All Forum Posts by: Ryan Groene

im gonna guess this is very rural georgia...

You can basically take their expenses and throw them in the trash....there not even paying general liability...which you pay for even if you don't have any parked owned homes....or at least you should buy it....

No way in georgia that they don't do some landscaping??

Biggest item unless direct billed water/sewer is that there isn't any expense for that in this line items.  

If there evicted people there going to have to pay for water/sewer at somepoint...even for a bare minimum.

You are correct that i wouldn't pay for more than what your looking at...even then getting a bank to finance may be hard ebcuase of this shady financial information on it

See if he will sell both parks and maybe see if you can get a better deal on both of them vs One park....you may have to buy a bad park buy you get a good park in the meantime....

@Brian Spear

@Mike G....if you went to the bootcamp and you follow that model...you know this is a bad buy.....unless this is in california or somewhere where the land is easily worth more than what your paying...but im not a speculator or in the raw land business....so my advice is very limited.

Advice....i would throw this deal in the trash and keep looking for other parks....keep them in your Rolodex of follows up's...but follow up in like 6 months and if they still haven't sold it to someone and haven't come down to real world prices..then just call them back in another 6 months.  

But what i think a park is worth and what others think its worth is different and can be based on your expertise, investment criteria, type of cash you have, and if that cash has a timeframe/deadline.   

one thing i would find out is what is the market lots rents? and see if they are high enough(like $500 bucks...) which could make this deal a little more attactive.

One caveat to this deal is that if you plan on running it like an apartment, then your valuation is compeltely different and maybe this pricing will work for you....which running it like a horizontal apartment is not necessarily the wrong thing to do if that model works for you...but keep in mind it may limit your exit strategy or ability to get financing.

best of luck

yea essentially that is whats going to happen...but term sheets are more deal specific.

They will basically provide you with a pre-approval letter based up to a certain amount...just like a traditional home loan.  

If you have real estate experience it will be easier for you to get a pre approval letter because it is technically commercial property.

Or you could just show the broker your proof of funds on the equity side and say your going to be buying with bank loan as well...so basically your LTV will be somewhere between 70-80%

You could do that...just depends on how your going to go about funding your deals.   if you syndicating or have an equity partner or two..and if you don't have any money to buy a type of property that your looking at...you may need to have that equity partner show funding as well.

Or if you have the funds...just show them that and that your 

This is just how the brokerage industry is sometimes...

Agree completely with you @Jenifer Levini 

and Frank rolfe will tell you that he doesn't know california and the formula's don't hold true there when evaluating properties there.  

midwest lot rents can vary depending on where you are....ive seen them as low as $125 a month in a major metro(really under market) and high as 500-600 range(chicago area) maybe higher in some parks there

not sure where this park is...but its could be right in line with market or under by 25-200 bucks...just depends

These parks can work...but the only way they can with this low of lot rent is if you have partner who literally lives within an hour drive of this park or you have another park that is larger within 20-30 min drive of this park and you can have a manager look over this park as well.

Or if you live in that area....

Smaller parks are great for getting experience but can be really hard to sell on the exit strategy becuase the time it takes to run this park....your better off with park thats about 25 spaces....6 spaces in the midwest is really hard to do...unless lot rents are apart 500 a month or so...because of the % per space is the same and your downside exposure if someone moves out is a lot greater % of your income vs a park that is larger.

hope this helps

Challenges of developing a MHP is primarily putting them in where there is enough demand to justify the large amount of capital that you are going to have to put up up front and hold over a period of time before you start to cash flow

Sam Zells company ELS has just started development on a 55+ community in Florida....it is a key area of where it can work and they have large amount of cash flow to support this type of hold...most people don't have this luxury.

Majority of other issues is the city...from a city standpoint MHP's just don't generate a lot of revenue for the city and uses up a good amount of resources dollar for dollar.  The revenue is the taxes from the Mobile homes, which is very small compared to an apartment or single family residence development.  Most of the time the best use of the land is not for MHP's, but something else.

More parks get destroyed every year than are being built..