All Forum Posts by: Paul Moore

Hey everyone! I am really excited to discuss this less-than understood asset class and answer your questions! 

Hi @Fernando E.! Great post and you got some fabulous replies above. I am in my 3rd decade as a real estate investor and I have found that it is most prudent to invest in asset classes that have a lot of mom-and-pop sellers. Operators that don't have the time or resources, knowledge or desire to increase NOI, improve operations and increase the value. They don't need to in many cases, this last decade? Acquiring self storage (like @Scott Krone said above), mobile home parks, RV parks, and other assets that are seriously undervalued should allow many of us to thrive while this market turns down for the next 1-3 years, if it does. 

This is really just the Warren Buffett value investing thesis. Find significantly undervalued deals and improve them to perform well in any economy. I also like a longer hold which allows you to pick up more recession-based revenue increases over time while the cap rates and interest rates fluctuate against and for you. Good luck and happy investing! 

Hi @Danielle Shipp! Hope that was helpful what @Mark Doppe replied. He was correct in saying this. Of course if you put a lien on a property when you are lending money to the investor, then you are in first lien position for that property. Debt and equity don't work exactly the same. Happy investing!

Hi @Jon R.! I can't tell you what you should do but I can tell you my story. 

I flipped single family homes, built homes, flipped waterfront lots, and even did a small subdivision starting in my 30's and all through my 40's. At 48, I made the jump into larger commercial properties to expand my wealth. I am now 58. 

During my 40's (again this is only my experience), I made a lot of money and lost some money along the way. But in my case, I didn't create true wealth. True wealth is having assets that create cash flow and I did not have that, though I could have strung together dozens of single family homes. After doing large properties for about 3 years, I went through a commercial real estate coaching/mentoring program and I was able to jump into syndication. That included raising capital, doing large deals, and lots of other skills I didn't have before. 

Syndication, and later fund management, allowed me to leverage my skills and connect with hundreds of other investors to build something better than I ever could have done alone or with my small company. One benefit of going into commercial real estate, or at least larger properties, is the opportunity to syndicate. For that reason alone, I would absolutely recommend that you go the larger route. 

I've got a lot of video resources on BP about 7 paths to get into larger properties and I included that in my book on self storage. But you don't need to get into self storage to utilize those 7 paths. Good luck and happy investing! 

Hi @Jake Ferris! You got some great advice above. Though I am not a cost segregation practitioner, as a few people above are, I understand there are at least 3 levels of cost segregation studies. One is engineering-based study, which is most defensible and most expensive before the IRS. There is another type of study that is not as thorough or expensive. I've even heard there are do-it-yourself packages, but I would not do that. I've heard of residential owners with $100,000 rental homes who do the cheap studies and it is worth it according to them. Good luck and happy investing!

Hi @Masood Majeed! I am sorry to hear you were disappointed in whatever package you bought. It happens unfortunately. 

There are a lot of paths to get started in commercial/multifamily investing. These include buying a small deal and working your way up, being a capital raiser, being a deal finder, passively investing in a syndication and staying involved, and having a hands on coach and mentor. For a lot of people starting out, hiring a great paid coach/mentor is a wonderful path. 

I was investing in real estate for about 14 years before I hired a coach/mentor and that significantly accelerated my learning and progress, and allowed me to purchase more and larger deals. And raise capital. And do a lot of other things. Good luck and happy investing!

Hi @Greg R.! Well hats off to you my friend. You've kindled a wonderful fire here and a great conversation. For me it comes down to investing versus speculating. Let me step back before that even...in my mind, true wealth is having assets that generate cashflow. True wealth is not having a mansion, a yacht, or a fancy car, it's having cash-flowing assets. 

So investing is when your principal is generally safe and you have a chance to make a return. Speculating is when your principal is not at all safe and you have a chance to make a return. 

I don't think you have to make an absolute choice between cashflow and appreciation, and of course you didn't say that either. But given the choice, I would go for assets that produce reliable cashflow. Appreciation can come and go but it is more speculative in nature. 

I'm in the commercial real estate fund world. I recently read about a guy who owned a commercial building in Tennessee. The value was about $3 million 6 months ago. Then interest rates went up and cap rates expanded. He now believes he could get about $2.4 million for that same building. Does he care? No, not at all. Why? Because he is still getting the same cashflow as before and next his lease will allow him to raise the rent a little more. He has an asset that produces cashflow and he's not selling it. 

Now the problem for that same owner is if he has to refinance it in the short term. That's another discussion about the risk involved with taking on leverage, but beyond the scope of this post. Good luck and happy investing! 

@Sujit Koshy, you scared me for a moment. I am in my 3rd decade as a real estate investor and my worst ever investments were in mobile homes. 4 of them. 3 of them were nightmares that ended horribly. 

I read your headline first. 

Then I read your post and realized you were talking about mobile home PARKS. Mobile home parks are one of the best investments I have ever made. @Frank Rolfe above mentioned Mobile Home University and I recommend you go there to get education, training, find a community of like-minded investors. Another great option to help get started is a fairly recent book called The Mobile Home Park Manifesto by Glenn D. Esterson. 

Mobile home park investing has been investing for my investment firm and our investors. I wish you the best of luck as you start down this path. Good luck! 

Hi @Julie Berks! That's a great goal! It looks like it's been a year since you posted this and would love to hear about your progress. Since you posted, more or less, the SEC has come out with some new rules to allow people without the income and net worth qualifications to becomes an accredited investor. Here is a link to learn more:  Becoming an Accredited Investor. In summary, to do this, you would need to get your Series 65, 82 or 7 license. Once you have that license, you can go through a few steps to be an accredited investor. 

Another more obscure route is for you to go to work for a syndicator or fund that only takes accredited investors. Some key employees with companies like this are able to invest in their company's investments. Good luck and happy investing! 

Hi @Lindsay G.! Congratulations on your success so far! I'm in my 3rd decade as a real estate investor and I am pretty sure I know what I would do if I were in your shoes. 

While I'm still working a full time job, I would NOT start investing in active real estate on the side. I would not flip homes, I would not do short-term rentals, I would not do Air BnB. It sounds like you have a demanding job if I were to guess. I would not add to my hours and stress by doing something part time where you could lose money, time, health, etc. I would start by carefully investing this money in passive real estate syndications and funds. You are clearly accredited from what you said about your income. I would build up my passive income stream and over time, slow down, and potentially leave my job. Then, and ONLY then, would I consider leaving my job and diving into actively managing properties. Then you could do residential or commercial. Whatever you do at whatever point, I recommend diversifying safely across multiple operators, funds and asset classes. I hope that helps. Good luck and happy investing!