All Forum Posts by: Ryan Groene

welcome to BP.  and welcome a fellow Mobile home park investor.  

travel, legal fees, license, accounting fees, office supplies...this could included in your property management expense...just adding more line items. 

Some others could be bank reserves, your reserves, vacany factor, and also concessions/bad debt

agreed with @Neil Schoepp that this is a very low cap rate for a smaller park like this, and the typical industry norm is a 3 point spread to help when interest rise, all of your other metrics for investing....cap rates, cash on cash return, IRR will still work with the investment if you go to refinance etc.

With a smaller park like this and lot rents around $200...your going to want to not pay for too much upside(at least for me)...

Smaller parks can be a good opportunity for operators and if bought right, they can be a great options to your portfolio.  There is just a little less room for error when dealing with a smaller park as you don't have as many lot to absorb a vacancy or an increase in water usage(even if you can collect)..or some repairs to do etc.

Good job on negotiating them down so far...for me i will still have to go lower and look something like this....200*18*12*.5/.1=216k purchase price

I prefer to pay lower than this based on a smaller park and limited upside potential based on your observation of market lot rents.  

@Zach Elcott....if you purhcase these right and live close by...these could work out to be a good little parks based on lots rents above $400 a month.  Just keep in mind that on smaller parks...your exit strategy is going to be limited to a very few number of buyers, unless you own another larger park near by that you could lump into the sale....

It really depends on how many POH's these 2 parks have and at least private sewer(septic) which depending on which state your in...check EPA laws and see if they have been giving any owners grief on having a septic....make sure you can replace leach fields and do you due diligence on the septic.

Also, if its private water as well, your going to limit your resale as well...but it doesn't mean that this couldn't be a decent park.

I would assume a 40% expense ratio or higher on both parks, because they are smaller parks and on private utilites, at least part of it.

even with a higher lot rental amount, your still going to have a harder time reaching economies of scale at times depending on vacancy,. 

hope this helps

Optimal land usage for a park without getting too high of a density is between 7-12 pads per acre. Anything greater than that can be considered and is really dense of a park. If evaluating something like this be aware that even though it may be grandfathered in...the fire marshal can deem that the homes are too close based on safety concerns and rule that you can’t bring in new homes 

Happy Friday everyone.  

Post about what you think is the best thing about the industry and some not so great things about the industry

For anyone whom is a Mobile Home Park Investor or has thought about Mobile home park investing....Comment on this post and lets connect...

@John West...you can run it both ways, you can name the park if you have permission maybe...or just name the city with some general pictures of homes that look similar to what is in the park or what you'll be bringing in.

It depends on the market and the park, you want the ad to be accurate as possible to what you are going to bringing in and truest representation of the homes in the park...unless a senior only park, or 1 bedroom trailers....a family is going to look for the best school district for their kids..so be sure to name that as well..unless a truely bad school district.

Mobile home park residents still look for everything that a single family renter looks for as well in a market for their kids.

Anything from frank and dave, podcast by them, podcast by kevin bupp and charles dehart, also jefferson lilly and brad johnson podcast.

Trailer cash by jamie smith....runs elevation capital group with her husband ryan smith...they are responsible for a lot of funds in the indurstry

park place by tony ferris,

some other mobile home parks books as well. just google or look on amazon...

definitely consider it if it’s immediate upside that easy to do. Like raise rents and increase collections. Your cash on cash could be extremely high because your paying such a low down payment. Assuming it cash flows day 1.  

In the midwest ive been seeing anywhere from around 20k-30k or so.  But you have to consider your return that your investment is going to return and what your Internal rate of return is for the investment.

also a per lot cost could be higher based on a few factors, like did the property come with some extra POH's that were included in the sale price, was there a clubhouse, pool, was there any SFH, storage units, extra land, etc..

I was meeting with an owner today, and they were like your looking at about 20k per lot, but thats kind of a older way to look at a park.(words the owner used were this)

rents in this park were around 300.

I always consider what im paying per lot, and then look at the overall picture of the deal, as im sure you know that.