All Forum Posts by: Daniel Brown

You could do a Master Lease with Option deal, but that won't work when the turn-around is based on filling lots as you can't get accepted into the CASH program from 21st unless you are the park owner. All you can do under a Master Lease is to raise rent, billback utilities and cut costs -- which I don't think is going to be enough to get the job done.

If the seller already has debt -- and agrees with this strategy -- you could see if you could assume their existing mortgage and have the seller carry the rest at zero down.

Or you can wait for the owner to default and then buy the park from the bank.

That’s a great idea about assuming the loan! I’ll have discuss with her to see if that’s even an option she wants to try.

As for the Cash program with 21st, do they work with first time park owners? Or do you have any references I could look at so I don’t bombard you with questions. I really appreciate you taking the time to answer.

Side note. Love your podcast!

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Originally posted by @Frank Rolfe:

13 occupied lots x $200 x 12 x .5 = $15,600 which will obviously not even remotely cover the mortgage. However, if you were to fill it to 46 x $200 x 12 x .6 = $66,240 and could sell it at an 8.5% cap rate at that point = $779,294. So you can't say that the deal does not have potential, but you have to address the realities:

1) The seller will HAVE to carry the financing -- no bank will touch this.

2) The seller will have to structure the note to match the park's cash flow, which means low rate interest only in the early years, and probably zero down since you need the capital to make repairs.

3) To make sense of this deal, you'll need to do market comps and the lot rent in the market needs to be around $300 to give it the extra value boost you need to make it compelling.

In these type of "heavy lift" turn-around deals the seller is going to have to be an active participant in the way it is structured. If they think this is going to be an all-cash, bank financed deal, they're crazy.

The Man, myth and legend himself! Thank you for responding. I really appreciate it. You articulated exactly what I was thinking. I was afraid of bringing all cash to the table due to the amount of work that needs to be done to the park.

She has expressed that she can’t do any kind of seller financing due to the loans she has on the property. I was thinking about partnering up with her to turn around the park and then refinancing her out of the property once it made financial sense. Not sure if I could do that.

Also, how would someone go about filling those pads up? I know homes and hook ups can be pretty costly. Thank you again for responding!

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Good morning BiggerPockets! I find myself needing some direction. Ive focused on Self Storage and MFH over the last year or so. So to my surprise, when one of my letters was responded too for the sale of a MHP instead of Storage. I thought I’d entertain the idea because who doesn’t like a deal in any space of real estate right? So speaking with the seller here’s what we have.

46 pads

22 homes

13 rented

Lot rent is 200 a month

The park is city sewer and water.

Tenants that are currently renting do pay their own utilities.

The park was built in 1976.

The price she wants to sell at is 385k. She will not budge off the price. Demographics in the area are solid. Population growth is stable. Median income is around 52k a year. More than one employer in the area.

This park is very mom and pop run. She currently does all the financials on a note pad. No P&L or rent roll. No advertising. Park itself is in pretty good shape and right now the street from a couple schools.

My questions for all you savvy MHP investors is this:

1. Is this a potential deal?

2. How would I fill up those empty spaces?

3. Can this be ran remotely?

Thank you in advance!!

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I’d be willing to help! Also, what are you doing to find deals? Direct mail? Cold calling? Networking with other investors in your area? Networking with other agents? There’s a ton you can do for sure!

Originally posted by @Mason Aulsbrook:

I’m fairly new to the Real Estate side. I currently buy and sell mineral rights in Oil and Gas so somewhat similar. I cannot seem to find decent deals in my area for rentals or flips and I’m unsure if it’s me due to lack of experience or if it’s just my area.. I was wondering, is there anyone that might be willing to analyze some properties with me to show me what I’m missing? That maybe to much to ask but all you can do is say no :). Thanks everyone!!

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@Zach Quick:

You’re probably right. In your experience, when sellers are over priced, what do you look to do or say to have them understand the actual price point of their facility?

P.S. loved your podcast episode on Self Storage Income with AJ Osborne! If you ever need any help, I’d love to lend a hand!

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@Ron Todd:

You are absolutely correct. The numbers don’t lie. In his case, he wants triple! I’ll explain to him again and try to put him down gently and hope that he understands. Seeing 2 million in value is promising. Thanks for the luck! I’m gonna need it!

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Thank you for the reply! I believe it’s worth for the income he currently has coming in around 2.6-3.5 million. He could have other income like uhaul, boxes, etc that he could be selling. So from 7 million to 2.6 is a major drop. That is my dilemma.

Originally posted by @Theresa Harris:

How much do you think it is worth? If you are far apart, you are unlikely to reach a middle ground. If you aren't that far apart explain that with the current income, the numbers don't work and outline how you arrived at your number.

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Good afternoon BP,

I’m kinda in a pinch here. I’m starting negotiations with a mom and pop seller of their 89k sq foot Self storage facility. The seller is at a hard price of 7 million for their facility.

The facility is in a third tier area or tertiary market. Population is around 140k. Demand is at 7.8 per sq capita.

His rates are way under where they should be compared to the market. 2 major competitors in the area are 50% higher for one and 100% higher for the other in terms of rates and they are full. I ran the numbers I believe his price should be set at 2.6-3.5 depending on what the cap rate usually goes for in this 3rd tier market.

My question is, how can I help him understand that his price is extremely high without offending him or insulting him? He’s absolutely interested in selling and I’ve built good rapport with him. I don’t wanna destroy that rapport by offending him about his price. Any helpful tricks or tips would be great! Thanks in advance!!

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Why doubt yourself? Are you tracking your numbers? Are you getting the returns that you want? Look over your portfolio and analyze those numbers! Numbers kill emotion. If your numbers make sense then who cares what someone else is doing. 😎

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All Forum Posts by: Daniel Brown

Daniel Brown has started 16 posts and replied 126 times.

Post: Mobile home park Deal or no Deal?

Post: Mobile home park Deal or no Deal?

Post: Mobile home park Deal or no Deal?

Post: Trouble finding properties

Post: Negotiations with a seller

Post: Negotiations with a seller

Post: Negotiations with a seller

Post: Negotiations with a seller

Post: Negotiations with a seller

Post: Doubting my C class rentals