Business Plan

[Lincoln Lewis]

Does anyone have a MHP investment business plan they would share? I've been crafting mine and I feel as though I'm neglecting numerous points. Any help would be greatly appreciated! 

[Ken Rishel]

Originally posted by @Rick Fagan:

I have been evaluating parks lately.  Most of the ones I looked at will owner finance most of the sales price.   Having said that I still need to find $200k approximately  in cash to give to the owner while the owner takes back a note.  The most recent park was already receiving $940K at 8% for 30 years (24 years left).  The estimated cash flow was $8K net per month. The last park in my area had 45 homes and sold for $500K which was very cheap in my opinion.

 Smaller parks can be tricky. The example you discussed - 45 homes for 500K=$11,000 per site - seems a bit pricey, but, there is also a whole lot we don't know. All of that said, people need to start somewhere and preferably close to home with their first park, especially if they have full-time employment elsewhere. 

Raising cash is easy, but depending on your circumstances, it might need to take a different route. Assuming you can handle the sales and marketing, which according to your profile looks possible, you won't need a private placement memorandum to solicit private investors which will save you 30-50K in attorney fees if you raise all of the money in Tennessee (rules vary from state to state).

In reading your profile, finding high net worth individuals close to the geographic area where the park is located, seems to be your best bet. 200K could easily come from one individual, but if I understand your background, you might be better off looking for 4 investors each putting up 50k because they will be easier for you to manage as a group. Your part would be the knowledge and sweat equity that you have to sell them on. I'm guessing you will have to pay 8-12% interest because it is your first project, and from an investor's point of view, more risky. Later, with additional projects, you should be able to pay far less in interest as your track record builds.

Success in raising money will depend on how the prospective investors react to you, and what they and the people they pay to say "No" see in your executive summary. As I related earlier, I have been on both sides of this. Today, I'm solicited all the time as an investor. Here is my take:

• If they don't trust your honest, you are dead in the water.
• If they don't trust your knowledge and expertise, you are dead in the water.
• If they find you arrogant and hardheaded, you are dead in the water.
• If they don't understand your plan or it isn't logical, you are dead in the water.

On the other hand, if they trust you, trust your knowledge and expertise, and your plan makes sense, and they feel they can work with you, they will give you money provided you are talking to the right people in the first place.