All Forum Posts by: Chris Reeves

Interesting concept - anything which increases viable options for getting homes in parks sounds good. Who does the underwriting - the park owner or the lending company? Would this company bring homes to the park like the cash program does - prior to the sale? Also - I'm sure this lender is familiar with Buffett's program but this structure is obviously a little different.

Both Buffett's program and this theoretical program you are detailing put some of the park owner's skin in the game - but Buffett's is structured differently. Buffett puts the park owner on the hook by making them responsible for purchasing the home on a depreciated schedule if the home buyer defaults.

In this program you are discussing - who takes title to the home in the event of a default - or have they not worked out those details yet?

Although actually, if that place runs at 30% expenses (since the tenants are charged for their water), then $34,000 NOI does sound possible on a GSI of $48,000, which is what you have now. Could work.

@Janene Tompkins - please give us the seller's numbers in detail - there are industry standard metrics for calculating NOI. If a seller is WAY off those rules-of-thumb then something is fishy.

Hi Derek,

You have not given us enough information to answer your question - you seem to be quite worried without having the data. Do the following research, then get back to us:

1 - Find out how much the other company is selling their homes for - the full range from cheapest to most expensive.

2 - If you haven't run test ads in your market yet - do so. If you have, tell us what the results are.

3 - What is the unemployment rate, the average 3 bedroom apartment rent, the city and the metro size for this city? What is the vacant housing rate? What has been the growth in population for the last 10 years? How diversified is the population? What is the median home price? You can find out most of this at bestplaces.net

4 - I would re-do your cap rate calculations based on a $20 lower lot rent - unless your location is much better.

Lastly, in the long run if you have growth and the other guy fills his parks to capacity there is probably room for both of you.

Now run along - answer questions 1-4 and then I'll try to help you.

How are you getting $34,000 in NOI on 20 rented lots in North Carolina - even with $60 per rented lot for water? What are the lot rents?

Please give us the lot rents and also the pro forma P&L's given to you by the broker - this doesn't smell right.

Hi OP - Frank Rolfe's due diligence manual is worth $2,000 not $200. No, it isn't just a list of things you can find in a 2 page blog post - real estate is a lot more complicated than that. And yes, MHP's are a unique asset class. There is zero fluff in his book - absolutely none. It is 200 pages of extreme detail with a logically oriented 30 day plan of due diligence.

I know there's a lot of BS in the real estate guru industry - this is not part of that world of BS.

MHP's a unique niche and there is no other source of solid due diligence info. It isn't the same as apartments at ALL - and I am someone who comes from multifamily and is transitioning into MHP's - I know.

You don't need to buy it but you are being extraordinarily penny wise and pound foolish if you really have a MHP under contract and you don't want to spend $200 to make sure you don't buy something and make a huge mistake.

 All good advice - thank you. They are claiming they only do one year contracts with no trial periods. Someone on another forum told me they will in fact do month to month at a higher price. We will see what they say.

Costar quoted me $2,145 per month today for nationwide access to their Market Analytics package - which is essentially the "whole enchilada" - encompassing all of the following individual products: Property, Comps, Tenant, Portfolio Strategy, Lease Comps, Lease Analysis and Go. This pricing was for one or two seats.

Anyone know how negotiable they are?

Well thank you all very much for the insight - obviously I needed an education on that topic! I was clearly ignorant in my assumption that syndications have fixed end dates. The flexibility several of you described obviously fixes that issue.