All Forum Posts by: Ian Tudor

I'm 29. I invest in manufactured housing throughout the Southeast. We have participated in 10 deals worth about $20M. It hasn't been easy, but this business isn't complicated. Good deals are harder to come by today. 

Ryan, my business partner, puts out a podcast.

I post regularly to LinkedIn. 

Manufactured housing is the most affordable housing available, meaning there is a large demand. 

We use rent manager now! We love it.

I wouldn't use a realtor unless you see the need. Most realtors don't know a thing about mobile home parks. If it make sense on paper then I would close. 

@Yvonne H. - It should be based off the income approach. 

What year are the trailers? You could sell off the homes to the residents and collect lot rent. I have homes in the early 70s that people are still living in. You would be surprised how nice a older mobile home can be if you take care of it. Usually it will always be cheaper to renovate existing than to bring in new or used homes unless it is burned down or destroyed by a tornado.

I would consult with the manufactured housing organization of the state. It is usually a group that supports the industry and will help recommend certain vendors, lenders, etc. Some counties try to make it impossible to replace homes but that isn't legal if you have the correct zoning. I have heard of people that have challenged those proposed rules by the county and won. If you want the park, I would dig deep in due diligence and see if there is any merit to what they are saying. 

Mobile home parks are NIMBY at its finest.  

@Shweta Patel - Hey, I own a few parks in the Southeast. Park seems a little pricey given the size. How much is lot rent? 

Your best bet will local bank financing. I wrote a post on LinkedIn recently helps people with getting loans from them. 

@Joel Florek - is that an 10-12 cap with upside or stabilized?

@Sarah Pursell - the biggest thing is to set boundaries. Let her know what you will tolerate or not. When my tenants try to yell or demand unnecessary things from me, I let them know this isn’t how we will be communicating.

It’s no different than any relationship. I wouldn’t be afraid to lose her and let her know that. Once people realize you have more options and you have leverage the conversation changes.

@Kellen Driscoll - Homes are rented for $650 and lot rent at the park across the street is $600. Lot rent as in the tenant owns their trailer and pays to rent the dirt. Is that correct? What else is included in the lot rent?

Most newer MHP investors aren’t fans of POHs but the truth is the Southeast is full of parks that have some component of POHs. You won’t be doing many deals if all you plan to purchase is lot rental parks. Also the returns will be considerably lower. It’s way easier to manage and less room for improvement unless they haven’t raised rents to market, which does happen from time to time. POH parks usually have the most upside if they are mismanaged.

So, if you sell off all the homes for a reasonable price ($5,000) and peg lot rent at $500, then you could buy down your basis a bit and reduce operating expenses considerably. With 29 homes sold at $5,000 and $500 lot rent, you should be between a 14-15 cap. I’d say that is a win. This is assuming you are in a decent location, not the middle of nowhere.

Yes, it will be hard work but I would definitely consider if you have the capacity to make this work. FL is a little funky as well because parks have a prospectus that you have to abide by. Read carefully as they can deter you from certain actions.

@Ashley Wise - Hard to understand what you are asking... can you clarify?

In general, bigger is better because you achieve some scale advantages with management and operation efficiency.

@Joseph Charles - Debt or leverage is the beauty of real estate. However it can your worst nightmare as well. Debt merely amplifies what you already have. It shouldn’t make or break a deal. 

My theory is to value deals conservatively with no debt and if the numbers make sense it will only get better with debt. 

Non recourse debt is better than recourse, but I wouldn’t be scared to use it recourse for a good deal. I use plenty of recourse and I have thought deeply of transitioning to non recourse. There is a point where recourse debt will have a diminishing return on your ability to grow. If you are just starting out you are likely far away from that. 

I know you are looking for an exact answer and this will depend on several things. I don’t have that for you. First purchase a few good deals and then reevaluate.