All Forum Posts by: Account Closed

And @Jay Hinrichs mentioned the other really important thing. When you buy right, on 10 caps you are typically also looking for the value add play with under market rents, sorry see now that @Joel Owens touched on it above with utility bill backs push the parks value even higher.  I know apartments are tougher but Id guess there are not a whole lot of places that are 40% below market rent. 

Its hard to get excited about the returns on triple nets especially with interest rates so low but once you start talking about 20-30% plus ROI on parks, it makes the story more compelling.

I operate under the belief it is a misplaced asset class. The stigma that some have mentioned above is I believe what keeps the opportunity alive.  I don't think it will last forever (and I could be wrong) .  MHPs don't have the CapX that multi family will which is really tremendous from an investment perspective i feel. Cash flow is much better and stability of revenue far exceeds apartments.  When you own your own home, it costs 5 k to move.  When you live in an apartment, you skip out overnight in a uhaul truck. 

True the regulation increases on some levels but its a double edged sword.  That makes it much harder for any new parks to be built and therefore makes your park that much more valuable.  The business term would be "competitive advantage" 

So the rest of BP knows, there are a lot of well run parks out there, with respectable people living there, who aren't all dumps and the police called 24/7 in GREAT areas that go for 10 caps.  But as long as you have your blinders on, those deals will pass you but there is TREMENDOUS opportunity in MHPs and they are far superior to apartments in all ways. 

135x31*12 = 50 220 gross annual.  *.7 = 35,154, theoretical 10 cap value of 351,154 value. 

But .... being the lot rents are a bit on the lower side, park is smaller.. you might want to use a 60% valuation of NOI ( before you start to get the specific expenses) and with the septics , size of the park , i would use a high cap rate. Then I start getting closer to the 250k value based on my method.

The park owned homes are not real old homes so I guess thats good.  IF they are in good shape, you might be inclined to give something for them... As you indicated, if market lot rents are 200 that is great but you want to make sure you are doing a lot of paying for potential. I would still offer much less than what you sound like you are wanting to do So if you are wanting to give around a few grand for each then you might start getting closer to 300 for the package if you really like it. Those are my thoughts..... 

@Mark Brown

You would be hard pressed to make any sense of a park like this.......

If you start talking around 100k with seller carry it might be worth looking at seriously but judging from what the asking price relative to my suggestion, I would not waste your time.  Pocket listings can be good but be careful because there are ugly pocket listings out there too.... 

@Mark Brown

Hold your horses here.... it looks like you are assigning the value of this park based on market rents where you are calling it a 13 cap..  On current rents, its grossly overpriced.  Especially for a relatively smaller size park and on septic....

You say does not have water or other utilities sub metered.  You need to clarify on that.  Is the park paying water gas and electric??? 

Also, is the water well or city? 

The best spot to start with older POH is..... ZERO.  Its a headache and some might need a lot of $$ of fix up. 

I would lock in for longer terms if possible 

I signed up through the link. I am planning to stop by .  Thanks

Sal,

What if someone sells you  a park for 900 K, and does an owner carry at 10 % ?  They make you come up with 0 for a downpayment.  What I did not tell you , the loan term is amortized over 2 years, the park is only worth 450k and best part is since you were too hung up on a down payment, you did not dish out for a phase 1 and bought a contaminated property.  We can make it even more fun and give you an illegal lagoon but things are bad enough for you already.  There are such things as no money down deals but you have to tread carefully if you are too hung up on the terms.  You should spend the time to find a great deal and have someone help you with the "terms" aspect, instead of buying a dog with nothing down.  

It is also possible to get a good deal with "low" or no money down but you really need to focus more on being able to establish what is and what is not a good deal instead of what deal can you get into for low or no money down. 

@Recia Davis

As others mentioned, the relevance is going to be how many total units that the 40 are part of.  If its 40 units in a 50 unit complex, that is a completely different scenario that 40 units in a 240 unit complex.  Controlling/voting interest will be defined by what the Condo docs say. 

@Robert Laird

Do you know what their parameters are for wanting to do HMLs for MHP's ? Are they looking for certain regions? Certain park sizes? Certain utilities?   Is this something they are currently doing or just talking about doing?