Sign Missouri Banking Letter Of Intent Online

Industry sign banking missouri letter of intent online

[Music] welcome to the real estate syndication show whether you are a seasoned investor or building a new real estate business this is the show for you whitney sewell talks to top experts in the business our goal is to help you master real estate syndication and now your host whitney sewell this is your daily real estate syndication show i'm your host whitney sewell today our guest is ferdinand thanks for being on the show ferd thanks whitney glad to be here ferd is a mobile home park lawyer owner operator investor podcaster mba ccim and broker also he focuses on solving complex real estate problems he is passionate about real estate and helping others for welcome to the show it's just interesting i know you and i were talking about this for the show but just you know branding yourself as that mobile home park lawyer it's just amazing it's a great idea you know you can focus in that niche be an expert and then people know who that expert is and so looking forward to learning more about you know yourself and less diving in you know diving into the mobile home parks and and how you're helping these other operators and how you've got to where you're at now but so give us a little more about about yourself and and your your practice and your mobile home park business yeah so i'm based here at kansas city so i um practice mobile home park operations in the midwest and then on the legal services i'm pretty much going nationwide i don't do litigation or evictions in court in other states but here pretty much touch a lot of operational consulting on retail license water consumer issues llc setups contracts leases title work title objections i'm a zoning in real estate aware by trade so i do a lot of zoning and permitting issues which is really important in the mhp space grant funding is very important in this asset class do some syndication work on the legal side do some syndication work on the operational side as well and then you know all your other kind of blocking and tackling contracts and real estate law and um and just kind of consulting on mhp so that's that's kind of the current practice um in my way of background i said i'm an attorney by trade i practiced law at a boutique uh real estate firm here in kansas city probably the best firm in the metro did zoning law tax incentives before that i was a county appraiser here in kansas city uh youngest in county history to do that and i had a 75 person team and eight million dollar operating budget and worked in government for five years went i pretty much had two jobs my whole life you know school i went to school for a decade but i was doing that all while working i went to law school while working full-time so it's just been uh the hustle but and today i got two jobs now owner operator and lawyer so um it's been a fun ride but look forward to doing more wow you know went to law school while working full-time i mean i can relate to that just two businesses or two jobs and uh working full-time while you know getting a business you know going and growing and all these things that's not easy but it shows uh you know it's your determination and and a willingness to to make it happen which i'm sure is so crucial to where you're where you're at now as well uh so let's let's dive into you know your niche especially which is mobile home parks uh especially from the the legal side uh and you mentioned a few things there like zoning and permits and grandfathering and even syndicating and let's talk about some of those things as as we relate specifically to mobile home parks and and issues that you know people you're working with are having in those those places sure i mean with an mhp it's very common for municipalities you know cities in particular to not like mobile parks there's a stigma you know they think of their trailer parks or worse and you know they think they're hotbeds for crime and poor people and and as a result they wouldn't want to get rid of them they'd much rather have a mobile part be torn up and become a home depot or a new apartment or a new hotel or mcmahon neighborhood so they're very hostile they put a lot of laws on the books many of which are unconstitutional the property rights are constitutional rights so there's really three types of mobile home park there's legal conforming which is rare because that means it's up to the current code and it was legally permissible at some point in the past those are mostly new development very little new development you've got the illegal park which is you know the guy somebody built it without permission and just the government's looking their way because the guy's you know friends with the mayor but you know the next guy if you or i buy it they're going to sting us and say oh you can't get rid of that you got to get rid of that you can't have even though it's been there for 50 years so you never want to buy illegal but so most of the mobile home parks fall in the middle which is the grandfather status which is legal meaning it was permissible at the time it was built but it's now non-conforming with the current code so a lot of what i do is try to get some of the restrictions limited as it pertains to setbacks inter internal and perimeter setbacks to basically allow for for better infill and without being classified as a new development redevelopment because the name of the game in mhp i mean depending on the type of asset you buy but if you're buying heavy infill or you know kind of a rehab method you got to bring in new homes and bring in new homes on old lots that are typically smaller and configured differently and cities put a lot of restrictions in place many of which are invalid so it's my job to read the code you know get smart on that city that state and negotiate hopefully you know in a you know cordial manner but sometimes just becomes abrasive and adversarial to city and you have to fight for your property rights so that's that's a really big issue and zoning's important in all real estate but in mhp it's probably the hardest to get zoned and then there's more hostility towards it than about any interaction class and would that be if you're building a new project or or you have one that's illegal like you talk about like you talked about that most of the zoning work i do is on existing projects where somebody wants to a new owner wants to uh one prove the permits value to prove they can bring in new homes and then kind of get a certificate of zoning but i i don't just ask the city they send me the zone because then they're gonna send you what it is you're like well no no i'm not going to accept that i i read the code i negotiate them i draft a zoning letter and say you know he or she you know whoever doesn't i need you to put this on your letterhead and sign it and then i can go to the title company and i get a zoning endorsement which is like another set of insurance like belt and suspenders so that if a different administrator the city comes in down the road and changes city position i've already got a backup plan as far as new development those are very rare it depends on this is going to be very location city specific i mean nationwide then there's forty four thousand parts there are less than two dozen constructed in a given year more i mean it's a dying it's it's going extinct i mean relative there's more being redeveloped and thrown away than already recreated or created from new so and it depends that becomes more of a some degree a blue state red state issue um but also practical i'm in the process of expanding two parts i have now so expanding is still hard but i'm able to do it one of them because it's it's in the county so it's outside city limits but when it gets outside into the county you often run into things like you know what no city water needs to be sewer which increases the development cost the risk etc so in a practical world there are very few people out there developing new mobile home parts i'd like to i've got a development background on retail so i understand the entitlement process and permitting process from that standpoint but it's really just finding a location in the city that to play ball and a market that has the right economics to make it make sense well speak to the due diligence process a little bit as far as you know if we're going to buy a park now uh one to make sure it's not illegal like you talked about uh but but two you know i'm sure we should be thinking about okay is there room to expand is it permanent for that you know you know what's our options there or you know we do have to move a park out can we move a new one in how do we ensure you know some of those things during the due diligence process so we know we're ready as soon as we close that's a good question i mean like all real estate there's kind of the big items that you just pretty much hire third-party professionals for like you've got to get a phase one environmental if the environmental engineer says dirty you know you kill the deal maybe there's a phase two or something that can fix it for the most part you get a phase one you get a survey ideally an altitude survey with some table a items obviously you need to make sure the deal is financially feasible so you run your marketing you learn economics you look at the market rents you look at your assumptions your property taxes all that stuff and you see the bank a bull you get an appraisal but from a those are kind of like third party reports from the due diligence on the buyer operator side you know i want to look at the first i want to save money at the beginning i'm not going to go spend money on those reports you're in you're in for 10 grand a minute when you're going to do that so before i spend all the money i get bids on that stuff right out of the gate but then in each grade area but right again i'm doing a test ad i'm putting an ad on craigslist craigslist facebook local newspaper here's the you know 800 a month three bed two bath 1216 square feet and then see up and see how many people bite on it and i'd get a feel for the market um obviously i look at the zoning with the city that's generally higher a lawyer for it um unless you're a cabinet area yourself make sure the zoning is good the permits good um you want to make sure that you check out the utilities i mean most most of the real estate if you're buying a hotel it's probably not on a septic right you're buying a mobile park it might be on a septic it might be on a lagoon it might be in a wastewater treatment plant you might have well water well all of those things are include more risk you have you need to get budgets for reserves you need to get professionals inspecting you need to camera the sewer lines there's i got about the 75 point checklist that i go through you know i'm referencing some of the big fatal issues but you also want to just you know make sure you look at it make sure you can bring homes in see if the city prohibits uh vicious dogs of some sort see if you can put you know for sale signs and banner signs out of the street um blah blah blah where do we find that information like where would we go to search you know those things with the city it depends on the municipality i mean a bigger city like i'm in kansas city they're going to have a full code you can typically go to their website and just type in unicode m-u-n-y or or citico sometimes they call it a uniform development code you can go to the planning website sometimes you know if you don't if you don't have to drill down on this stuff i would say just go to the city website or kind of a site and look for planning or development and find the planning administrators and call that number and say what are the restrictions what can i do and not do and then most cities are quasi-helpful or they'll at least point you to the right document the ones that are really helpful will send you the exact excerpts from the code yeah which you want to verify or at least you want to put it in their zoning letter that binds them in writing there's about 10 things i put in the zoning letter that someone mentioned here but um there's there's a lot of the you know research standpoint you can go you want to know the market area so like you know if i'm going to sometime joplin missouri you know i know where joplin is south kansas city by two two and a half hours i don't really know what the vacancy rate is in that town with the market rental apartments with the market rents are for lot rent for mobile homes so i can make i can look it up on google call those places in secret shop i can go to bestplaces.net or run a report from a scout or some other real estate source to give me some of that information look at the employment you know other due diligence you do typically you want to look at the you want to have good employers meaning typically government university and healthcare because those don't worry about a business you don't want to be a one horse town whereas like there's the one meat plant and everybody wants the meat plant and then smithfield foods moves the meat plant and now you're stuck holding the bag on a trailer park so diverse economies are good county seats lots of government jobs good and then just another personal preference of what's your bandwidth as far as how far you want to go from your home base how much money you have um you know and you want to park it stable which is going to typically cost more or you could probably be more of a premium or if you want a heavy lifting project which you can get by at a discount but it's harder to do that if you've got a full-time job so just um some of that some of this uh subjective as to what your investment goals are but that's just um because some of the process i go through on every deal nice no that's that's great i appreciate you elaborating on those things i just you talked about purchasing an illegal park i thought okay you know we need to make sure that we understand how not to do that or how we make ensure we don't do that right correct uh it's it's so important or that we have that information up front um and so what about just that process of working with someone like yourself if you know you know how how involved should our attorney our attorney or like yourself be involved um you know when i'm going to purchase that mobile home park uh through those those discussions or talking about permitting or zoning and whatnot yeah that's going to depend on your level of sophistication and your and your your level of interest in doing work so some people say hey i want to hire you to go through in your team to do all these due diligence steps also well that becomes more expensive some people say just do the zoning letter just do the ppm that kind of thing um some people call me and say i'm thinking about getting involved in real estate well they need it they need to create an llc i give them my letter of intent i've got a really strong letter of intent for buying that is got all the meat and the key points in there but it's not all the legalese you know it's it's two or three pages as opposed to 18 pages but i have in the bottom what's been really good for me is binding letter intent which is pretty rare most people say oh letter intent's non-binary it's like i could draw a contract up on a napkin it just needs key terms seller buyer price address due diligence or closing date but then there's a contract so i what i encourage people to do is get that loi for me for free run their own economics i can help them if they want and then um get start work with the seller and then propose this quote non-threatening letter of intent and i've actually closed on a couple deals with just a letter intent because i sent it to the seller he signs it and then he decides to re-trade the deal and i said you can't do that at census attorney the long-form contract and the attorney said attorney never read the loi because your contract was not the wrong contract it's a fair country because my guys don't want to sign it you don't want to sell anymore don't sell that price i said but i have a letter of intent and he said letter of intents are non-binding i said read the last paragraph which isn't all bowl by the way it wasn't fine it's all both this is binding this is a contract unless people consummate a long-form contract he next 30 days and he goes well i'll be and five minutes later he sent over a signed contract like close the deal like that another deal guy never even signed it i went to the bank of the title company they go we need a contract i need a contract i said that's a contract read the whole document and the guy finally showed it took like seven months to get this guy to close it and and i never gave me the due diligence materials i closed on day zero of my inspection period with an loi so so typically i tell people do the loi on your own unless you have questions you don't but then when you get a red line call me or we need to contract i'll draft a contract then we get to title work we do title objections so typically we do with title objections simon releases bill of sale zoning letter on pretty much every file some people do the contract themselves some people do the financial underwriting and modeling themselves a lot of them do the due diligence themselves and then if issues come up where there's like you're buying out the llc or you're doing a syndication those typically fall more in lawyer world and then we get the call are there any anything or is there anything that sticks out to you from your say first mobile home park deal or syndication that you would change with what you know now maybe maybe one or two of the biggest things well i mean park owned homes are the homes that you rent and you're basically in the detached departments there there's pros and cons of working homes you know if you rent the lot for 300 you can rent the home for 700 so the pros obviously more gross revenue but the downside on the parkland homes is you got a lot more repairs a lot more maintenance um and you got a lot more cash in the deal because they're hard to finance so on my on my first deal i couldn't go as fast i think i had like 90 000 to put into parkland homes but i had to fill like 15 of them so i had to spend 15 sell it do it again and eventually i recycled the same money so it would be better if i had 200 000 laying around instead of 90 and i could have done it faster but another deal i had to put like 250 000 in the parking home sometimes they're like i got a quarter million dollars in the parking lot what am i doing but that was a market in the trade area that required used homes not new homes so i guess what i would do better is is really evaluate if it's a new home or used all market and then how that impacts my my implementation and lease up plan relative to how much liquid cash i have and then willing to contribute to a single project as far as purchasing mobile home parks are and you as an operator even working with other operators you know how do you prepare for our potential well downturn mean i don't want to say that we're recessing was recession resistant but to some degree we are because you know the 2 000 a month high-rise apartments in downtown you know if you're a young cpa making 60 grand you probably like to live there but you know if you get laid off you're moving to the b apartments where you're gonna you don't get a raise you're going to be a parties people would be apartments to see move into apartment parks so in a recession we get more demand i mean we sold more houses in march his and april could ever imagine and so did everybody in the industry which is why right now some of the manufacturers are have not taken orders in six months because the demand was to the roof a bunch of private equity groups reits have come into the asset class in the last year because they see mobile versus recession or resistant so we're kind of in the right space for that but of course we still have we still have our reserves we still you know try to be conservative on our underwriting assumptions concerning our budgets maintain our maintain our you know banking relationships um you know all kind of the normal you know risk-averse strategies but but frankly we're kind of sitting in the camper seat relative to other real estate classes and then the market has the market has recognized that as indicated by our cap rates being compressed at record numbers what do you predict to happen in the real estate market over the next six to 12 months well i think it depends on what the tax code does with you know president-elect biden and i know at the time of this recording it's still there's still a little uh gray area whether or not that's going to go through i think it's looking more and more likely by the minute um if he changes the 1031 code or takes away carried interest or um increases tax rates above and beyond they were obama what they are now they were the obama administration i think it's bad for the whole economy and i think it's bad for real estate overall i think real estate is a great long-term play because you know just consistent returns and cash flow and it's a hard asset right i mean i don't know if tesla's worth what they say it's worth but you got you got a 38 in your apartment you know it's probably the bricks and the bricks in the door and the windows and the dirt is going to be there five years from now i don't i don't do the bitcoin thing you know you know kind of like warren buffett i guess i don't understand it so i don't want to play with it so i i i think the real estate market would be fine i think in the short term the long run it's going to do really well and short runs can be very dependent on government policy including you know if if aoc and some of the progressives get their way with rent control or rent a rent abatement more than the victim moratorium i mean that's good that's going to that that's going to topple the economy i don't think it's going to go through but those kind of macroeconomic forces you know can ruin i mean if you've seen the experiments in argentina and these other south american and eastern european countries and there are people you know a lot of young people in this country that think that's a great view of the world and if enough of them vote that way uh you know i'm probably gonna retire you know go somewhere warm you know they're not gonna the juice ain't hard to squeeze to work that hard to get 32 percent of it you know but do you have a couple of daily habits that you're disciplined about that have helped you achieve success yeah absolutely i'm a real big i'm a tony robbins junkie and robin sharma some of those personal development coach guys and kind of that some of their seminars read their books and we do a week our team we all do a weekly planning very detailed weekly planning uh organization then we do a daily plan which is based kind of similar to the book by gary keller the one thing that daily plan and then robin sharma's book to 5 a.m club um you're just just getting up at five instead of you know you sleep you can sleep say number hours but you used to get up at seven and stay up till two nine five stay until midnight and it's the same five hours but there's something about being up in the morning before your kids before actually before my wife and then my wife does it when she gets up you know too it's great you know she makes it makes dinner exercises praise the rosary desert does her morning reading before the kids wake up and i'm like that's awesome and then she and then she's you know she got the whole day life's nicer so i'd say getting up getting up before the sun is is an ain't no secret but it's it's been a it's been good for our team and and and then just this daily daily and weekly planning that's incredible that you bring that up it was life-changing to me once i determined it was determined to get up at like 4 30 5 o'clock every morning my wife and i both have done it now for a few years and yeah you know and i heard a guy on the show not too long ago he talked about how uh and i haven't forgotten this he said you know getting up at five instead of like seven or eight o'clock in the morning gives you almost another month in your year you know i was like wow you know think about that time that you're gaining uh and you just highlighted it there and definitely a great example of making that happen uh what about your best source for meeting new investors right now really it's i've got my podcast a little homebound lawyer podcast so that's that's brought a ton of people i mean i wish i had enough deal flow for the investor flow so i've got i've been running king city i'm on the ccim board and i've been on the board of urban land institute so i know other real estate professionals at the local market but through linkedin and through the podcast it's my network has become national so people call me um and some people i know they're not on my investor list i don't know like i don't have a hundred million dollars of deals coming on the pike so i don't there's family offices and some of these guys they call it they're real they seem like they are but they call i've got 30 million i need a place by the end of the year can you help me out like not not to that scale i wish i could so it's um this is such a unique asset class that there's not a lot of syndicators out there that are that are doing it and i think my my educational background has helped me on that where you know a lot of the guys in the field not to disparage them but they're flipping houses six months ago and now they're syndicating and when i say you know i was working i worked on the biggest project in kansas city 600 million dollar project three years ago you know i was doing complex real estate now i'm doing syndication mobile park it just gives guys a level of comfort and and i'm appreciative of that and we've delivered you know we've done i don't know i've been involved in 30 projects and um between retail and mhp and never lost money in any of them so so far so good um so that helps too sure what's the number one thing that's contributed to your success i think just kind of a focus on exceptionalism you know my mentor at the law firm said we have three rules here practice exceptional law have fun make money if you practice exceptional law your people are going to love you your client's going to love you you're going to do great projects it's going to be fun if you're practicing law and you're having fun if people are going to be coming at you when are you you're going to make money don't focus on the money focus on exceptional legal work and and we do that from planning from an operations from a financial underwriting and then on the legal business you know i got a couple new lawyers working for me and i'm just like pounding into them like you know you can't the comma off is wrong it's not close to the math the penny off is not close it's wrong so we just you know we make mistakes anybody else but to not make the same mistake twice is the key how do you like to give back well i mean depends on the time my life i mean right now you know i'm involved in men's groups church group you know catholic will tie ten percent of our income i give lots of legal advice and uh business advice to friends and family consulting kind of stuff for free um in the past i've done things like weed men's ministry big brother big sister program um right now it's taking my life with kids i'm really just focusing on our family and our fam and our our ministry with other families here in this group around kansas city called domestic church and i'm my wife and i are leaving that this year and um yeah it's really it's really been good so i've been i'm on boards and some boards and stuff too but that's i feel like this quasi giving back quasi business development so i don't i just don't count it the same sure i've heard grateful for your time and just sharing your expertise about mobile home parks lfa you just mentioned earlier too like to not make the same mistake twice is key we're all going to make mistakes numerous times but hopefully we're not making the same one over and over right so thank you for bringing that out as well uh how can people get in touch with you and learn more about you my website is the mhp lawyer.com the amazon mobile agent homepieceandpark.com that's pretty easy to find me um i'm on linkedin and other stuff my email is ferdferd at the mhplayer.com any of those will work thank you for listening to the real estate syndication show brought to you by lifebridge capital lifebridge capital works with investors nationwide to invest in real estate while also donating 50 of its profits to assist parents who are committing to adoption lifebridge capital making a difference one investor and one child at a time connect online at www.lifebridgecapital.com for free material and videos to further your success you