4 Real Estate Deals I’m Analyzing—What You Can Learn from My Approach | Ep 39

James: Welcome to the Furlo Capital Real Estate Podcast, where we dive into the intricacies of passive real estate investing. And our mission is to equip people to invest wisely in both properties and residents so that together we can build wealth while improving housing. My name is James and this is my wife, Jessi.

Jessi: Hey, you know, I was thinking about something that you often tell me this week. I was thinking about it this week, but this happened a little bit ago. You always say something, something to the effect of like, If you have an issue, you should go to an expert. Like it's, it's gonna turn out better. You may pay a little bit more, but they gonna have, they're gonna have the proper tools and expertise.

They're gonna know how to do things, right? Yeah. Well, I, so I tried to adjust a ring, like, who does that? Oh, I don't, you know, it just like, like a, like a

James: ringy? Yeah, like a, like

Jessi: jewelry, you know, jewelry ring. Yeah. I was like, ah, it a little tight. I, I just wanna adjust it. I totally demolished the thing. I'm like, you know, I used like tools in our garage, which of course I'm like,

James: this is

Jessi: so dumb.

And it was after the fact that I was like, Oh, this is why, this is why you call an expert, a jeweler. To do jewelry.

James: Yes.

Jessi: And I feel like that's quite applicable to real estate. That's not what we're talking about, but you tell me that all the time.

James: No, it's true. Yeah. I think that's a good observation. Cause now it's going to cost you more, huh?

Yeah. It

Jessi: is definitely going to cost me more to now fix it, not just adjust it.

James: Yeah. Yeah. Well, it happens. I, yeah, it's a thing

Jessi: we often tell our kids to like, be willing to fail because you will learn valuable lessons. I'm like,

James: yes, there you go. So you were, you learned a lot. I did learn a lot. So that's a good thing.

Jessi: Still learning it. Yeah. Yeah.

James: No, it's all good. It's all good. Speaking of learning, I have been learning about four different properties. Ooh.

Jessi: Yeah.

James: And what I want to do is take you through all four of them semi briefly and just to give you an idea for these are the kinds of deals that we're looking at and this is how we're thinking about it because eventually these guys will close and we're going to come looking for funding to help us actually execute on this plan.

Jessi: Makes sense.

James: So I'm going to keep these. Again, relatively high level. It's not necessarily a deep dive and I'm going to attempt to keep us on time. So no specific numbers. Just, I mean, no, I got, Oh, I got numbers. Yeah, yeah, yeah. But generality

Jessi: is okay.

James: Yeah. Normally I dive into like the. We'll see. This may be an hour long podcast and we'll break it up into two parts,

Jessi: but,

James: But we'll see.

All right. So this first one, I am nicknaming the haunted house. Yeah. So we got a call about this place. I know it's it's on 1. 43 acres, which is interesting. There's a house. There's another building, there's a really big shed, there's a garage, and again there's all this land, and it's next to a river, next to a road pretty cool.

The guy who owns it, owns it free and clear. But this is a house that, oh I gotta get my timing right, I can't remember now, it was like 40 or 50 years ago, there was a house fire in the main house. And because it's like, there's a lot of bedrooms. It's like one of those like four bedroom, pretty big house types of places.

And they did not fix it. They, most of the house is still

Jessi: burned. So they didn't repair like any. Of the fire. Is it like safe to live in

James: someone's living in it right now? Well,

Jessi: okay.

James: And whether or not it's

Jessi: safe there in it, when I looked in it,

James: I don't think I would have our family living in it.

Jessi: Interesting.

James: So that kind of, and

Jessi: the

James: reason why I say it's haunted is because there's a bunch of sculptures and stuff that are in the yard. Like that's what they do. They make like bird baths and seats and interesting. So they just have like, Hundreds of them in the yard. And yeah, it gives it off. It's got that on it.

So it's just like old, old school house that's not taken care of with these sculpture stuff in the front yard.

Jessi: All right.

James: And

Jessi: yes, you're painting me a very good picture.

James: Yeah. So it's kind of got a haunted house feel to it. It's very interesting. It's one of the few prizes houses that I didn't take a tour of it.

Because you just

Jessi: made an offer. The

James: plan is to demolish it and start over. Right. Cause there's fire

Jessi: damage that hasn't, I mean,

James: maybe, but it's not worth it. Like you can see the entire building is, is falling over as well. Cause like all the doors, there's gaps on one side and not on the other and things like that.

And, and on that other little house, I did get the peek inside of that one. And it's just like drywalls falling everywhere and it's just gross. And yeah just a problem. I imagine there's some leaks and things. Yeah. So it's on 1. 43 acres of land, which is interesting because you could build a lot there.

Like you could build a lot of units on there and that's actually what I was looking at as a development project. It is zoned multifamily, lots of stuff, but here's the interesting thing about this. The deeper we got into the research of it, you could just build a big apartment building, like. Geez. I don't know the size of apartment building that you're going for.

There's enough space here where you could easily do 30, maybe even 40 units on it.

Jessi: That's

James: But we wouldn't because the problem right now is in this current lending environment, getting development loans is extremely hard to do. So the actual plan would be to parcel it off into two chunks and then build four.

Two fourplexes. Okay. So eight units total. That's a lot fewer units. I know, but they would be bigger. But more importantly, because they're all four units, they fall under the residential development thing and you can get lending on it. And they're easier to sell because you just have a lot more people who are looking for fourplexes than you would have looking for fourplexes.

That makes sense. That makes

Jessi: sense.

James: Yeah. Yeah. And the only, the other tricky part about this is that it is up against a river. And so the setbacks are really big

Jessi: when it

James: comes to the river. So we can really only build on half of the property. And so that's another, by doing, Oh the other one is super interesting.

If you get above four units, you have to have two parking spots per unit.

Jessi: Oh, I remember you saying that. If you're under

James: four, you only have to have one. So you can actually make the units bigger and have less parking. Which is so weird to me

Jessi: because it's like if you've got a bigger unit, you're going to have more people staying in it, but I guess not more cars maybe.

James: And we probably would have more parking spots because you just could do something like that. But, but yeah so here's what's so

Jessi: the takeaway, like one of the big takeaways though, is one of the types of properties you're potentially looking for is a teardown.

James: Correct. Yes. Yeah. A tear down and do development.

Either that or I parcel it up, make it shovel ready and then sell it as is to another developer. The plan for this one to make all the numbers work, I'd have to pick up this property in like the 150, 000 range. So interestingly, we know that the seller was basing what he thought the value was off of the off the assessor office.

They have like a, here's what we think your value is, which had it at 400,

Jessi: 000, which I

James: was like. But it had the land valued at 200 and it had the buildings valued at 200. So I'm like, well, the buildings have zero value to me. So we're going to lop that off right off the gate. And I would actually have to demolish these buildings.

So minus the demo cost. And so that's like 50, 000. That's where I get my 150, 000 offer price. So we met with the seller. And we're like, Hey, we're interested. Like we're moving forward. We actually, we went to a Denny's had breakfast, had Sampson with me. And it was funny, man. We were like, we're doing this breakfast.

It's like a, it's like a lunch breakfast. It was like one of those weird, like 10 30, which turns into 11 30. Like what are we eating here? I don't know. He ordered breakfast. I heard lunch and and we're talking and we're going, and he's just like sharing his life, like everything that's going on, like, Oh yeah, the super interesting.

I wonder what we're going to get down to talking about the property. We get like, I don't know, 55 minutes into this lunch. And I mean like either a, this is going to go a lot longer than I thought it was, which wouldn't be the first time or be like, ah, there's just. I don't know. And we're going and he goes, well, you know what?

I've been thinking about it. I don't think I'm going to sell it. I'm just gonna hold on to it. It's like, Oh, okay. So you just got a free breakfast out of this deal. Cool, man. Awesome. Thanks for wasting my time for an hour. No, it wasn't a waste of time. It was interesting hearing his story. And this is one of those things where it's like you get the initial no.

And so now we're in the follow up game and you just kind of like, Hey, how's it going? Just wanted to check in. How are things? Cause it's, cause it's kind of a weird situation where this guy owns it, but it's his son who's living there, kind of running this business. And the guy who owns it is also helping run the business.

So it's technically like, it's kind of a rental, kind of a commercial property. So no matter what he would have capital gains. And so the plan would actually be to 1031 it into a different property altogether. So a son could live there and keep doing his thing

Jessi: into this, but the new property. Yeah. Yeah.

James: And so we were coming up with all sorts of creative solutions for it. And ultimately just. We didn't even get to propose our offer. And so our, I think our plan with him is, cause I think there's going to be some sticker shock over. He thinks it's worth 400 and we're like, it's actually worth like one 50.

I think we're still going to say, Hey, we know you're not interested. We totally get it. Just FYI, this is kind of where we were landing for an offer. Just so you know. And then do the follow up game, because that's, that's how this stuff works, you know? And who knows? Two years from now, he might be like, yeah, you know what, I'm actually ready to sell.

So, so that's the first one. Oh, we are right on time. All right.

Jessi: Really?

James: Yeah.

Jessi: Oh. I thought you wanted to talk for like five minutes about each one? Yeah, yeah. Are we at five minutes?

James: Yeah.

Jessi: Oh.

James: Well, yeah. I mean, we had a little five minute. We said a lot. Had a little intro, and then I talked about it. We said a lot in those

Jessi: five minutes.

James: All right. The second one I want to talk about is a foreclosure.

Jessi: It's

James: up in Salem. Officially, this is a three bedroom, two bath property according to the Assessor's Office. How's it being used? Unofficially, there's some more. They did like an addition that I just, it's not recorded or something. I don't know.

So unofficially, unofficially, I think it's a three bedroom. four three or a five three.

Jessi: Huh.

James: There's an extra bathroom. I know I'm trying to picture there's a living room. I think a bedroom. I think it's a four three.

Jessi: So they put in extra bathrooms and rooms without permits.

James: I don't know. They might've, I, we never got that far to look into it to be honest, but it's

Jessi: a foreclosure.

This is

James: one, this property is on a hill. And so it is There are like seven different levels on this property. So normally like, but it's like, it's like skinny, but no, that's not the way it like, but it's like where you might have two levels and they've got four because there's like a bunch of half levels, half steps.

Interesting. Yeah. Level. It's super interesting. Like you go into the main house. you get into a hallway and then there's like a little half step down onto a little entry way and then you take some more stairs down into the living room But then if you want to go the bedrooms, you take like a half stair up into the bedrooms It's like a weird funky.

It's a it is a funky layout. It honestly it reminds me of something of a Of a cabin that you would rent in bed. All right. But it's in Salem. Yeah. And I'm like, man, cool property, wrong location. Yeah. That's what it is. This guy, he owes okay. How do I say this? He's got a mortgage that is 305,

Jessi: 000.

James: And he is in arrears because in foreclosure of 72, 000.

And so whatever that is three 77 is what he owes total on it. And so our plan would be to offer him somewhere in the neighborhood of 400, 000. So he'd get like 20 grand, 20 K back. That's pending a title report. My experience with people in foreclosure is that there's something else that they owe.

Interesting. So even though we'd be like, yeah, 20 K. Okay. Once this, once we discover whatever this other thing is, it's probably going to be closer to like five or 10K. It's just, it's been my, I have no proof, no thought, but it's been my experience that there's more that's there.

Jessi: So when you initially like, I mean, it's for this deal, but for all deals, when you initially talk with them, you don't have any, any kind of paperwork, you know, to show you're just having a conversation.

James: Usually what we have is the, the, it's the NOD, the nod, the notice of default. And so that's what we get, we have that from the bank that's saying, Hey, you owe us this much.

Jessi: Which tells you the, like the mortgage payments they missed.

James: It tells us their remaining balance and what it would take to reinstate the loan.

So how much, how far behind they are essentially. But it doesn't

Jessi: tell you if there's any other liens or anything like that. They don't care.

James: Yep. That's, that's the title report that tells you that. Okay. And the only way you're going to get that is to actually, I mean, typically the only way you get that is to actually get it in an escrow, get it on a contract, go down that route.

Yeah. Part of me doesn't want to know. Cause it's nice to know the surprises at the end cause, cause I can make promises like, yeah, we're going to offer you this, you're going to get this. And then, and then it's, after all that's been agreed upon, it comes back and go, whoa, you actually owe 10 grand in this other thing.

Didn't know about that. Bummer, huh? That's that kind of thing. And because they knew about it ahead of time, they might negotiate to be like, well, I actually want four 10 for this property.

Jessi: Right.

James: Something like that. If we assume some holding reserves of like 16, 000, look at the repairs. I think we could get away with doing 30, 000 worth of repairs on this place.

That'd be primarily painting some new flooring, a few fixes here and there. I think he owns a lot of stuff, so it's hard to tell. But that'd be the idea we would borrow from some private money lenders about 150, 000 and then we would pay assuming we hold it for six months interest of 9, 000 towards them and if we are able to sell it for 500, 000, which I think we would be able to do, our profit would be.

10 grand, which is not much at all. Borderline, not worth the effort for something like this. And so, but it's this weird balance of he owes a lot of money, unfortunately. And just the fees, like they just, they rack up and the 70, 000, if I'm thinking about this correctly, that's just what he owes the bank.

There could be potentially more fees on top, maybe. So.

Jessi: And so when you say that you would have You said like hard money.

James: Yeah. Private money, lenders. Private money.

Jessi: That's like what you would typically. Raise it from right? You're not talking about something different.

James: Correct. Yeah. Yeah. Well, so what we would do is we would take we would pay back We would catch him up on that mortgage and then buy the property subject to that still 300 So we would get three hundred five thousand from the existing mortgage raise another hundred fifty So we're 450 in it.

We'd have to pay out about getting like nine grand. So that takes us to 460 Plus you have closing costs plus the repairs of 30, 000 that gets you to 70. So like, that's how you can see it very quickly. It gets to like, Oh, like 10 grand. Is it? Yeah. There's things that we could do to goose that to be like maybe closer to 20, which would be ideal.

But yeah, it's just a weird, it's one of those weird, like, these are really big numbers. And you have that final number, you go, man, it's just a squeeze down at the end. So these are hard. That's a hard one where we're like, we're working through and like, okay, maybe there's a different strategy that we can use to try to buy this place.

And so I don't know, but, so we're working, we're working through that one right now. We don't have it under contract.

Jessi: Yeah.

James: Talking to the guy, trying to figure out what works best.

Jessi: It's kind of like a foreclosure is good, but you want a foreclosure that needs,

James: Well, no, ideally you have a foreclosure that has a little bit more equity in it. That's the, that's the issue.

Jessi: Interesting. Okay. That makes sense.

James: Yep. But his mortgage rate's awesome. It's like a four and a half percent.

Jessi: Yeah.

James: So there's that. Okay. We're doing good on time. We're a little behind, but that's okay.

All right. This next one is going to take all the time in the world. Okay. It is there's this couple, they are builders. They're actually Christians and their desire is to,

Jessi: House builders? When you say builders, I'm just like, what kind of builders?

James: Yeah. I, I initially thought like they were a construction company.

They're not. But they are trying, they are fixing places with an intent to rent them out. They want to do a development project. The guy has worked as, the husband has been a contractor for many years, but I don't think that's actually what their business is. Okay. So they're Christians with the goal of providing affordable housing.

So they got this one place, it's a fourplex and they have genuinely kept the rents pretty low. Like they are, they are very low, which is intriguing, but they only want to sell it to people who will play nice with those tenants who won't just kick them out and raise all the rents hard because like they have a heart for them, but we're also like, yeah, but the math doesn't work.

Right. So here's this one. It's yeah, it's a fourplex. They owe, they have a mortgage on it still, or a note for 210,

Jessi: 000.

James: They are behind by 39, 000.

Jessi: So it's another foreclosure.

James: It's another foreclosure. Yeah, sorry. Yeah. Another foreclosure. They have four properties we're going to talk about. The after repair value would be two 35.

Let me do the quick math for you. Their equity is negative 14,

Jessi: 000.

James: And if we were to, and I have no idea what the repairs would be on it. So if we were to make an offer, it would be at most 188, 000 minus repairs. Again. They owe 250, 000 on it. Now they have a private lender on it. Like it's an individual kind of guy.

So there is potentially a chance to do a short sale with it. Maybe, maybe, I don't know. Depends

Jessi: on what they're willing. And it is a.

James: Funky fourplex. Like it is not, it's unique, which in real estate is a four letter word. For sure. And I don't think this one's unique in a good way. Like that other one, that single family home, it's also unique, but it's also kind of like, Oh, all right, man, for the right family, this could be cool.

So that's their first one. It's the fourplex their second one. It's another, it's a house that's in Brownsville. They owe 300, 000 on it. They're in arrears. They're also in foreclosure on this one for 54, 000. So they owe 354, 000. An ARV for that one would be 429, 000. So there is 75, 000 worth of equity in there.

Jessi: But

James: here's the fun part. We asked them, well, what kind of repairs need to be done? And the husband was like 30, 000 and the wife was 70, 000. So we're like, that's a big difference. That's cool. So our offer on something like that would be like two 73, which again, they owe three 54 on it. And so it's another situation where I'm like, I don't like, we'd have to do a short sale.

Yeah. Good news is they have a loan with the same guy.

Jessi: Okay. So he's loaned on

James: both of those properties. So maybe there's some sort of negotiation there that can happen to try to save it. It's just not worth as much as they paid for it, unfortunately. But hey, good news is they have another property that's also in foreclosure.

This is their main house that they live in and they rent out rooms because again, they're trying to do affordable housing types of stuff. This one is probably the most interesting of them all. They owe 295, 000. They're in arrears, 50, 000. You can tell they all kind of were going up at the same amount of time.

They just got behind on everything about the same. And after repair value on this one will be 500, 000. So. They actually have equity of 155, 000 on it. I don't know what the repairs would be, if any who knows, but we can make an offer of 400, 000 minus the repairs. So this could actually work. They could actually walk away with some cash.

Same person is lending on that house,

Jessi: yeah,

James: so he's foreclosing on all three. Bad news is, they don't want to sell it, because it's their house. Yeah. Yeah. Well So the one that we are interested in

Jessi: They're not willing to sell.

James: At least that's what they've told us. And then, finally, they own a piece of land in Sweet Home.

And there's currently a rental on it, but the plan is they've started bulldozing the entire thing, and they're going to build units on there. And it was super interesting, because I started asking them more questions about that, because given our previous one, or given the very first one I talked to, right, the haunted house, I'm like, alright, I've thought about development, like, what do we got here?

Whoops. Dropped my piece of paper. And, and they're like they want to put quite a bit of units on there. And we're walking through and we're doing the math on it. And it's like, oh gosh, how many units was it? It was like 80 or 90. I don't know if it was quite 100. Big one. It was a lot. Yeah. I was like, holy cow.

And he's like, yeah, I'm going to do the work myself, type thing. I'm like, alright, cool. And but I started, and like, he was already doing work on it. And just, ah, just a bunch of red flags,

Were popping up. Like, for example, he was starting to clear trees and the city told him, look, stop doing that. And so I'm like, okay, so you don't quite have it all figured out with the city yet?

I asked him for some plans, he didn't really have them. I asked him, here's the big question. I was like, well, what's your construction budget? He's like, well, it's been a while since I've looked at it. I don't really know, but I'm thinking like a million dollars. I was like,

Jessi: a

James: million dollars? I don't, you and I, we're, we are passive investors in a 112 unit project.

Yeah. And that was. 12 million to do. And so

Jessi: I mean, I've, I told him, I was like, depending on the quality of the law, I told him, cause

James: he's like, this thing's going to be worth like 10 million once it's done. Like, yeah, you're probably right, but it's going to cost you 8 million to get there.

Jessi: Right. And I just

James: like, he just wasn't doing that math.

I'm like, Hmm. All right. A little concerning. He did tell us that at one point in time he had an offer on the land for a million dollars and. We're both like,

Jessi: why didn't you take that? And he's like, no, cause

James: it's going to be worth 10 million. He's like, why would I take a million dollars? Cause he owes 300 on it.

It's like, why would I take a million and let someone else do it? And then they like, he goes, it's practically ready. And then they just end up with all this money afterwards. I'm like, well, because you're in, get even with your

Jessi: foreclosures. Yeah.

James: And so I think, I think the plan with this one. Is we're going to come at them and say, look, we're interested in buying anything and everything at the end of the day for the right price.

And so we would say, you know, that four plex and that one in Brownsville, yeah, we're interested in making an offer, but it's got to be short sale and we're going to work with this other guy, this other lender to see if we can figure it out. But here's what we're going to buy it at. And we'll just work through them and say, these are the numbers.

Like you can lose it all and put it back on the market and see how it works. Take it over or just switch over to us, take the loss, move on.

Jessi: Okay.

James: I don't know what they're going to do about the primary house. Give me a, like a one sentence. What's a short sale? Oh when you buy it for what's, for less than what's owed on it.

Okay. If you owe 200, 000 and you buy it for 100, 000, somebody takes a bath and it's the bank.

Jessi: Or the lender, in this case. Right,

James: yeah, yeah, correct. Why

Jessi: would he do that?

James: Well, because maybe he doesn't have the infrastructure to manage the property, right? Like, okay, let's say for example. Let's look at this fourplex, right?

They owe, we'll do some rounding here, 250, 000

Jessi: for

James: it. Okay. If he has to foreclose, and then take over the property, and do the management, and resell it, at best, he'll make like 200, 000 on it. Just because there's all these other expenses and he may not even have, like, he may have to go find a property manager in the area.

He may not have that infrastructure. He may have to find a construction crew. He may have to pour more money into it to make it sellable.

Jessi: Like,

James: there's a bunch of things that he may have to do and ultimately, say, lose money. Or, he can give it to us for, let's just say 150. Which, yeah, he takes a 100, 000 loss, but he's like, writes it off as a loss, and he doesn't have to do any of the other stuff, and he's probably built that into his system of like, yeah, no, I, I lose money every once in a while, it happens.

So that's kind of the, the thought. But he may also be like, no, I'm, I'm gonna foreclose and go through the process. He may have all the systems in place. It's like, yeah, no, I got a guy who I call It might be

Jessi: better for him to foreclose. who does this, and

James: he's willing to pay me close to market value for it.

Maybe.

Jessi: Interesting. Yeah, I don't know. It's worth a conversation.

James: The, our true, like, the advice, so what, I think we're gonna come at them and say two things. Number one, yeah, we're interested, we'll buy all three, honestly. Here's an offer on all three. Think about it. And, I think what we'll say is what we'll tell them is, you know the piece of land, what you really should do is take that million dollar offer.

I know you've got a dream of providing a ton of affordable housing in the area. That's awesome. I don't think you're in a place right now where you can execute on this. What you're better off to do is sell the land, get your 700, 000 after all the other stuff that goes into it. You know, let's call it half a million.

I think what you should do is pay off your primary house, like be done with it and then choose one of the other two, either the four plaques or the place in Brownsville. I probably choose the four plex. I don't know. And I say, pay off one of those and then just give the other one back to them. Be like, we're done.

Like, just don't even, don't even try. You maybe have enough money left over where you can catch up on the note. And if you don't have payments for the other two, you're done. You should be able to maybe catch up on that one. And I think you do. I'll let go of the dream of the land. Cause that's, they're like, they're like, well, we want to keep our primary house cause it's awesome.

And we want to do the land cause it has all this upside. And I think what I want to tell them is I think it's going to cost you a whole lot more than, than you want to develop the land. And it's going to be a really long process. I don't think you're actually ready to do this. Unfortunately. It's hard cause they're also like, You know, they're like, well this is the vision that God gave us to go out and do this.

I'm like, yeah, I totally get that. I just dunno if now is the right time. 'cause you've got some other stuff going on. Hmm. So those are hard. Like we, that's a hard conversation. We talk about for like two hours about all that stuff. Hard conversations and we're kind like, well, we'll go back, we'll take a look and see what we think.

Hmm. But I think that's the advice that we're gonna give 'em is don't sell to us, just sell the land. Mm-Hmm. to that other person.

Jessi: Yeah.

James: And. Move on. Live to find another day. You know? Find another project. It'll be okay.

Jessi: Yeah. Hmm.

James: But, I don't know how willing they are to hear it, but I'm also like, man, it's not up to me.

I guess I just gotta let them hear it.

Jessi: And if they didn't decide to sell the land, would you then make an offer? That seems weird.

James: I don't know. It might be one of those weird things where if they're in foreclosure, and they say no to us, we may reach out to that lender. Like, hey, FYI, we heard about this, we talked to them, and they're not willing to sell to us.

If it comes to foreclosure and you're looking to just offload these things, we'd love the chat.

Jessi: Yeah.

James: Probably what we'd do and see what happens, right? Yeah. I don't know. All right. Last one that we're looking at. This is a mobile home.

Jessi: You have mentioned this one to me.

James: Yes. It's a two bedroom, two bath, 924 square foot mobile home.

It's in a park. Yep. It's a 55 and older community. And I think we're gonna buy it. Like, we've They've given us the thumbs up, but it's like, we're working through the park owners and there's just delays and whatever. And they didn't like our paperwork. So they're making their own like fine, whatever. I think that's what's happening.

I don't know. It needs some work. It needs about 20, 000 worth of repairs. I think there's about 10, 000 worth of holding costs. So that's 30, 000. I think it would sell for about 45, 000 when it's all fixed up. Okay. Maybe. So that's 15, 000 minus the sale price. Which, good news! Sale price is a dollar. So It's a

Jessi: pretty good margin.

That actually stands

James: a chance to be the most profitable of all of these deals. Why

Jessi: are they selling it for a dollar?

James: Because the park owners make money off of lot rent.

Jessi: Okay. Not off the sale of

James: Cause typically other people own the units. They just inherited this thing. So they're paying utilities and they're not getting paid the lot rent, which is 1, 100 a month.

And so they're willing to sell it to me today for a dollar. Let me fix it up, get all the profits from it. And then, and they get lot rent the entire time and they're happy. Now, it's kind of funny about this is they actually won't let me rent. They won't let me rent the lot from them because I'm not 55, but they will let me store it there.

So I, I can have a storage agreement, which happens to be the exact same amount.

Jessi: And

James: like, it would be an annual storage lease. They

Jessi: just don't want you moving in, having like

James: wild parties. I know. Well, there's got to be some sort of like, there's rules too about it. And so they have to create, it's a different thing through storing it for me.

Jessi: Interesting.

James: Yeah. Yeah.

Jessi: How often does that happen? That like parks inherit? Mobile homes.

James: I don't know. I'm still kind of, I'm new to that space. Interesting. It just kind of fell into my lap and, Yeah. I was like, alright, let's take a look at it. And so, Figure it out. It needs a new roof, it needs new flooring, could use some new paint, and new appliances.

And it's so small. We could do all that for like 20 grand. There's a couple other repairs that we need to happen, but it should be pretty quick. Alright. Yeah, so there you go. Those are again, the point of sharing that is to just real briefly be like, yeah, these are the kind of things that we're looking at.

These are some of the numbers. Here's some of the logic, and here's our plans moving forward. Just a real quick, like, yeah, these are the, I know if you're listening to this, You're going like, Oh, okay. Yeah. Am I interested in this kind of deal? Does that make sense? Does that logic that James is working through make sense?

Is, am I being appropriately risk adverse? Yeah. And things like that. So yeah, there you go. Cool. Those are my deals. I love getting the update on all the different things. I,

Jessi: it is helpful that you give them names because I can't keep track of it. I know. Yeah, yeah. Haunted house, dollar house. Like I can, I can wrap my head around that.

All right. I like

James: it. Oh, that's awesome. Cool. And if you enjoyed listening to this as well, we would absolutely love it. If you've left a rating or review it doesn't cost you anything to do so. So we greatly appreciate it. And if you would like to learn more about investing with us, you can at furlo.com. Again, thanks for listening and have a great day.