I have low deal flow because I’m not trying to poke bubbles in what seems to be a frothy market. I also have my hands full with current operations. I’m planning to hire an assistant to follow up on specific markets with research to figure out what’s a good deal and what’s not.
If you’ve busted your hump and found a great deal (or a list of potential deals) but need a capital partner with a proven track record and management infrastructure, and you want to be involved with management, please contact me. My first question is going to be, what proves there is demand at “stated” certain market rate in that area… Demand cures a lot of ills. Second question is about deferred maintenance – how close to “rebuild” necessary for various i.e. roads water sewer electric? Third question: what’s the price per occupied lot?
Re good deals, I’ve been wanting to say this for a while, so I’ll say it.
Roughly 50% expense ratio is more likely than 30%, in my experience. When “real-life” expenses are factored in. Perhaps some markets support rents that are higher and of course the gross flows to the bottom line, but generally you can model all you want and in the end your gross is what it is… And your expenses are typically fixed, or even greater the lower the occupancy because you have to deal with abandons and downdraft momentum. Good pricing needs to leave enough meat on the bone to make it worth bringing some management skills to the deal. Management takes time, aggro, and $$$. It’s not a money tree. Edit: paying 15% of your gross in payroll does not seem out of line. Taxes 10% Utilities 10% Payroll 15% (plus a few percent here and there) R&M ??? and Landscaping (2%) and Insurance (2%) and Overhead 1% you get to 40% expense ratio pretty quickly!
email address is bschwartz followed by the “at” symbol then sandelldev and then the usual com.