MHP #730: Mastering the Due Diligence Process
Real Estate Investing for Cash Flow with Kevin Bupp
Kevin Bupp
4.9 • 675 Ratings
🗓️ 17 April 2024
⏱️ 60 minutes
🧾️ Download transcript
Summary
Today's episode is from Mobile Home Park #109 that originally aired on March 26, 2019.
Host Kevin Bupp is joined by Jethro van Aardt, the Director of Operations at Sunrise Capital Investors, and they break down the many moving parts and processes of due diligence--from kick off to title transfer.
Due diligence is one of the most critical aspects to master when diving into the niche of mobile home park investing. It has its own unique set of nuances and to be aware of, as well as opportunities and usual skeletons in the closet to watch out for.
Quotes:
"Due diligence process, it's a pretty thorough process and a lot of sellers often get intimidated by it. They're worried that you're going to uncover something and it's going to completely throw the deal out so they get kind of secretive, which is pretty strange. It's counter-intuitive."
"The offsite phase is critical. We need to know that we have the exact information. For example, simple things like the exact address of the property, the exact pad count, how many homes are abandoned, how many homes are resident-owned, how many homes are rented by tenants, etc etc. So it's verifying a lot of information."
"DD is really just a long checklist and it's following that checklist and obviously you start off with the most critical things and, if you can get through those critical things from the top to the bottom, then you reassess and understand do you move forward or not."
"Sometimes these places look really nice from the outside. When you get inside, they're in really bad shape. You need to understand the quality of the resident base. If anybody is prepared to live on the floors, you know that person's not paying the rent and they're probably going to skip the town in the middle of the night."
"Unfortunately that's one of the painful things sometimes is that you can do all that prep work and offsite, think that you've covered everything but there's still going to be skeletons and that's why the onsite is so crucial."
Discussed in this Episode:
- 09:25 Kickoff call process and offsite due diligence
- 19:55 Onsite due diligence and prelim investment committee phase
- 38:13 Closing and pre-take on
- 43:32 Software used by Sunrise Capital Investors
- 46:54 Usual skeletons in the closet
☑️ Recommended Resources:
Check out our company and our investment opportunity by visiting www.SunriseCapitalInvestors.com
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Accredited Investors Click Here: https://sunrisecapitalinvestors.com/ to learn more about partnering with me and my team on Mobile Home Park deals!
Grab a free copy of my latest book “The 21 Biggest Mistakes Investors Make When Purchasing their First Mobile Home Park...and how to avoid them MobileHomeParkAcademy.com
Schedule your free 30 minute "no obligation" call directly with Kevin by clicking this link https://www.timetrade.com/book/KV2D2
Transcript
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| 0:00.0 | Hey guys, Kevin Bup here. Just wanted to make a quick announcement about our Wednesday Mobile Home Park show that you're about to listen to. |
| 0:06.4 | These Wednesday episodes are in collaboration with my other podcast, the Mobile Home Park Investing Podcast, many of which were recorded a few years ago. |
| 0:14.1 | I've carefully hand-selected only material that I feel is still relevant today, but there's a chance you might find references that could be outdated |
| 0:20.9 | at present, such as website URLs. Thanks for tuning in, and now on to the show. |
| 0:27.2 | Welcome to this week's Mobile Home Park Investing Podcast that will teach you how to successfully |
| 0:32.1 | invest in and build steady streams of passive income from the highly lucrative niche of mobile home parks. |
| 0:38.8 | With decades of experience, |
| 0:40.5 | Kevin Bup will personally share with you |
| 0:42.3 | the valuable lessons he's learned along his journey |
| 0:45.0 | so that you too can learn how to generate cash flow |
| 0:48.0 | and build legacy wealth for you and your family. |
| 0:51.1 | Now, without further ado, |
| 0:53.0 | let's welcome your host for today's show, Kevin |
| 0:56.0 | Bob. I'm your host Kevin Bob, and in today's show, we're going to be diving into the all-important |
| 1:01.0 | topic of due diligence. And to head this up, we're going to be joined by Jethro Van Art, who serves as |
| 1:06.6 | the director of operations here at Sunrise Capital Investors. Now, I'll tell you that due diligence |
| 1:11.6 | is one of those areas that it can either make you or break you as a real estate investor. |
| 1:16.5 | It's by far one of the most critical aspects that one needs to master when diving into |
| 1:21.4 | this niche of mobile home park or any real estate of that type. Each and every mobile home park |
| 1:26.2 | that you encounter, it's going to have |
| 1:28.0 | its own set of unique nuances and it's going to be your responsibility to put on your inspector |
| 1:32.8 | gadget hat and really identify where both the opportunities lie, but in addition to the opportunities, |
... |
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