022 and built my network while on the ground. Even being there, I made plenty of costly mistakes.

My best advice is to work with someone local and/or a team. Or, if you have tons of time, you can build your team yourself. But it's a long road going that way.

Thanks for in insight!

Hello, 

I'm an experienced investor that took a hiatus for the last couple of years. I'm looking to jump back in but need to explore new strategies and may be out of touch with the market. I live in Colorado, very few deals make sense here, out-side of maybe a very long-term strategy, so I'm looking to different markets.. I've invested out of state, but not much. Just want to get your take if you invest in an area with $100,000 houses that rent for maybe $1,200-$1,400. Are those areas out there and can they be lucrative? Oklahoma, specifically Tulsa seems like it may have some merit.

Quote from @Travis Biziorek:

Quote from @Duarte Marques:

Quote from @Travis Biziorek:

These numbers don't seem to add up. What market is this?

$100k for $2,400/mo gross rents... it's just not likely to happen.

 It would be a section 8 rental, the fair market rent for section 8 (hud gov site 2024) on that zone is 1200 for a 2 bedroom, since it's a duplex it has two units with 2 bdr so the total rent would be 2400 (both section 8 tenants). The duplex you can buy around 100k-150k turnkey. 

Oh, I understand all of that. Crystal clear. I own 14 doors in Detroit and 3 are S8. 

But you didn’t answer my question. 

What market is it?

Also, FMR’s do not mean that’s what you’ll get. Lots of people thinking this is a guarantee. It’s not. 

It seems like Section 8 "influencers" are really taking hold on social media lately. They make it seem like there is an FMR arbitrage strategy available. For anyone looking to do section 8, know that you should buy based on market rent, not FMR. Thanks for pointing this out to everyone.

Quote from @Adam R.:

With the increase in interest rates, looming recession, and drop in asset values generally, at what are the cap rates that folks are you purchasing? Is 10% still the magic number or are folks willing to buy at a lower cap rate (or higher rate)?     

 In my opinion, ignore cap rates, they're not all that relevant. A low cap rate might have enough upside with a new operator, a high cap rate is probably an embellishment by the listing agent or owner. I'd say maybe 10% of brokers know how to calculate a cap rate for a MHP, so most of what you see isn't even accurate. 

It's purely an indication of past performance, or a wildly optimistic pro-forma. Debt is getting more complicated and loan products more obscure. Figure out what the performance would be under your ownership and your leverage structure and if it can give you your desired return. Rent roll, Taxes, insurance, replacement cost, existing lease terms and assets included in the sale (mobile homes) and location are the things to pay attention to.

Quote from @Bradley Cladianos:

It has been a while since Mobile Home Parks were at a 10 cap. I see most Mobile home parks range between a 5-7 cap. I would be happy with an 8 that had vacant homes. 

Are you willing to buy outside of your area?

@Jeff Bridges

I would recommend you do not move forward with this with the intent to infill. The scope of the work you mentioned is absurdly expensive these days and used mobile homes are scarce. The moving and setting back up is also expense. Additionally with the shaky population stats you mentioned, it's also a huge risk for a low upside. I feel like you can find something better. On the flip side, maybe it's a decent investment at such a low price with good seller carry terms just leaving it as is. I'm a mobile home park owner in WY and I did a small amount of infill. It takes ALOT of capital. 

I'd say the right option depends on your market. Primarily, what local codes will allow you to bring in. Most common is 1976 or newer, but there are a lot of municipalities that are much more harsh. I can't speak to your market, but where my MHP is located (Casper, WY), it was insanely easy to sell a fixed up mobile home. There is a massive shortage of quality labor, therefore the town is full of run down rentals and any affordable product that meets the standards of being clean and safe is in huge demand. My strategy was make the lot rent+CFD payment equal about what market rent would be. FB marketplace was the most productive. As far as finding mobile homes to bring in, I'd bird-dog craigslist, FB market place and call some of the larger parks in your area to see if they have anything for sale. Keep in mind, infill is very expense these days. If you can't sell your MH's for a minimum of $25,000, and buy around $10,000 it's difficult to break even. However, if your main goal is occupancy, it may be ok to lose some money on the sale. I also know an operator that had luck with paying the moving and set up costs (about $7,000 in my market) for people to bring their MH's to his park.I hope this helps.