All Forum Posts by: Tim J.

Property

.12 acre lot in Barre City.  (odd shaped lot - reverse flag lot)  

Public sewer and water

Lot recently had a duplex on it. Duplex was torn down within past year. Ready for new building

Zoned R-12 - new building can be a duplex or SF main dwelling plus accessory dwelling.

Has a small 2 car garage on lot. (somewhat dilapidated)

Reason we are selling

My partners and I are involved in some other projects and not expecting to develop this for a while. Prefer to get cash out/free up time/cash for other things. 
(expanding a mobile home park)

Comments
Vacancy rates are incredibly low all over Vermont. Any time I post an ad for a mobile home or apartment unit I get insane amounts of responses.

Perfect for small mobile home/park home or build a tiny house at your shop, then trailer it and hook it up to power, sewer water. (this was going to be our short to medium-term plan - acquire a small mobile home or tiny home and hook it up and generate some cash flow while we waited to get plans, grants, loans for building a duplex)  


The building envelope is decent - as mentioned above it had a duplex on it before was torn down (a 4/2 or a 5/2 I think), but a normal length mobile home (50+ feet) will not meet setbacks.  Needs to be 48 feet or shorter.

Seller Financing

$9000 down, $30,500 balance amortized over 5 years ( or 30 year amortization with balloon in 2 years)
   - or -
0% down $50,000 amortized over 5 to 10 years

Comps:
We rent 2BR mobile homes for 1050 to 1300 per month in a town not far away (Randolph).  Barre is a more desirable place to be
Single bedroom mobile homes rent for at least $800

Don't get caught up in the trappings of a business - work on the actual business.

With that said, there are lots of platforms.  99 designs, upwork, fiverr

I saw that article too, and I am concerned about the class warfare that's being promoted by individuals, news outlets and political parties over the last few years.  Government interference in the market is never, ever a good thing. I cannot imagine the SCOTUS upholding something like this, but unfortunately too many politicians without an understanding of basic economics put in place knee-jerk policies and pander to the population demanding rent control or lower rents, etc.   For example, the city of Burlington VT recently created laws that effectively ban short term rentals.  This, in a city where tourism is a MAJOR contributor to the economy.

As for housing shortages and high costs - the solutions are simple - increase supply and get government regulation out of the free market. 

It's not rocket science - provide infrastructure, remove zoning regulations, remove rent regulation

I see this as an education problem.  Too many people believe that things like rent control "help the housing situation", when, in fact, they do just the opposite.

Milton Friedman famously would quote Assar Lindbeck, who stated:

“In many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing.”

It's an accurate statement.

Quote from @Luka Milicevic:

@John Robert Kinsella

I owned a building just like this back in 2018-2020. Just like what you described. 

I ended up making money on it when I sold it, but I would not do it again. It was not worth the stress. 

The police basically had a unit assigned to the building because of the amount of drugs going through there. I had roaches and bed bugs that I paid thousands upon thousands of dollars to get rid of and still struggled. I had a tenant die of an overdose in a unit. I had several good tenants move in, but they stayed for maybe a month or two before realizing they don't belong here. 

These types of properties are very, VERY management intensive and you need to have the right people in place. 

I can tell you now, you can turn around a property BUT you have to have the knowledge and the right people in place. Ken McElroy talks about how he turned a terrible, crime ridden property into a completely different place. 

The business that bought the apt complex I owned knew what they were doing. At the time I did not. 

Evict everyone and start from scratch. Renovate all the units. Clean up the property on the outside and make it look brand new. Put a gate around it that needs a passcode or keycard to access.

You need to have tons of reserves in place for something like this. Don't go in over leveraged. You will be investing a LOT of money into turning it around. You will be investing a LOT of time into getting it turned around.

The potential is there, but don't under estimate the amount of time, effort and dollars it's going to take. 

Listen to this advice. 

Quote from @Zane Cress:

I think you have a very good opportunity here to cash out of this house soon and 1031 that cash into a 4plex somewhere near where you live now that will definitely cash flow for you. 

Ignore my previous comment.  This is valid advice given he lives out of CA now

There are "professional" tenants across all populations - races, professions, income levels.  I, and many people, have made plenty of money while controlling risk in C neighborhoods.  

Owning property is not risk-free.

Your story is a good warning, reminder, but the advice is suspect.  I appreciate the frustration and desire to "help" people avoid problems, but none of what you describe would preclude me from buying real estate.  The long-term results are too great.

Considering entering Columbia SC market. Looking for SFH, duplex, quad, or bigger.
Can buy cash

thanks
Tim

@erik
you should fix your web page link...

I sent an email - a partner of mine may be able to do the loan.

Quote from @Jon Ful:

Quote from @Drew Sygit:

@Jon Ful upgrade your BP membership to Pro and use RentRedi for free.

 It's interesting Bigger Pockets doesn't advertise a Bigger Pockets Pro account coming with a free RentRedi account. That's definitely noteworthy thanks!

It might be because RentRedi is horrible software

I have a rental SFH with about 150k to 200k of equity in it.

I have already refi-ed it to the point that taking out any more money would make the rent/loan payments upside-down.

Last year I acquired with some partners a few multi-family properties.  I now much prefer those over Single family

I have been considering selling the house in order to acquire other properties with the resulting cash.
However, I would prefer to attempt to use some amount of the equity as a collateral for financing other properties.  
e.g. house value of 400k.  Existing loan 200k.  equity: 200k.  I, assume if some kind of portfolio lending is possible, that I would be able to tap into about half the equity left in that house - so approx 100k.

other assets I manage with partners include
- 6 family building  ($600k )
- 13 unit mobile home park  ($700k)
- 2 condo units work about 500k together
- 2 other SFH worth about 200k combined

total equity in all those is about 400k, with my share being about 100k to 150k - but I list those only to show lenders some level of competence in acquiring and managing properties - I prefer to "borrow against" the SFH mentioned, not the other shared portfolio properties.

My questions:
- Is this a reasonable possibility
- how do I go about setting this up - which lenders or key phrases do I need to google/use when contacting lenders?  Which lenders should I target?
- what else am I missing or not asking

Thanks