All Forum Posts by: Chris Ebert

@Cody Godfrey, sounds like a good opportunity. I recommend asking the seller what he believes the park is worth. That's your starting point. Every park owner has a # in his/her mind. No point in throwing out a # that insults him and stops the conversation right there.

@Matt Kauffman, without knowing the layout of the property, I would imagine the sum of the parts (e.g. - warehouse + garage + MHP + SFH) is worth more than the whole. One of the reasons is that you mention the area median home price is $179K. Even with a discount for being near an MHP, the home is 3,200 sq/ft, providing inherent value. Earning $500/month in rent makes the CAP rate of the home less than the overall CAP rate. That means the SFH is diluting your overall CAP rate. Disposing of that should raise the overall CAP rate of the asset.

@Kyle M., I would recommend being completely transparent with him. Show him your underwriting. Explain why you believe this investment warrants a return of X%. If your expectations aren't out of whack vis-a-vis an investment with a similar risk profile and opportunity cost, then he might understand where you're coming from.

@Courtney Johnson, while this might sound obvious, I think the short answer is whatever size investment you feel comfortable putting at risk that yields your targeted return. Your potential return on an investment is determined by many factors, one of which is economies of scale. For example, on a 10-unit park, can you compensate a manager enough to make it worth his/her time and effort? I am a firm believer in starting small to get your feet wet, gain experience, and not risk more capital than you are comfortable losing. I discovered quickly that I do not like park-owned homes. Had I purchased a 50+ unit park vs. a 12 unit park, with all park-owned homes, it would have been a nightmare. Feel free to shoot me a msg if you have any questions. Good luck with the process!

@Mike G. , I own or have owned 7 parks with lot rents in the 100's range so I respectfully disagree. There are a lot of these parks in the Southeast so if an investor takes that approach you are excluding a large pool of potential assets.

I'd avoid renting the homes and run your #'s to see if the deal stands on its own w/ lot rent only. You'll also want to include an expense for septic pumping. Will vary depending on size, age, etc.

@Account Closed, I'd put down the extra 5-10% to get a nonrecourse loan, but that's a personal preference.

@Account Closed, the deal looks good. Any room rent increases day 1? If the end # is the seller's concern then hit his ask, try to get him/her down on the upfront payment (25-30%) and everyone wins.

@Eder Aldana, @John Jacobus covered all resources that I am aware of. At the end of the day, nothing will replace actual experience. The approach that I took to investing in MHPs was to start small, get my feet wet, and not put too much capital at risk should the asset turn into a dud. What I learned from my first MHP is very difficult to capture accurately in a book (e.g. - dealing w/ tenants, police calls, etc.). It's a great asset class if you treat it as a business and understand the nuances of MHPs in particular.

@Jarrod Gregory, just a heads up, MHPs as a "passive income strategy" is a misnomer. Happy to discuss further. Just shoot me a DM.