What would be the way to leverage myself to success using 250k capital
Hey everybody, hope everyone is having strong New year 

I’m a new investor, 22/Yr,  located down south.  I’ve managed to be in a position to have about $250K of capital to invest. I’ve acquired quite a bit of book knowledge to say the least but still in a undecided mental position not knowing 100% where to fully be invested in and pour all my soul and blood into. Knowing the first deal is the most important one, i would like to make the wisest choice possible, using leverage in the most savvy way

I’ve learned a lot about Mobile home parks and would like to focus my energy and funds there knowing tremendous cash flow potential they bring as that is my priority at the moment (Cashflow) But I would like to keep a broad field of view.

 I was wondering , what would you consider doing?  having the ability to dive into the SFH market , Multifamily Market or CRE market ? 

I am humbled and thanks in Advance !!

Kind regards 
AP
[{"id": "hugf8bm", "text": "go work for someone who owns mobile home parks for 6 months then buy one if you still want to do that work for a living", "replies": [{"id": "huggddc", "text": "This comment got me to scratch out \"Mobile Home Parks\" as an investment strategy. Thank you", "replies": [], "depth": 2}, {"id": "hugi9qc", "text": "Mobile home parks that you actually want to own aren\u2019t throwing out a ton of cash right now, they trade at like 3 caps. If you want cash flow you\u2019re buying like a 1-3 star park dealing with shitty tenants and likely reinvesting your cash flow into improvements for infrastructure. Oh and empty pad sites take forever to lease. Oh and those 1-3 star deals have a ton of POH usually which sucks. \n\nI think the MFH trade disappeared like 5 years ago, stuff is expensive now. And with &amp;250k equity you\u2019re buying like maybe a 40-50 pad site tops if you\u2019re going way down market in the middle of nowhere; you\u2019re more likely buying like 20-25 pads which is too small to invest in, OP will have to manage the deal full time on his own the cost of carry will crush your margin on staffing. \n\nAnyways my thought of the day.", "replies": [{"id": "hugnjw7", "text": "Appreciate your feed back and insight , thank you ! I\u2019ve seen a couple of deals off market going for about a 7-10 cap but of course it\u2019s going to take for more than just 250k of capital but time .  I\u2019m looking at multi family as well. Granted I\u2019m in a position where if I have to drive or take a flight to another state to manage or oversee my property I am able to do so a couple times a week .", "replies": [{"id": "huiiwph", "text": "I\u2019d suggest doing something local that you know. You aren\u2019t going to be able to live off the cash flow from putting $250k into a deal - you\u2019re realistically looking at maybe a 700k deal. Aggressively figure you might get &amp;35k/ye in NOI so after debt service and before reserves you\u2019re probably making $20k/yr in free cash flow, and that excludes capex spend over the hold. The cash on cash is pretty good, like an 8%, but in nominal $$$ you\u2019re not making enough to cover your own rent or mortgage on your personal residence. \n\nI wouldn\u2019t quit your day job with $250k in equity for a single deal.", "replies": [{"id": "huimctq", "text": "Thank your for your input bro. For sure a big temptation just to go at this full time lol as my personal overhead is pretty much nothing but currently with my day job , i trade my hours giving me the ability to work 40hrs in 3 days having 4 days off . On that note , let\u2019s say we\u2019re assuming a 20k/yr cash flow , it will go Straight into the next deal and capex/preventative  Maintance", "replies": [{"id": "huiu2dz", "text": "I mean look here\u2019s the path to wealth. Buy a small multi family that you can manage. Lift rents over several years while doing light value add work that improves margin. As deal appreciates take out a supplemental loan from Freddie to clear your basis and reinvest the cash proceeds into the next deal. Repeat a few times. Sell everything and 1031 into a larger deal. Repeat above again but with bigger deal sizes. \n\nGrind it out like this for a while and you can put your $250k to work and ride appreciation and financial engineer your way to wealth. \n\nI\u2019m a moron and got an MBA and went into private equity, now I\u2019m in too deep. I wish I had done the refi and flip game but the opportunity cost of my time is too great to even get started on something like that.", "replies": [{"id": "hujmcph", "text": "I hear your out, love it . Currently looking into of market multi as we speak  thank you !  make the best out of the MBA though.", "replies": [{"id": "hukkxj6", "text": "Oh don\u2019t worry I have\u2026 being kind of facetious. I have a great job that I love.", "replies": [{"id": "huni2vb", "text": "Are you REPE or traditional PE? Coming from IB contemplating in PE or CRE", "replies": [{"id": "hunr4r8", "text": "REPE whole career.", "replies": [], "depth": 10}], "depth": 9}], "depth": 8}], "depth": 7}], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}, {"id": "hui0c9l", "text": "I've seen multiple people say this, but when I look near me all the mobile home parks seem to be printing money. Im in Florida and just saw a 15 cap sell.\n\nIs there something going on that behind the scenes leading to these listings being inaccurate, or am I just finding a bunch of outliers", "replies": [{"id": "huidpcu", "text": "Is it really a 15 cap though, because if it is there\u2019s really serious risk. On those Andrew shih blasts if he\u2019s quoting anything higher than a 10 it\u2019s (1) usually on year 1 NOI (2) from an asset that\u2019s super low quality (like 1-2 star) with a lot of RV exposure in the middle of nowhere (3) requires you to come in and either pour more pad sites and buy POH and rent them or sell them and candidly absorption at the 1-2 star stuff sucks. (4) so all that said is it really like a 15% cap or is it a 6 cap that could be a 15 if you hit everything just right?\n\nThere was \u201ceasy money\u201d in MFH like 10+ years ago but that has long gone away. As with anything a deal at a high cap rate comes with a ton of risk.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "hugnyby", "text": "Thought about doing this but never considered to put it into action until now  . Thank you !", "replies": [], "depth": 2}, {"id": "huhgn6j", "text": "Then if it sucks, look at it even more carefully because sucky things make the most money.", "replies": [], "depth": 2}, {"id": "hujq0tb", "text": "Be the liquor, Randy", "replies": [], "depth": 2}], "depth": 1}, {"id": "hughce3", "text": "Invest with experienced partners who are also putting their own money in the deal and already have relationships with lawyers, bankers, contractors, tax consultants, accountants, etc.\n\nYou will learn a lot about how a deal is structured and how to deal with the unforseen. And if an issue comes up, they may have solutions from their experience that you would not have thought of.", "replies": [{"id": "hugq270", "text": "Thank you! Will keep this in mind moving on .", "replies": [], "depth": 2}, {"id": "hugtypt", "text": "Where would you find an experienced partner for someone who has money to invest and has been educating themselves but not much practical application?  Specifically looking for general partnership and to learn/participate not just fund.", "replies": [{"id": "huh3vyo", "text": "Valid  question", "replies": [], "depth": 3}, {"id": "hunu5g1", "text": "Your best bet is probably finding someone who recently started their own venture after working for another developer. They typically don\u2019t have a ton of capital so they need partners who can bring equity and will be glad to have another set of hands that don\u2019t need to be on the payroll.  \n\nAs far as meeting one of those types of people goes, just networking in whatever geographic area you want to invest in is probably your best bet. Call up debt/equity brokers and just be straightforward about your situation and what you\u2019re looking for. Some may not be responsive, but smaller shops are so feast or famine that you\u2019ll have luck if you don\u2019t give up. Your mileage will vary on how much you want to invest and how fat your personal financial statement is.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "hugptbb", "text": "You can probably find a crappy 4 unit to buy and live in. If you\u2019re willing to live in less desirable neighborhoods you can do that in most smaller markets. \n\nLive in the worst unit, Renovate, then lease out at higher rents. Rotate into others as vacancies arise. You\u2019ll have a nice cash flowing asset once you\u2019re done. \n\nIt\u2019s great in theory.", "replies": [], "depth": 1}, {"id": "hugrq59", "text": "Right now is tough I get offers for 3 caps right now on my parks unless you find one in the middle of nowhere or has been poorly managed you maybe be able to find one but in this market you\u2019d be lucky to find 10 pad park for less than 500k", "replies": [], "depth": 1}, {"id": "hugvq12", "text": "First off, congrats. I will stress that if you want to continue on this road, it is important that you create a track record on the principal side. Experience will help you scale in the future. \n\nIMO multifamily is overpriced right now unless you are doing value add. NNN is safe/affordable with less upside. MHP is overpriced. Retail still has some deals. \n\nI agree with the group that you should try to invest with experienced partners as this is your first deal. The good news is that you are young and can bounce back relatively easily should things not work out.\n\nNote that currently, 80% LTV Max for Multifamily (if above 5.50% cap), 75% LTV max for retail/NNN (if above 5.75% cap) and leverage depends on a wide variety of factors including location, leases, property condition, etc.", "replies": [{"id": "huh5jpb", "text": "Thank you for the insight, for sure have to reenforce keeping a clean track record of my principle . I\u2019m up to the point where I feel as if I just have to throw myself in the fire, knowing myself I\u2019ll just pick up along the way the practical skills I\u2019m in need of. Will definitely keep in mind what you have said .", "replies": [{"id": "huhzz3u", "text": "I believe the OP was referring to keeping a clean track record (ie reputation) as a principal aka owner aka GP. Not just keeping a clean track record of your principle, which I assume would be your accounting.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "huhxc39", "text": "Buy 250k worth of EPR.\nUse 100k of margin &lt;2% IBKR\nNice yield, monthly divs. Keep reinvesting them.\nBeaten down retail reit practically trading below liquidation value\n\nThe time you would spend dealing with MHP, focus on your career or work a second job.", "replies": [], "depth": 1}, {"id": "huihhui", "text": "Are you looking to actively own and manage or looking to invest for cash flow? There are passive options where you can invest in syndications with qualified operators at $50k per pop plus you can still take avantage of bonus and accelrated depreciation (you can't in REITs).. Most active options at scale will suck that $250k up very quick with high risks of loss depending on ypur experience.", "replies": [{"id": "huik0xf", "text": "I plan to actively own, manage( or outsource this  )  and Scale up. Syndicating is a good idea due to the fact that 100% of the risk isn\u2019t in me, so definitely appreciate the insight! Although that I\u2019m willing to go all IN on a deal. Calculated risk isn\u2019t something I\u2019ll run", "replies": [{"id": "huil3sc", "text": "Got it..my advice would be to de-risk by choosing the asset class that you understand the most. What product you are selling and how to force income via the restrictions of the types of leases. Many people understand residential leases..SFR, MHP, apartments..12 month leases, marketing a nice clean safe place to live for people that can pay. Others understand the complexity of the commercial property leases and the jigsaw puzzle the tenancies can present.\n\nYou have have a decent amount to get started just be careful of shiny object syndrome. Play local, keep reserves and strive to offer a nice product at a good price for tenants. Good luck!!", "replies": [{"id": "huj3sln", "text": "Thank you my brother, appreciate it. Definitely will have myself and have others hold me accountable from going towards those shiny objects", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "huir1mq", "text": "You're 22.  Invest in a mutual fund.\n\nFind someone that does what you're intrigued by and go to work for them.\n\nKeep putting your excess funds in that mutual fund until you're 35.\n\nAt 35 and 1 day, find someone who is knowledgeable about whatever it is that intrigues you at that time and ask this same question.", "replies": [{"id": "hujhhxs", "text": "Just because this is the advice you would have given yourself at 22 doesn't mean its the right advice just because he's 22.", "replies": [{"id": "hujr4ob", "text": "Lol.  It's good advice but it's not exactly YOLO", "replies": [], "depth": 3}, {"id": "huknfi9", "text": "Well, considering I'm not God and don't know *precisely* what is the ultimately perfect advice for this *specific* human, the best I can do is offer him what will provide him insight, while he builds up his nest egg (since it's not enough at this point to build anything, without failing, and needing even more cash to fix the fuck ups inherent in youth) and, more importantly, gain the knowledge to discern when he's getting good advice, versus eager advice (one will cost him, one will advance him).\n\nAll of which he is *far* more likely to have at 35, than at 22.\n\nConsidering that he's asking this question, he clearly doesn't already know the answer, and, if the question is \"*what should I do with 250K?*\", you better KNOW the answer, because getting it wrong is a very expensive end result.\n\n(And if he was in fact capable of discerning this quite important answer, he wouldn't be asking complete strangers on Reddit for financial advice of this merit.  That he is, clearly elucidates that he should wait, and gain far more knowledge than he currently has.  That will only come from 2 places: Time, or education.  Both of which are more likely to be his at 35, than at 22).", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "huj0hc7", "text": "Create a new version of mobile home parks. Ditch the double wides and do small home communities. Tiny homes, Airstreams, etc. Target secondary markets where younger professional are out priced for SFR and might like this. Communal services like laundry facilities (income), organized activities like food truck night or game night. Create something that doesn't exist and offers value.", "replies": [{"id": "huj2ior", "text": "Amazing idea not only for me but for anyone who is seeking out a way to ride. Thank you for your input .   The more I study about this market the more I realize ideas such as this \u201c creating a new phase of affordable comfortable living \u201c will provide a lot of value in the future soon. I guess the way to start this would be purchasing a MHP and slowly phasing out the older single/double wides and phasing in a new gen affordable homes", "replies": [], "depth": 2}, {"id": "hukusak", "text": "This person doesn\u2019t understand the costs associated with such a venture. This is effectively a non starter with the capital you have to invest and has been tried by every bohemian developer with a weed dealer. It doesn\u2019t work. Land costs are at all time highs, site work, construction costs and labor. I\u2019d argue most ground up development will need to take some time to cool off because of these issues. Look for existing product, do not develop.", "replies": [{"id": "hul3mhk", "text": "You are right, I don't know the costs, I was merely introducing a concept. Maybe OP could find an existing mobile home park and repurpose it. They are young, ambitious and hopefully, broadminded.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "huj5j0u", "text": "read this\n\n[https://retipster.com/opmguide/](https://retipster.com/opmguide/)", "replies": [], "depth": 1}, {"id": "huj8728", "text": "Buy a cheap, high cap-rate, management intensive asset in the middle of nowhere. Move there and manage it. It will be like getting paid to go to business school. Student housing maybe? Motel to residential conversion?", "replies": [], "depth": 1}, {"id": "hujikjc", "text": "The laws for manufactured housing communities are significantly different than the laws governing standard multi family. I would do plenty of research concerning these differences because you can really get yourself in some trouble also with 250,000 in capital I would aim to find a value add smaller to midsize multi family portfolio or community to gain the best returns and cash flow. \n\nI would be at your age less concerned with cash flow and we\u2019re concerned with long-term value that being said traditional multi family in value add commercial are significantly more obtainable less risky and generally 100 times less of a pain in the ass and manufactured housing.", "replies": [{"id": "hujohs2", "text": "Seems like Multi family market would be the asset class that would best suit me for starting off. Thank your for your insight my brotha", "replies": [], "depth": 2}], "depth": 1}, {"id": "hujp1ix", "text": "Appreciate how helpful everyone has been so far. As this discussions evolves, I\u2019m hopeful users would be able to come into this post and leave for a more  defined mental state regarding the trajectory  \nOf their success journey", "replies": [], "depth": 1}, {"id": "hun7mes", "text": "Your young... get started buying an renovating homes and build a track record. \n\nBest way to make real money is with OPM... other people's money. You get to invest OPM by having a track record. You are incredibly lucky to have the opportunity to start that track record so young. Do it. Get a mentor. \n\nHeres some math. With $250k in a 90/10 LP(investors)/GP(you) structure with \\~70% debt, you have buying power of \\~$8.3m. With a AM fee and a decent promote, you can start a real business. Get a business partner with $250k as well.... you have buying power of $16m\n\n.... but you need a track record to raise money. \n\nGood luck.", "replies": [], "depth": 1}]