In this RED Podcast Legacy Series episode, Ferd Niemann explains Property Tax Appeals.

Enjoy!

HIGHLIGHTS:

0:00 – Intro

2:24 – Look at comps or the other properties in the area

3:08 – Sales chasing

3:48 – Appraisers need to appraise fairly and accurately

4:09 – There are 3 reasons to appeal; valuation, classification and discrimination

5:20 – Assessment is supposed to be revenue neutral

6:41 – Informal appeals and getting your documents together

9:20 – One of the benefits of the industry is that there's little barrier to entry

10:21 – Pull comps, and come up with the equalized value, and this will show a big difference in what you are paying

12:08 – Two options for the county are lower the equalized asset value or increase everyone else

14:03 – If you lose the board of equalization, you then go to the state tax commission

14:22 – Most of the time you need to hire an attorney and licensed appraiser just to play the game

14:51 – Going through a trial

16:13 – If you lose your only option is to then appeal in circuit court

17:36 – It’s important to continually do a cost-benefit analysis

RESOURCES:

Property Tax Appeal Checklist

In this RED Podcast Legacy Series episode, Ferd Niemann explains how to underwrite property taxes and how to get the most, or should we say the least, out of your tax bill. Enjoy!

HIGHLIGHTS:

0:00 – Intro

0:58 – It’s important to do a good job with property tax projections

1:53 – Property tax appraisers have values lower than the current market value

2:59 – Property tax assessors don’t want to raise the property value and annoy voters

3:33 – There’s a risk when you purchase a property that your taxes are increased

4:11 – Ferd looks at the current market value in accordance with what the assessor tells him

4:26 – Looking at the purchase price

6:19 – Ferd’s formula for calculating tax dollars

9:08 – Know your jurisdiction to calculate your paying

9:48 – How probable will a tax increase will be?

15:34 – You should underwrite some percentage of increase

15:54 – Strategies to mitigate the risk

16:51 – Allocate some of the purchase price to non real estate items

17:59 – Try to flag the sale as invalid by throwing something unusual into the contract

20:05 – Buy the LLC membership units

21:25 – Another risk is bankability

21:51 – Get mutual or buyer indemnification provision pre-closing

24:12 – There are going to be extra filings for tax returns

RESOURCES:

Underwriting Property Taxes Checklist

In this Legacy Series episode of The RED Podcast, Ferd Niemann takes us through 10 Things To Include In Your Zoning Letter.
Hosted by Jonathan Gilmore.

HIGHLIGHTS:

0:00 – Intro
0:59 – There’s 3 types of zoning; legal, illegal and legal non-conforming or grandfathering
2:26 – Grandfathering has its roots in voting laws
5:19 – A lot of mobile home park land was originally parking lots
6:03 – To preserve your zoning, it’s important to keep at least one mobile home on your lot
7:25 – A certificate of zoning or a zoning letter is government letter head which is your insurance policy to say you have a zoning right
8:41 – Make sure there are no outstanding code violations on the property
9:52 – Find out the current zone is
12:12 – You want your letter to say a mobile home can be placed on all existing vacant or occupied lots
16:30 – You want the zoning letter to reference the location of the homes in the park
19:23 – Make sure there are no restrictions on the size of the home or the age of the home
20:17 – Make sure there are no requirements or restrictions as it pertains to the concrete pillars or pads under the home
21:22 – Usually the city doesn’t care
21:23 – Ensure you’re not subject to development code or any new infrastructure requirements, impact fees or development fees based on the transfer of the park
22:35 – You want your letter to say the park was existing prior to the code of 1975, although usually this is the first thing cut out
24:06 – If the city objects, work out whether it’s worth it
25:19 – Threatening to sue and using demand letters works a ton of the time
25:36 – If they damage the value of your property, they have taken something from you, meaning if you beat them in court you can pursue legal fees
27:33 – If you do sue and win, prepare for an appeal

⁠Zoning Letter Checklist

In this Legacy Series episode of The RED Podcast, Ferd Niemann takes us through Title Commitment and Surveys 101 - Part 2. Hosted by Jonathan Gilmore.

HIGHLIGHTS:

0:00 – Intro
1:13 – The survey is an extension of the title commitment
1:20 – Ferd describes the base-level boundary survey
3:08 – Ferd describes a typical Alta survey
7:16 – The first item on the Alta Survey, Table A is to do with monuments placed
9:23 – Number 2 is the addresses of the surveyed property
9:52 – Number 3 is the flood zone classification
10:19 – Number 4 is the gross land area
12:16 – Number 5 is vertical relief with the source of information
12:44 – Number 6A is List the current zoning classifications and 6B graphically depicts the setback requirements
13:41 – Number 7 is exterior dimensions of all buildings at ground level
14:49 – Number 8 is substantial features observed in the process of conducting the fieldwork
15:09 – Number 9 is the number and type of identifiable parking spaces
15:45 – Number 10 is the determination of the relationship and location of certain division or party walls with respect to adjoining properties
16:31 – Number 11 is the location of utilities existing on or serving the surveyed property
22:24 – Number 12 is governmental agency survey-related requirements
22:40 – Number 13 is the names of adjoining owners according to tax records
23:45 – Number 14 is the distance to the nearest intersecting street
24:13 – Number 15 is rectified orthophotography
24:44 – Number 16 is evidence of recent earthmoving work, building construction, or building additions
25:25 – Number 17 is proposed changes to street ride away lines
25:46 – Number 18 is the location of any delineation markers
26:14 – Number 19 is any plottable offsite
26:41 – Number 20 is professional liability insurance
27:20 – Ferd recommends that the seller pay for the survey and require them to include any surveys which have been done in the past
21:25 – Surveys can be expensive, but they’re a must

In this Legacy Series episode of The RED Podcast, Ferd Niemann takes us through Title Commitment and Surveys 101.
Hosted by Jonathan Gilmore.

HIGHLIGHTS:

0:00 – Intro
1:02 – There are many title companies out there, it’s not necessarily important which one you use
2:05 – The first page is the Schedule A, this includes the date they did the survey on
2:56 – Schedule A will tell you what type of policy and the policy amount
4:20 – Next on Schedule A comes the proposed insured
4:50 – Next Schedule A talks about the interest
5:08 – Schedule A says who the title is currently vested in, followed by the land described
5:56 – Schedule B notes the requirements and exceptions
6:29 – You must be notified if someone else has an interest in the property
7:00 – Schedule B will have an affidavit which is basically to say that certain things don’t exist
8:22 – Schedule B will have some information about the documents of the title company required
9:10 – Schedule B part 2 is the exceptions, Ferd cares about the easements the most and they’re usually slower
13:05 – You need to work out what exceptions there are and fix them or work around them.
14:15 – This is when your objections come in
14:57 – If you have a lender involved, you’re going to need a loan policy
16:19 – You can get a closing protection letter
19:43 – The final step is the closing statement

In this Legacy Series episode of The RED Podcast, Ferd Niemann takes us through 10 Land Mines to Avoid in Due Diligence.
Hosted by Jonathan Gilmore.

HIGHLIGHTS:

0:00 – Intro
0:52 – Warren Buffet is much better at avoiding a problem than getting out of a problem
1:40 – Advertising your properties
4:16 – Most mobile home park owners want to own the land not the homes but most tenants don’t want to buy
7:55 – You have to look at the size of the lots and make sure you don’t get hurt with set backs
10:10 – Read the zoning code, understand grandfathering and then negotiate with the city
11:12 – What are the development restrictions and requirements for maintenance and operations
12:00 – Make sure you have an operating city permit
13:30 – Run a police report and a sex offender check
14:19 – If someone is selling drugs in the park, hire an off duty cop to monitor the park for 2 nights
17:33 – Make sure inspect the utility and infrastructure, such as the roads and gas lines
18:42 – Make sure your title survey easement review matches up to your inspections
20:15 – Inspect the water and sewer
21:21 – Make sure there is valid title
22:10 – Make sure due diligence doesn’t start until he gets his title and survey
24:50 – Inspect the bankability of the property, make sure it will appraise, make sure it will pass the condition requirements for bank financing
25:43 – Get a phase one environmental

⁠Due Diligence Land Mines Checklist

In this Legacy Series episode of The RED Podcast, Ferd Niemann takes us through 30 Seller Deliverables to Request for Your Due Diligence.
Hosted by Jonathan Gilmore.

HIGHLIGHTS:

0:00 – Intro
2:03 – When do you ask for the seller deliverables?
7:16 – Request environmental reports for the property
8:04 – Ask for any construction drawings or as built drawings of infrastructure
10:24 – Copies of any easement agreements, amendments or derestriction
10:33 – Copies of any permits, certificates of occupancy or licenses
10:54 – Copies of any leases
11:27 – Reports, tests and ratings of the infrastructure
11:41 – Any appraisal of the property
12:09 – A copy of their current insurance policy
12:27 – A copy of any writer first refusal for any portion of the property
12:45 – Copy of any property tax bills or assessments
13:05 – Any letters of non-compliance from any governmental agencies
13:15 – Copies of utility bills
13:51 – Copies of all vendor and personnel contracts
15:20 – Contact information of all vendors and personnel
15:47 – Certified rent role
16:13 – List of 5 best and worst aspect of the property
16:35 – Copies of their bank statements
17:43 – Copies of financial reports
18:12 – Copies of tax returns
18:51 – List of any capital expenditure over the last 5 years and projected over the next 2 years
19:02 – List age and type of material of all utilities and infrastructure
19:17 – Status of the utility
20:01 – Date and amount of the last 3 rent increases
20:51 – The list of any personal property which is included in the sale
21:01 – List of any mobile homes included in the sale
21:18 – A list of any criminal activity or problems over the last 2 years
22:17 – The local police department will give you a report of the criminal activity

RESOURCES:

⁠Due Diligence – Seller Deliverable List

In this Legacy Series episode of The RED Podcast, Ferd Niemann

HIGHLIGHTS:

0:00 – Intro
1:54 – Put the full and correct legal name of the seller in the contract
2:14 – Put the full and correct legal name of the buyer in the contract
3:06 – It’s important to have good assignment language
5:25 – Get the legal description of the property and the address of the property in the contract
5:45 – List personal property in the contract
6:20 – Include the purchase price in the contract
6:28 – Include the earnest money deposit amount and date it’s due in the contract
6:46 – Include the right of entry in the contract
6:54 – Include language about policies and find out what objections you can have
7:50 – Reference the condition of the property
8:10 – Put in a clause about the risk of loss
8:54 – Your due diligence clock shouldn’t start until you have everything from the seller
10:17 – Include an extension fee in the contract to buy more time
11:10 – Mention seller required actions such as terminating any vendors contracted to the seller
14:59 – You need prorations at closing
15:23 – Include seller reps and warranties
16:37 – Include buyers reps and warranties
16:50 – Include a buyers right to terminate
18:06 – Make sure you have damage or default
19:00 – Have a closing date in the contract
19:27 – Include the buyer contact details
19:51 – Include a closing contingency for if you need an escape
20:37 – Have a buyer/seller cost breakdown
21:29 –  If you have a broker, you need to include broker representations
22:03 – Make sure you have survival included in the contract
22:50 – Have a 10-31 exchange included
23:35 – Include a COVID clause, for extensions
23:51 – The FERPDA provision is an extra form to fill out if you’re from a foreign country
24:16 – There are boiler plate provisions which are usually included
25:07 – Have a signature block, obviously
25:09 – Include some exhibits like an aerial map
26:11 – Finally, have an allocation to purchase price

Resources:

Purchase and Sale Contract – Key Terms

Join Attorney Jonathan Gilmore In this Legacy Series episode of The RED Podcast, where attorney Ferd Niemann discusses underwriting assumptions for your profit and loss and your day 1 budget. Ferd explains step-by-step how you can budget effectively and why it’s so important to get an accurate read on your budget.

0:00 – Intro
1:55 – The first main area to consider is profit and loss
3:24 – The biggest problem with a construction budget is not a misprice, but a missed price.
5:26 – The industry standard is a 30% expense ratio if the tenants pay the water sewer, and about 40% if the landlord pays it.
5:57 – Ferd likes to refine his numbers to put together the best offer possible
7:52 – Ferd explains the basic profit and loss formula
8:58 – Renters typically stay about 2 years compared to mobile home owners who stay for around 8 years
9:28 – Ferd takes us through big misses on operating expenses
23:16 – The day one budget can be done from photos and videos or your initial visit to the site
23:30 – Ferd takes us through the key items for use of funds

In this Legacy Series episode of The RED Podcast, Ferd Niemann shares 11 things to consider when evaluating a Real Estate deal. These 11 steps could help you find the perfect deal and makes life that little bit easier when you’re in the negotiation stage. Enjoy!

0:00 – Intro
1:12 – Step 1: Establish the geographic location in which you want to invest
2:56 – Step 2: Evaluate the size of the purchase
3:45 – Step 3: Evaluate the current occupancy, and quality of the park
4:11 – Step 4: Evaluate whether you are getting a fair and reasonable price
7:06 – Step 5: Evaluate infrastructure and utilities
8:32 – Step 6: Evaluate its bankability. Can you get a loan for the park? What is the overall risk?
9:06 – Step 7: Evaluate the market. Get a feel for the housing needs to help you with pricing.
10:18 – Step 8: Evaluate your gut feeling. Change your focus from macro to micro and find out whether you’re going to feel good about the deal
10:51 – Step 9: Begin to a detailed financial analysis on the park.
12:09 – Step 10: Draft a letter of intent. This is an offer to purchase, sets the initial terms of the deal and should be as detailed as possible.
15:20 – Step 11: Draft the contract.

Resources:

Evaluating A MHP Purchase

LOI template for MHP