Market Research Data


#1

Websites-Historical and Financial Data

I have been asked how to go about interpreting historical and financial data and how it pertains to real estate investing. First I want to say that I approach everything the simplest way and I am not an economist or a statistician. Also remember real estate investing is a regional or localized venture. One shoe doesn


#2

Rick,

Population will continue upward. Real incomes along with the rest of that list? Right now it doesn’t look good. My dilemma is figuring out if I press forward, thinking we will go through some tough times and come out on the other side. The one bright spot is that several multi-family apartment complexes have gone up around the Knoxville area and have filled up quickly in the last 18 months. There is nothing like that in our area about 20 minutes outside of Knoxville. Financing is still a problem, but if you provide the roof and let them lease/option it or rent it, they’ll do it.

At the end of the day, I know what I don’t want to do and I know getting through the tough times and surviving to the other side can be half the battle. So, I’ll likely press forward and work to bring this mobile home park to fruition; fight the uphill battle as best I can and see some light at the end of the tunnel.

Mike


#3

Mike

More questions to ask.

At the end of the day when you have all this money invested will the property / lots / homes appraise? Do you have any idea how much money you will have tied up before you start seeing positive cash flow? You are young and you do have time to wait, but at what cost. Did you buy your property at the peak of the market maybe 2006 / 2007? Has the property lost value already? I can see and feel the corner you are in. I have been there. You can sit and do nothing and go under for sure (as you said) or you can do something and hopefully succeed. Action would be my choice also.

Go for it and best of luck to you. Keep us posted so we can all learn.

Rick


#4

Rick,

The one good thing about this is, when I was building and selling $300,000+ homes in Knoxville, I kept thinking “this can’t last”. So, we went “out” and bought this property for $450,000 ($17,300/acre), which even today is pretty good. At that time, in Knoxville, this acreage would have ran about $1.2 or $1.3. I think a price of $380,000 to $400,000 would be the best you could do today in the area we bought, while Knoxville is now down to $20-$25K per acre. So, we didn’t necessarily overpay for the property. However, I think we did overpay by about $100,000 for the excavation cost. They have since gone under and we are stuck fixing a few things they should have taken care of. Also, our engineer and everyone involved told us “$1,000 per lot for your underground. It’s been that for 5 years…bank on it.” Well, instead of $60,000 we spent $170,000. Local utility decided to use us as their new policy of we pay for everything, labor, material, installation, etc. and when someone hooks up “bingo” they profit from day one. Typically those costs are shared and the utility gets paid long term. So, we’re probably in this about $200,000 more than we should be, which at 100 MH lots, with everthing set up and ready to go we should have right under $1.5 total in it, or $15,000 per lot.

I’m still working to see if this is a reasonable lot cost for new MHP’s. I’ve never seen an appraisal on one, so I’m not sure how they value them. PV or Future Cash Flows at % occupancy or similar properties with PV of purchase price? Hell, it seems most appraisers right now just want to put a very small number and go hide so nobody can question them!

Mike


#5

Mike,

Read Steve Case’s post “Dead or Alive”.

Then call Steve Case at (858) 964-0870 , and ask if you may attend the GMHA Symposium in Macon (?) Georgia, next week.

I expect, that you will learn many an answer and more for the questions you have, including some you have not considered yet. The networking possibilities at such an event are worth much more than any costs you might incur.

The location is a bit far for me to drive at this time of the year.

Go !

All the best to you,


#6

Bernd,

Thanks for the information. I contacted Steve and am heading out this afternoon to GA. I can’t wait to hear the program and gather more information about this project.

Mike