First Mobile Home Park Deal

[Kevin Krysty Jr.]

Investment Info:

Mobile home fix & flip investment in Carthage.

Purchase price: $130,000
Cash invested: $18,000

In the spring of 2019, I found a 21 lot Mobile Home Park in Carthage, NC. It seemed to be mismanaged and ran down, so I tracked down the owners and asked if they were interested in selling. They said they were and after a few weeks of negotiations, we were able to come to amicable terms. At the time of purchasing, there were 13 residents who all owned their trailers (ROH) and 3 vacant park-owned homes (POH), with each lot being separately metered for water (public), and all residents paying their own utilities. I partnered with two other first-time park operators/investors and we were able to get everyone paying rent, small lot rent increases, renovating trailers and adding 3 new residents (ROH), and just cleaning the place up. It has become a great asset. We presently have it on the market, with a closing date set for mid-December 2020. Further details to come.

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

Cash-flow

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

Driving on my way to meet a client and saw the park looked distressed. Found the owner through the county records and connected with them. Built rapport over several weeks with the owner, went to lunch, talked on the phone, and found something that would work best for both of us.

How did you finance this deal?

The same local investor who held the note for the previous owner held a new note for us. We agreed to put $10,000 down, pay $1,200/month, with a 12-month balloon (unless otherwise agreed upon terms).

How did you add value to the deal?

Being one of three partners; the value I added to this deal was that I found it, I am the managing partner (boots on the ground), and handle all the day-to-day operations of the park.

What was the outcome?

We are currently cash-flowing ~$2000/month. But because of the current market, and the short-term plan for this property at the start, we put it on the market and currently under contract with a closing set for mid-December.

Lessons learned? Challenges?

The two biggest lessons I've learned are this: 1) The responsibility of a property/park manager. I gravely underestimated the amount of work and attention needed for this role. 2) Even though there are great investment opportunities and money to be made, we're dealing more with people (& their lives) more than actual real estate. And being in the position of owner, we can either drastically help or hinder the people who are living there. That also holds a tremendous amount of responsibility.

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

Richard (Trey) Yelverton is the real estate attorney we have used and he and his team are fantastic!