Proud of my mobile home park

[Nolan Andrews]

Investment Info:

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

Purchase price: $1,150,000
Cash invested: $750,000

I got insanely lucky on my first MHP deal. Yes, I knew the market and I knew I had to find room for 1031 money but I have learned the true meaning of upside. I also happened to purchase it right after the pandemic when rents began appreciating at 20%/year. I am bias, but after 2 years of rehabbing park owned homes and improving the community, cash flow has gone from $14k/month to just under $30k/month.

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

Rising land costs made development harder to do, and I knew the area well enough to know growth had began but was far from complete. I knew mobile home parks were a good investment and after this deal it's over 85% of what I do.

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

Called the owner and spoke for over an hour. Within a month it was under contract. I offered $900k, was countered with $1.3M and we closed in the middle.

How did you finance this deal?

1031 money and a 33% LTV 5/15 bank loan.

How did you add value to the deal?

Forced appreciation by moving rents towards the market. Improved ineffecencies and delivered a product that nobody in the market was delivering.

What was the outcome?

A stabilized cash-flowing investment that will return >20% annual ROI.

Lessons learned? Challenges?

Management and park-owned home operations are incredibly burdensome but worth the spread on lot rents.