All Forum Posts by: Matt Boettinger

Hi All,  My partners and I closed on my third mobile home park.  79 spaces located in Florida.  Appraised for 60% more than the purchase price with lots of upside.  Rents are significantly under market.  The market has a significant shortage of affordable housing with low unemployment.  We hope to double the value in 12 months.   

This deal didn't come easy.  We first made contact with the owner over a year ago when we heard he had an interest in selling.  It took a lot of time, energy and relationship building to get it to the closing table.  But this was a good deal so it was worth it.  

Thanks!!

Matt

Hi Doug - If you want to review the deal  with me feel free to PM me.  I own 3 parks and can offer my insight.  

oops.  I see now that the water is paid by the tenant.   That is good.  Check the demographics like I stated and put in an offer.  Feel free to PM me if you want to discuss next steps.

It looks like a workable deal.  You said it is on city water.  Are the tenants separately billed for the water? or is the park paying?  If the park is paying expenses would be significantly higher.  You will need to confirm this.

I would also go to the City Data web site to see the demographic data.  you can see how far it is from a major city and get a better feel for the area.  It will also be useful to find out the population of the related MSA.  

The rents seem pretty low to me for even rural Ohio.  32 out of 36 lots that are occupied by TOHs leads me to believe that you could raise rents after buying.  

You Could also try offering some money for them to vacate and sign over title to the home.  If possible you want to keep the home there so you can rent or sell it.

You should talk to the owners of the parks where you flipped the mobile homes and see where they are in their investment cycle.  Maybe they want to sell.  It would be worth taking them out to lunch and express your interest.

Hi Ana  - If you have park owned homes you need to insure for replacement value.  Does your park has mostly tenant owned homes?  If so, and a hurricane comes through and the homes are totaly destroyed the tenants will most likely move on.  We have a park in the Gulf Shores area.  We have 18 months of income replacement insurance.  This would give us time to raise capital and buy more homes to put in your park.    You may want to look at that too.

As always, check with your Lawyer.  But the was we structure it the answer to you question is 'yes'.  as long as you give them the option in the contract to decline your offer of taking the home without any penalty.

Regarding Dodd Frank...you cannot do a straight rent-to-own but you can get around it by doing a lease/option.  That is after a certain point of on time payments you can give the option to the tenant to have the home rent applied to a purchase.  They can continue to rent and pay the home and lot rent or choose to buy and pay the much lower lot rent.

Since you are dealing with 4 separate parks it will be on the expensive side.  4x Phase 1s.  Maybe $2k a piece.  They may give discounts on some since they are so close.  Same with appraisals ( assuming bank financing ).  $2-3k a piece. 4x the title work.  I'm not sure the price for that.  4x the sewer camera scoping if you are going to do that @ $100-200 a piece. Also you will need to devote more time relating to investigating zoning and other city/county related DD with the 4 parks.  

I'm just trying to map out the prices that increase due to buying more than one park.  I know I'm just scratching the surface here.  PM me if you want to walk through more items.