Mobile Home Park Turnaround

[Kaiser J.]

Investment Info:

Large multi-family (5+ units) commercial investment investment in Gastonia.

Purchase price: $800,000
Cash invested: $247,000
Sale price: $1,690,000

Mobile home park with 35 pads, a duplex, and 20 unit storage facility in the Charlotte metro area.

What made you interested in investing in this type of deal?

I wanted to learn about mobile home parks and felt this location was well suited for future appreciation.

How did you find this deal and how did you negotiate it?

Found on mobilehomeparkstore.com and engaged the listing broker to serve as dual agent. He ended up serving as a part-time property manager and has since become a trusted advisor.

How did you finance this deal?

Mortgage from relationship bank underwritten as a land loan. 35% down, 10 year amortization, 3 year term.

How did you add value to the deal?

Spent $760,000 on CapEx / rehabs, but only $247,000 of that was out-of-pocket. The other $513,000 came from rents that I continuously reinvested.

What was the outcome?

Grew rent roll from $7,000 to $23,000 per month. Sold to an out-of-state investment fund.

Lessons learned? Challenges?

My biggest challenge was time given that I love my day job and it takes up 65+ hours per week. I made every rookie mistake in the book and got burned by several contractors and numerous tenants. However, those were ultimately valuable lessons. The best outcome is that I was able to take the knowledge I gained and buy another park in 2020, then increase the value of that property by $500,000+ in a single year. I could not have done that if I hadn't taken my lumps on this one.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I was able to build a small team consisting of a third party contractor who is now dedicated solely to my properties, a part-time business manager, and a part-time project manager.