All Forum Posts by: Howard Abell

These are just small problems that need solutions. Real estate is a business of finding solutions.  If your current credit problem has not been a chronic one but recent and hopefully short lived than speak to that with a manager and owner. Lot rent is usually under 500 a month so the burden is not as great as renting a full apartment. If you have never had an eviction, stress that with whomever you speak to. Worse case get someone who might co-sign on a lease and who has good credit. You can offer a piece of the return on investment as an incentive. Stress to the manager or owner that you have no intention (at the current time) of moving the home. This might give some comfort.  Good luck.

You need to do more research on the subject. Why would a seller finance you with no money down unless it had very little value? Seller financing is available but you have to search it out and understand what a seller would need for him/her to consider it. If you are asking the question about how much you need you probably either don't have enough or you need to learn more about it. No disrespect intended just a heads up to what you will find as you search for a mobile home park investment. This site, Mobile home university, Mobile Home Village are sites you can visit to get a good start.  Good luck.

What you need to do is take the time to create the details of a deal that buys the building in a partnership or joint venture with you. This includes the cost of the building, how much of a down payment is necessary, is there bank or sba or investor financing available. Next consider the rent that the business will pay and determine if that number will support the debt service, expenses and a sufficient profit to entice investors to want to be owners. Even if you own some portion of the building it should be beneficial to you to receive back your ownership portion of the buildings proceeds. The advantages of owning the real estate are there but you also need to consider that if your intended five year expansion might take you out of this building entirely than you need to consider the risks of having to find a new tenant or selling the building.

A few things stand out. The rentals are getting very little above lot rent and will bear a larger proportion of the expenses. That suggests raising the cap rate  above 10? You might comp the rental rates in the area for both lot and rentals to see if that is where the market is.

The stick built income will be gone but you do not say when. The fact that you have no public sewer and water and can be a big issue down the line. I will cut it short but I think you need to revise the cap rate you are willing to pay

You are confusing an amortized loan at 12% with an investment at 12%. Think of it this way: Your 36,000 of loan was partially paid back over the 5 year period so the principal was not a full 36,000 over the time period. If you had an investment at 12% that paid you each year 4320 times 5 years or 21,600, that would be an roi of 12%. 21,600 divided by 36,000 equals 60% divided by 5 years.

Yes, it does have a bearing on what you do and how you calculate price. What is the term of the lease? How many years left? if it is short term, say under five years then you need to factor in the possibility of losing the tenant. If it is more than five years you factor that in as well and determine what the relative risks are worth to you. Sorry I cannot add more as there are no formulas for deciding on this risk and values. Much has to do with location, quality of growth in the area, etc.

There are two forms of money that you might be collecting. The rent check is yours to do as you please but would recommend you speak to an accountant to help you keep track for many reasons. Then there is the security deposit money that you might be collecting and that is NOT your money and in most or all states you must maintain a trust account for those funds and they cannot be commingled with your money nor used in any way other than refunds or substantiated payment for damage or non payment at the end of the lease.

Are you saying that it has been on Loop Net for a year and you have not leased it in that time? If so, you might want to rethink your aversion to paying a leasing agent. Other than that you can canvass the neighborhood and talk to renters in other properties, Craig's List, Local print media other websites and last but not least is a huge sign giving some free rent to attract potential renters.

You can consider this property. Are the tenants on a month to month lease or longer? If on a month to month you may be able to give them a 30 notice of non renewal. I would read the laws in your state pertaining to this circumstance. You may also make a deal contingent on the current landlord doing what is needed (the eviction) before you close. At 50% of market value in a good developing area (your words) you should be able to lease it in a short period of time. The landlord should be able to get you in to asses the property with proper notice to the tenants. 

Good luck.

I do not believe that Mobile Homes or mobile home parks are a dying niche. It might be on a long term respirator but the opportunities that exist warrant a good look at the asset class. This is simply supply and demand out of a text book. The Feds suggest that anyone earning less than 30-35K a year should not be spending more that 5-600 a month for rent. In most locales that would buy you a one bedroom brick and mortar apartment.  A mobile home can rent for 500-600 a month for a detached 3 bedroom 2 bath home in decent condition. So, you can not build new parks for economic and political reasons, yet anyone reading the economic conditions at present realizes that there are millions of people stuck at the lower end of the economy. No new homes for a reasonable rent and a good supply of people in need is a recipe for a successful business. Also, show me a multi-family investment with out problem tenants at every level. Not many of those exist.