All Forum Posts by: Cory H.

The thing to do is call your P & Z official and discuss your plan with them. They will be able to give you an answer.

If your park is actually conforming and zoned for it you might have a chance. If it's legal non-conforming... Not so much.

We went partway through the process of adding 9 lots to a 51 lot MHP in Michigan. The key was that the park was actually zoned MHP and was compliant with all current zoning and setback requirements. We ended up selling the park before we could complete the addition.

Another thing to consider is infrastructure. Are you on private well, septic, or wastewater treatment plant? If so, you'll need to look at the capacities of those systems to make sure they can support the extra units.

Good luck!

I've worked with them on a past park, and want to again.

Big advice though: Make sure to do good DD on the location and run test ads with the actual price you will be selling them for before buying a park that depends on this strategy to succeed. 

if your new home is $50k, your pad prep is $15k, and CASH wants you to sell the home for a 10% profit, you are over $70k for a purchase price. There are a lot of markets where it's hard to sell mobile homes for that kind of money

I  should know, I screwed this up--should have attended Frank's boot camp earlier in my investing career :)

Even though it's zero out of pocket for you, it's still a loan. If it doesn't sell in a year you're on the hook. 

You can turn it into a rental as a plan B, but you better make sure your can rent it for enough to cover the debt service--in addition to lot rent.

Basically you should treat it with the respect that a 100% LTV loan deserves and do your DD

In a very strong market I still think this program is rad, just be careful and maybe consider their used home program if the park is in a weaker market.

Good luck!

 I was driving through Idaho City recently and noticed this place! Tiny home resort full of STRs!

I don't know much about it, but it looked cool!

We're more concerned with the return the park will generate than the cap rate going in. For us the cap rate is more useful in estimating the future value based on where we can take the NOI.

That said, the higher interest rates are definitely making things trickier.  Seems like everyone still wants the same price they could have gotten when rates were less than half of what they are now.  Seller financing--with the right terms--can certainly help boost our offer prices...  

One other idea--this is how we got our last organic move in--is to look at the news or ask your MHA for information on any parks that are closing soon.  You might be able to help someone who has nowhere else to move their home, AND fill a lot with a new resident.  I love win-wins!  

Save & invest half!

@Jesse Stein

I found myself dealing with the same refi vs. sell dilemma on a couple small mobile home parks I bought in a rapidly developing area.

I love the idea of refinancing your money back out, as you can keep a cash-flowing asset you're familiar with and recycle your capital into the next deal.

The key phrase though is "cash-flowing". The refi stopped making sense when I could get such a high sale price that it would be cash flow negative if I tried to refi for 75% of that value. Once cash flow—instead of property value—becomes the limiting factor on how much you can refi out, it's time to sell.

As for buying out of state, it's not as scary as it sounds. Just get some good team members in the area you want to buy.

Good luck!

Welcome to Boise!  I'm a structural engineer—not quite civil, but close—and real estate investor in Boise.  I love nothing more than chatting real estate over a beer... Shoot me a PM if you want to meet up sometime!  

Cheers!

Cory

40+20=60

8+7=15

60+15=75