Posted by Bill Gatten on November 12, 1998 at 17:26:40:
Phew!
Buy a piece of land to put it on. Put the land in a land trust (the mh becomes an appurtenance): then do everything else I’ve mentioned (3rd party trustee, co-beneficiary, collection company, etc. etc.).
Bill
need advise - Posted by R. Sullivan
Posted by R. Sullivan on November 11, 1998 at 23:48:08:
Started reading CREO a couple of months ago, I recently aquired
5 acres of property w/ 4 Rental houses. through an owner finance
deal. I am in the remodeling business , and have been keeping
the property up for the previous owner. I bought the property
for $75000 with 1000.00 down pymt. 13 years at 7.5 %. which equals
$744.00 per month. All the houses are rented out , bringing in
$ 1350.00 per month. This gives me a cash flow of about $600.00
per month less repairs, in which I do myself. I have enough property to build at least 4 - more rental units , without getting
to crowded. I have gotten the realestate fever. My Question is am
I going about it the wrong way? Should I build more units or should
I Look for more Deals? By the way the $1000 dollars down was
was in exchange for remodeling work. So all I have in this is just
time. I need Expert advise, Thanks
And one other thought . . . - Posted by hk CA
Posted by hk CA on November 13, 1998 at 12:03:01:
Here is one other possibility to consider. Since building new homes on the lots would take a lot of time away from searching for other RE deals, try contacting a house mover in your area (if there is one) and see if they know of any homes coming up that need to be moved. Sometimes movers even have an inventory of homes that have been taken off of lots and are sitting on I-beams waiting for the right lot. The mover does most of the work.
Re: need advise - Posted by Bill Gatten
Posted by Bill Gatten on November 12, 1998 at 17:20:58:
As several of the folks here on King CREOL have figured out, I am pretty much a one-horse jockey. I eat, sleep, drink and live land trusts (had two for breakfast this morning).
Just as an alternative idea and a point of interest–think about building the other four units out (or not) and putting the whole group into a title holding land trust. To enhance your income and eliminate costs, you can then sell, say, a 10% beneficiary interest to up to eight individuals or couples looking for the benefits of homeownership (or to four people at 20% each, if you don?t build the other four units). In either event, you keep all of your existing equity and 20% of the future profits and loan principal reduction for yourself (kind’a like an LP).
Now… if each acquisition (of bene. int.) is then tied to a triple net lese arrangement with your trustee, each of the “resident beneficiaries” will have essentially bought a home, replete with all the tax write-off, principal reduction, appreciation, etc. WITHOUT your needing to subdivide or refinance; and without the “buyers” needing to finance, or make any more down payment than you would require.
Furthermore, resident beneficiaries in land trusts pay a LOT more per month than do renters: and they remain fully responsible for 100% of all management, maintenance, repair, upkeep, upkeep, property tax, insurance, etc. You therefore have no management or maintenance duties or costs (unless you want to, and charge extra for them).
Legally speaking, in this kind of arrangement great care must be taken so as not to trigger an IRS characterization as a partnership, corporation or an association (which would be taxed as a corporation). As long as the number of beneficiaries is less than ten, you need not be concerned about Securities and Exchange issues (and an REIT takes 99 or more).
We recently helped a local dentist do this with a ten-unit apartment building here in Ca., which was on the verge of driving him crazy and into bankruptcy. He put four units into the hands of beneficiaries and is still renting out another six.
(Although… I do like Bud B’s idea second best… less esoteric - I also don’t cotton to being a landlord)
Bill
My approach - Posted by Bud Branstetter
Posted by Bud Branstetter on November 12, 1998 at 12:33:41:
Given I don’t want to be a landlord doesn’t mean you don’t like it. But usually an owner will may more of a monthly payment than a renter will. An owner finance deal will sell for more than cash. What I would look into is subdividing those existing houses and future lots. I would connect with some small builders to develop those lots so the land becomes more valuable.
I would spend my time looking for the next oportunity rather than being a landlord or builder.
Re: need advise - Posted by Irwin
Posted by Irwin on November 12, 1998 at 06:56:04:
Sounds like you made a pretty good deal for yourself. The 13 year contract will build equity quickly and give you a good base to leverage it in the near future. If you can find more deals like that, grab 'em. I doubt that you can build new houses and get the kind of return you’re getting on these, or anything close. I’d look for more deals like the one you got.
Re: need advise - Posted by Rick Sullivan
Posted by Rick Sullivan on November 12, 1998 at 14:08:36:
Thanks for your advise. Laure & Irvin.
Here is another Problem. My sister purchased a doublewide mh 1 year ago. purchase price $42000 she paid 10000 down.
Then she bought 1 acre of land and installed septic sys and
electrical , another $10000 in improvements.Now she has remarried and moved. What would be the solution for her
to regain her $20000 ,and to sell the trailer w/pay off of $32000.Is there a way to take this and turn a profit or is my
sister going to have to get what she can ???
Re: need advise - Posted by Laure
Posted by Laure on November 12, 1998 at 07:20:56:
I agree… don’t dump your money into new construction. Either sell it for a large profit now or keep it to build equity. I have been a keep and hold kind of person. You equity will grow like you can’t believe it ! I think you should put your money into other property and wait to sell this to someone who want to build there. I personally think building it sooooo risky ! Just because I haven’t done it… probably.
Good Luck ! And congrats !
Laure 