Mobile Home Park Purchase

[Griffin Schermer]

Investment Info:

Large multi-family (5+ units) buy & hold investment.

Purchase price: $240,000

We purchased a 15 Pad MHP in Connersville, IN. Everyone in the community owns their own home and rents the land. This is our third community purchase as we continue to go after more communities.

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

Our team is focused on purchasing MHP's that are on all city utilities. Our goal right now is to pursue 1 new MHP every quarter.

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

We found this deal through a wholesaler. He was asking for $290,000 and we were able to get another $50,000 off of the price. He had told us this was a 100% TOH community, but through our due diligence process we found out the seller had lied. There was about 50% POH and 50% TOH. In a few short months we were able to turn this into a 100% TOH community.

How did you finance this deal?

We raised investor capital to fund this deal. We the purchased it all cash.

How did you add value to the deal?

We have turned all of the POH into TOH to reduce our liability and need to maintain homes. We've also sub metered the water and estimate we will save around $8,000 - $10,000 in cost through the first full year of ownership. We also have a $25 rent increase going into effect, and we are pursuing filling in a couple of vacant pads in the community.

What was the outcome?

We are debating whether to sell this community or hold onto it long term. It has been a great learning experience as well as a great asset that is producing cashflow for us.

Lessons learned? Challenges?

We learned that Submetering water will help you identify where there are water leaks at. It's easier to identify water leaks because we had a couple of tenants with bills double that of others. This also may help tenants identify if they have any leaks in their home they may be unaware of. We've also had some challenges with our onsite manager sometimes being difficult to work with, but it's taught us how to be better people managers.