All Forum Posts by: Brendan Hula

Hello BP Community!

We're looking at acquiring a small mobile home community (~70 pads). The roads are currently gravel and I'd like to model in some capex for paving the roads once acquired. Is anyone able to share any rules of thumb for ball parking expected costs and scope of work?

Thank you!

BH

Thank you Yonah! 

LOL, yeah, I kind of spammed this question across BP & MHU. Very impressive your name came up on MHU as well as the recognized expert in this area. I really appreciate you taking the time to  answer my question and also sharing it across the two forums for the benefit of the communities.

Brendan

Hello BP Community!

I am working to acquire a portfolio of manufactured housing communities and have a few questions regarding depreciation I was hoping to find answers to or be pointed in the right direction. My questions are:

1. Other than the land component, is the infrastructure at the community (roads, pads, water & sewer lines, etc.) eligible for depreciation over a 15 year period? Would Park Owned Homes qualify as personal property and be depreciable over a 5 year period?

2. If the above is true, then would these items also qualify for the Bonus Depreciation rules and be 100% depreciable in year 1?

3. What are the allowable deduction limits? If the year 1 Bonus Deprecation exceeds the deduction limit are you allowed to carry forward these deductions in subsequent years until they are exhausted?

4. We have a group of investors, I'm assuming the depreciation benefits can be passed-through to this group in order to offset our cash distributions. Is that correct?

Thank you,

Brend

To piggyback on this thread, I had a few questions I was hoping the group might be able to help answer or point me in the right direction. I've tried speaking with the IRS directly as well as researching online but haven't had much luck finding answers.

I am working to acquire a portfolio of manufactured housing communities. My questions are:

1. Other than the land component, is the infrastructure (roads, pads, water & sewer lines, etc.) eligible for depreciation over a 15 year period? (Based on this thread, sounds like the answer is "yes"). Would Park Owned Homes qualify as personal property and be depreciable over a 5 year period?

2. If the above is true, then would these items also qualify for the Bonus Depreciation rules and be 100% depreciable in year 1? 

3. What are the allowable deduction limits? If the year 1 Bonus Deprecation exceeds the deduction limit are you allowed to carry forward these deductions in subsequent years until they are exhausted?

4. We have a group of investors, I'm assuming the depreciation benefits can be passed-through to this group in order to offset our cash distributions. Is that correct?

Thank you,

Brendan

Very helpful, thank you @Rachel H.!

I"m going through now and reaching out to various brokers I can find that specialize in MH / RV. Would you happen to have 1 or 2 you'd recommend? 

 

Hello BP Community,

I am considering an offer to join a small shop where I would be responsible for the acquisition of manufactured housing communities and RV parks. 

One of the biggest initial challenges in this role will be establishing a deal pipeline. To expedite I'm wondering if wholesalers exist and are active in this asset class? If so, does anyone have any references or contacts they would be willing to share? As background, for our initial investments we'll probably be focusing on deals in the $2M to $10M range. 

Thank you.

I appreciate the helpful responses and thank you for the insights Jon & Curt!

Hello BiggerPockets Community,

I'm a new investor, although I've worked in institutional commercial real estate for a number of years in the Asset Mgmt & Development groups at a few large REITs. 

I'm currently reading Brandon Turner's "The Book on Rental Property Investing" and had a few clarifying questions on the BRRRR strategy described in the book that I was hoping the community could help with. I would appreciate any input or advice the group has on some or all of the questions below related to the BRRRR strategy: 

-How likely is a bank / traditional lender to refinance a property if it's owned by an LLC? Assume the property is a 2 to 4 unit that was purchased for cash, has been renovated, is fully rented, and asking for a 70% LTV. I'm wondering if the LLC ownership would be a non-starter for a traditional lender, even if the property is fully rented and cash flowing.

-If a property is purchased via cash and renovated, is there a seasoning period (ex. 6 months) before a lender would agree to finance / lend on the property?

-What strategies have been successful for individuals in terms of lining up traditional lenders to agree to refinance the property post rehab and rental, prior to the initial purchase? Basically, have you been able to line up refinancing down the road prior to making the initial purchase and undertaking the rehab?  

-Any advice or helpful tips for coming up with a realistic after-rehab value (ARV) and an accurate rehab budget that's necessary to drive the expected ARV?

-Lastly, if you purchase a 2-4 unit multifamily, for the refinance will the traditional lender base the valuation on the NOI / Cap Rate, as you would for traditional commercial property, or will their valuation be based on comps in the market, similar to residential / single-family properties?

I know this is a lot so appreciate any help / guidance the community is able to provide. Thank you!