All Forum Posts by: Account Closed

I guess the first step would be to tackle the valuation of the park.  Parks are evaluated by three separate methods for each operation:

1. The land lease component is valued on an income approach. Your CAP rate will vary based on risk.

2.  The homes are valued at their physical value - do not take an income approach with these.

3.  Notes are given a discount rate.  This will vary based on time left to mature and the underwriting that went into them.

Next, you need to take an inventory of the infrastructure.  This includes the water, sewer, roads, electricity, gas, etc.

Then, you will need to take a look at the area.  City-Data is a very good resource for this.  You will want to look at unemployment rate, crime rate, vacant housing rate, apartment rents, median income, median home prices, etc.  On this part of it you want to statistically prove that the area is economically sound and that the homes in your park are not in competition with other forms of housing.

After that, I would take a look at your tenant base and market.  You will want to get a handle on the process the previous owner used to vet tenants.  This is especially important on your park owned homes and notes.  You will also want to do some test marketing throughout your diligence to gauge the demand.

Just to keep this from getting too drawn out, I could probably help you more if I knew a little bit about the statistics of that area, the resident break down (#lots, #occupied, #of POHs, #of notes, Lot rent amount, etc.), and breakdown of the utilities and who pays.  

I would contact a few surrounding counties and see if you can pay them for a list of mobile homes from their tax roll.  Also, in Pickens county, you can easily obtain a list of mobile home owners that are in parks.  Their personal property records are tied to the parcel ID.  Once you have a nice list, I would do a direct mail campaign and start drumming up some leads.

Curt is exactly right on this.  Invest the time in yourself and figure out a way to make yourself valuable to an experienced operator.  For me, I developed a system for reaching owners of mobile home parks off-market.  First, I learned the concepts of the asset class in a boot camp. Second, I figured out a way to generate a massive amount of leads, and third I sought out a partner who could help me convert those leads.  My partner benefitted greatly because I gave him no less than 30hrs/week for almost 2 years.  At present, we have acquired two parks.  My income off of those parks is close to $35k/yr.  Plus a $400k boost in net worth. We are in diligence on a third right now.  That one will push me into the business full time.  

Next up for him and I is syndicating.  We've placed all of our own money into home run deals (reason it took 2 years).  Now we are going to scale using the marketing machine we put together and take the next step.  (This is not his first rodeo in syndicating but it will be my first time)

None of these things would have been possible if I hadn't taken the first step and attended that boot camp.  It also wouldn't have been possible had I not figured out where I could add value or had I decided to venture out into this by myself.  

Rent manager is what we use for our parks.  If you call them up, they'll give you a demo and their customer support is very good.  

 You'll take the title to the dmv just like you would when buying a car. The county assessor would be your stop on the taxes. These are super easy transactions.

  This is a mobile home not real estate. You need to get a copy of a document called a bill of sale. It's basically 1 to 2 pages long and it's pretty simple to fill out. You also need to confirm that the seller has the title. You don't need an agent or attorney for this.

While I understand where Curt and David are coming from on the fee agreement, structuring the deal this way puts you dangerously close to being classified as a broker.

As an investor, I have the same preferences as both Curt and David.  I like to negotiate my own terms.  

If I were a wholesaler, I would prefer to take control of the deal so that I wouldn't get myself in trouble.  Having a fee arrangement likely isn't enforceable unless you are a broker.  If you get stiffed on this fee, then you may out of luck.  However, I've never wholesaled, or been involved in a wholesale transaction as either a buyer or seller, so this is just my amateur opinion.

Phone numbers can't be posted so you can probably just message me through here I'm guessing.

Feel free to give me a call.  We just closed on our 5th park this past Friday and I can probably help guide you a little.  Free of charge.

A great program on this asset class is put on by MHU:  http://www.mobilehomeuniversity.com/index.php

And, you can always look through their forum and find almost any topic you can think of: http://forum.mobilehomeuniversity.com

 Leverage is the key.  Aside from the principal destruction through time (time value of money) and higher returns, you also need to consider the tax advantage of leverage:

If you pay $150,000 for a property, then you get a depreciation allowance of up to $150,000.  If you use the $150,000 as a downpayment for $600,000 of property, then you get up to $600,000 of tax advantage.  Leverage generally provides higher returns in addition to a greater tax shelter.