Billy Brown

Billy Brown

 

If your banker says it’s a no-go on your loan … You’ve still got options!

Real estate investors seek infinite returns using money to make money … but how do you get your hands on OPM?  (that’s short for “Other People’s Money”)

What do you do if your banker says no … And you don’t want to give away equity in your deal? 

That’s where Billy Brown comes in.

They can help you with both Bridge and Permanent lending solutions for your SFR portfolios, multi-family, self-storage, mobile homes, hospitality, retail, and office deals in most states in the U.S. … and have solutions for foreign investors as well! 

As a real estate investor himself, Billy Brown knows the importance of creative and reliable lending. 

Billy educates other realtor and investor groups throughout the country on how to become more profitable using the right lending tools and works hard to help investors like YOU make deals happen. 

Billy and his team underwrite in-house and outsources funding through its network of bank and non-bank lenders … to speed up your approval process.  

And when they deliver the funding request, it is completely packaged up with a credit memo … so there are few, if any, questions before the lender delivers OPM to your escrow. 

Loans available range from $200,000 and can go up to $50 million … so get started on the path to capital for your next deal. 

Whether you want a thorough financing and leverage check-up on your entire portfolio … or to cash out some equity to re-invest for more profits … or just want a peek into the possibilities for financing a current deal … 

Simply fill out the form below to get your financing questions answered … Billy and his team will reach out to discuss all the possibilities!

 


Billy Brown

Billy Brown

 

If your banker says it’s a no-go on your loan … You’ve still got options!

Real estate investors seek infinite returns using money to make money … but how do you get your hands on OPM?  (that’s short for “Other People’s Money”)

What do you do if your banker says no … And you don’t want to give away equity in your deal? 

That’s where Billy Brown comes in.

They can help you with both Bridge and Permanent lending solutions for your SFR portfolios, multi-family, self-storage, mobile homes, hospitality, retail, and office deals in most states in the U.S. … and have solutions for foreign investors as well! 

As a real estate investor himself, Billy Brown knows the importance of creative and reliable lending. 

Billy educates other realtor and investor groups throughout the country on how to become more profitable using the right lending tools and works hard to help investors like YOU make deals happen. 

Billy and his team underwrite in-house and outsources funding through its network of bank and non-bank lenders … to speed up your approval process.  

And when they deliver the funding request, it is completely packaged up with a credit memo … so there are few, if any, questions before the lender delivers OPM to your escrow. 

Loans available range from $200,000 and can go up to $50 million … so get started on the path to capital for your next deal. 

Whether you want a thorough financing and leverage check-up on your entire portfolio … or to cash out some equity to re-invest for more profits … or just want a peek into the possibilities for financing a current deal … 

Simply fill out the form below to get your financing questions answered … Billy and his team will reach out to discuss all the possibilities!

Housing horror … or hallelujah?

Regular readers know we follow the news pretty closely. Well, okay … we’re obsessive compulsive news junkies.  But for good reason!

The economy and underlying financial system (two VERY different things) form the environment all our money-making ventures exist in.

When the financial winds change, alert investors adjust their sails to put the wind at their back.

Today’s “booming” economy is creating asset price inflation … including stocks and real estate … depressing bond prices (which in turn, drive interest rates UP).

PLUS the Federal Reserve continues to tighten monetary policy by raising its target rate.

Unsurprisingly, as we discussed last time, mortgage rates are rising along with the 10-year Treasury … and this adds to downward pressure on rising real estate prices.

Mainstream headlines tell some of the story.  But we also watch trade publications for clues that don’t always make it to the mainstream.

So we opened up our news archive and scanned industry headlines for the last few months to see if there’s a discernible trend …

Worst home affordability in nearly 10 years – June 19, 2018

U.S. home prices appreciating at slowest pace in two-years – July 24, 2018

Foreclosure Starts Increase in 44 Percent of U.S. Markets in July 2018 – August 17, 2018

Home flipping returns drop to 4 nearly 4-year low  – September 4, 2018

Rent jumps cool in hot markets, but for how long? – September 11, 2018

Down payments rise with stiff competition for homes – September 20, 2018

Without digging into the weeds of each article (though they’re all interesting reads) …

… it seems like home prices have risen to a resistance point … slowing their upward trajectory … while marginal owners are getting pushed off the back of the bus.

Meanwhile, real estate “day traders” (flippers) are finding it harder to get in and out quickly because the rising-price gravy-train is tapering off.

Okay, let’s take a breath here and process …

If you’re buying real estate for short term passive equity growth, this is probably bad news.  The market isn’t just dumping generous portions of equity on to your balance sheet.

Also, if you’re in at the high end of hot markets, you may have to hold longer than you thought.  Hopefully, the cash flow is there to help you ride out this phase of the cycle.

Those who went into the high-end of hot markets with thin or negative cash flow … whether as an investor or a home-owner … could find themselves land-locked and bleeding for a while.  No fun.

We’d need to dig deeper, but these are often the source of increasing foreclosures.

BUT … if you’re in the middle price range of moderate priced markets, you may end up being the beneficiary of INCREASED demand …

… as folks from higher priced properties and markets, both as buyers and renters, crowd into your space.

Remember, when you’re at the top, there’s no one above you to move down in tough times to boost demand in a soft market.

That’s why we’re fans of middle markets … where there are people below you to move up in good times, and people above you to move down in bad times.

And when it comes to apartments, nearly all new builds add to the top of the market …. increasing competition and pushing down prices at that level.

But it’s not feasible to build new middle market inventory, so while it’s more competitive to buy those properties … there’s also good demand from renters once you have one.

Whether it’s rising mortgage rates, rising consumer interest rates, price inflation, or rising home prices …

… it seems the stars are aligned for strong demand for rental properties.

Just like the financial crisis, housing horror can be landlord hallelujah.

All that to say that the right properties in the right markets with the right financing, while harder to find, still make a lot of sense.

Just be SURE your underwriting is realistic … because right now, the market is saying the easy money gravy train is slowing down.

It’s also probably wise in any market, but especially now, to project growth ONLY on those things you can control (added value) … and not count on a rising tide to lift your boat.

And if you’ve got great properties with equity … and you want to keep them for the long haul … it might be a good time to look at liquefying some of that equity to keep as dry powder if prices soften.

With rising rates, you can probably lend out some of the proceeds on desirable properties for a high yield (first position with a good chunk of protective equity!) …

… or invest into high-yielding properties or pools (mobile homesresidential assisted living, etc.) where the income from only portion of your loan proceeds can cover the ENTIRE loan.

This lets you store the rest for picking up bargains when the falling tide flushes speculators who are out of position to make it to the next up cycle.

Bottom line is those who are great at managing cash flow will win.  Those who aren’t will get flushed.

Until next time … good investing!


More From The Real Estate Guys™…

The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training, and resources to help real estate investors succeed.


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Profitable Niches – Making Money with Mobile Homes

Low-hassle affordable housing + land banking + triple-net leases = what? There’s only one answer to this real estate investing equation, and that’s mobile home parks.

In the second episode in our Profitable Niches series, we venture into the land of mobile home park investing.

We chat with super syndicator Andrew Lanoie about why he ventured into this niche and what benefits investors can find in the mobile home space.

In this episode of The Real Estate Guys™ show you’ll hear from:

  • Your mobile host, Robert Helms
  • His unmovable co-host, Russell Gray
  • Experienced syndicator, Andrew Lanoie

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An expert investor in a unique space

Do we know what’s going on in the mobile home space? We’ve got some general knowledge … enough to form some hypotheses.

But to test our hypotheses, we turned to Andrew Lanoie, principal partner at Park Place Communities. He’s been in the mobile home space for the last five years.

Why mobile homes? Two reasons:

  1. Increasing demand for affordable housing in the marketplace.
  2. Adequate supply of mobile home properties for sale, often by owners suffering from lazy landlord syndrome … which means many properties also have a value-add opportunity.

These two reasons are the main factors Andrew has made a place for himself in the mobile home space.

He started out in single-family homes but realized things weren’t penciling out after several years in the space. Andrew then tried multi-family properties … same problem.

Prices were escalating while returns were decreasing. So, Andrew started looking at different asset classes, eventually arriving on mobile home parks.

Today, he looks for distressed assets where he can buy low and add value.

Are mobile homes actually “mobile”? Not really. Ninety percent of mobile homes stay in place for the entire life of the home. Most residents sell their homes and buy new ones instead of paying pricy moving fees.

Why are mobile homes in demand? This class of affordable housing offers a lot of square footage for each resident’s dollar.

Think about it … the standard double-wide mobile home is equivalent to a 3-bedroom, 2-bath apartment. For $500-600 a month, that’s a lot of bang for a renter’s buck.

Plus, residents don’t have to share walls.

Pros of mobile home investing, and where to step cautiously

There are many benefits for investors, too. For example, Andrew says one big difference between a multi-family property and a mobile home community is the expense ratio.

“The expense ratio is reduced in mobile home communities because you only have to deal with below-the-ground issues.” That’s because generally, residents own the mobile home they live in, while investors only own the ground beneath their feet.

Owners’ biggest costs will be infrastructure costs, like sewers, water systems, roads, and electrical setups. Another cost is the cost of vacancies, although buyers can bring that down by renovating and reselling non-performing homes.

One area for upside is rent increases, although investors should be very careful in this space. In the affordable housing sphere, “You cannot just gauge rents up,” says Andrew.

However, investors can make slow and steady rent increases … as long as they are making other improvements to increase the value of the property to residents.

How does tenant-landlord law work? In most cases, residents are paying a pad rent plus an additional lease amount if they don’t own the mobile home outright. If a mobile home owner can’t pay their pad rent, operators can essentially put a lien on the mobile home.

“It’s usually a 90-day process to get someone out,” notes Andrew. In many cases, operators can make a deal with residents before it gets to that point. But if necessary, it is relatively easy to expel a non-paying and uncommunicative tenant.

While there are many benefits to buying a mobile home community, Andrew recommends caution as an overarching strategy when purchasing. Deferred maintenance and other issues crop up often in older properties, so buyers should do thorough due diligence before buying.

Another thing to consider is the path of progress. Some mobile home properties increase in value as cities grow around them. “I wouldn’t plan on that as an exit strategy, though,” warns Andrew.

One tough aspect of mobile home investing is that commercial lenders are almost always unwilling to offer loans for this investment class when occupancy rates are low. Investors interested in distressed assets will have to find alternate financing sources.

One option? Syndication. This is the model Andrew uses to buy and operate mobile home investments. Keep reading to learn about his strategy!

A peek at Andrew Lanoie’s prolific syndication portfolio

With his team at Park Place Communities (PPC), Andrew has almost 1100 operating units in 15 communities spread throughout 8 different states.

“We get the most traction in the Midwest and Southeast,” says Andrew.

Many of his investments aren’t in major metros … but towns can’t be one-trick ponies, either. He’s looking for markets with multiple employers and diverse, stable populations.

An essential part of running this kind of operation is building a stellar team. Andrew has people on the ground in every state to search for and buy new properties.

Because this asset class is often difficult to operate and there isn’t a property management company that could fill all PPC’s needs in every state, Andrew and his team have built out their own management team.

They’ve also formed a construction company to renovate homes at new sites. For Andrew, renovations are the “low-hanging fruit” when adding value.

PPC also works with manufacturers when a lot needs new mobile homes … the cost of which investors can potentially recoup when they sell to residents. These homes do not need to be paid for with cash, but can be mortgaged, freeing up money for the investor.

Once the construction crew is done and units are in place, the marketing department takes over to find residents. Once residents are found, they’re sent to PPC’s lender, who looks for a history of on-time rent payments and an ability to pay the rent going forward.

One other essential relationship is with brokers. Andrew and his team have built great relationships with brokers, which allow them to access off-market deals and pocket listings.

Andrew’s operation has a TON of moving pieces … which allows the PPC team to leverage efficiencies for maximum return.

For the average mom-and-pop real estate investor, running an operation like Andrew’s is out of the question. That’s why PPC syndicates deals … so investors can access a high-cap-rate investment passively.

Another pro to this investment class? It grows slowly and steadily … even during downturns.

We asked Andrew what potential investors need to know. His number-one piece of advice is to do your due diligence before jumping into a deal.

Interested in learning more about investing in the mobile home space? Listen in to the show to get access to Andrew’s curated report on mobile home park investing. He’s compiled a detailed overview of why he and his team are bullish on affordable housing and mobile home communities … and why you should be too.

We encourage you to do your own research and learn more … and keep listening to the Profitable Niches series to step off the beaten path and learn more about other lucrative, but as-yet unexploited asset classes.


More From The Real Estate Guys™…

The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training and resources to help real estate investors succeed.