All Forum Posts by: Ian Tudor

@Keith Meyer - A few of my transactions in the past year:

Asheville, NC - $16K

Spartanburg, SC - $11K, $22K

Durham, NC - $17K

However, all of these deals had some form of upside as in bumping rents and cutting expenses. We moved a home into another for $1,000 and sold off 20 homes in another. Therefore we bought down our basis a bit. I like to look at price per pad on my initial buy and then exit. It gives a good gauge of reasonability. 

I'm way more interested in unlevered cash on cash return in year 2-4 after the improvements have been implemented. It is easier for my mind to grapple with. In this scenario, I can compare to other investment types to determine if it a good investment given the risk profile. 

@Tyler Weinrich - Valuation of real estate is an art. One person's opinion of value doesn't mean you are overvaluing the asset. Mobile home parks are an unique beast in terms of real estate. There are several ways to value park-owned homes vs lot rentals. Appraisers aren't necessarily up to speed on the nuisances of the industry and can mis-price the asset. First, you need to determine what return you would need to purchase the asset. Once you determine that look again at the financials and decide if it fits your criteria. If so, then pull the trigger and buy the property.

Recently, I purchased a park and the appraiser said I couldn't get above market rental rates because no one in the market was able to do so. In the past 3 weeks, I've sold over 20 mobile homes at above market rental rates. Sometimes a person who misprices, is an opportunity to make a lot of money. 

@Paul LaSpina - the answer is it is possible. I’ve done it twice. One deal was over $10M. I put up $0 and have equity in both deals as well as a cash finders fee. Here is how I did it, maybe it can work for you. 

1. Network before you need it. My business partner and I reached out to many experienced operators. Some never responded, some did. Both deals, we had spoken to the operators multiple times on the phone before we pitched them an opportunity. My business partner even spent half a day with one to better understand his business. 

2. Understand how to value real estate properly. If you have a good deal and you know people’s buying criteria then you have a fighting chance. 

3. Both deals were off-market. Don’t send people highly marketed deals. Value was bringing them to an opportunity they wouldn’t have otherwise found. 

4. If this is the path you take, you will give up control and upside for the deal. Experienced operators will make you a minority passive partner. But it is a way to get started. 

@Jon Dorsey - You will definitely still be profitable at $2M albeit less than you may want.

Are the utilities public or private?

Stabilized deals in this market are trading at 8 caps and below. Assuming no issues, the park is a glorified baby-sitting job. There isn't much to do, which is great. However, most people want this type of park and that pushes down the returns. 

Is this a widely marketed deal? Or is it in a well-populated area? Most deals like this in the Southeast go under contract in very quick order. 

There are several different types of meters. Next week one of my parks will be sub-metered with manual meters.

Manual read sub-meters are around $400/lot. 

The remote reads are more expensive. 

There are drive-by meters where you would setup software on your computer and drive past the meters and it will collect the information. This $625/lot + 1 time software charge of $4K.

The last one is a meter that backs up to the cloud. Total cost is around $850/lot. 

I pulled this info from a few quotes I recently received. The contractor specializes in sub-meters and came highly recommended from another large scale operator. There might be some better pricing out there but this is the best I've seen.

One of my goals for 2018 is to get onto the BiggerPockets podcast. I’m sure a lot of people are interested in doing the same. 

A little about my background, I started investing in mobile home parks in 2016. I had little money and no experience. I was still working a full time job. My business partner and I started building a database of park owners in late 2015 and reaching out to anyone remotely connected to the space. We found deals through pure determination. I jumped off full time into the business before I could afford to do so. I lived with my friends parents for 10 months. We sleep at our parks during the week to accelerate the turnaround. Today, we are in 5 deals totaling over $13.5M in deal value. 

We started just like everyone else. We had a dream and worked every day towards it. In the past few months, we have started to gain some traction but that was only after 2 years of grind. It’s all possible if you are willing to put in the work and find the right strategy. 

Feel free to ask any questions on how I can help you achieve your goals. 

@John Brinkos - curious - where was the park located 

@Jason C. - Good question. 

I'm a minority partner in 5 mobile home deals totaling 655 units. 4 of the properties, my business partner and I directly manage. These opportunities are in NC, SC, and GA.

I purchased my first in 9-2016. Hopefully going to push above 1,000 units in the next few years. :)

@Chase Gu - you can’t find a deal if you aren’t looking. It could take a considerable amount of time to find a good deal but doesn’t mean they don’t exist. 

@Jorge De Jesus - as a syndicator, you have a few jobs. One is to find and purchase a good deal. This includes deal negotiation, due diligence, obtain financing, and pushing through the nonsense that inevitably comes along with real estate transactions. 

Now that is start but the real returns are after you purchase the property. Operations is where the money is made if you bought at the right price. Several people outsource this responsibility, but it is still crucial to hit your budgets and projected turnarounds. 

This will position the property best for sale. Usually you have a time frame for the property. Execute on the strategy in order to fetch the highest exit possible. Market conditions obviously play into this but on a micro level you still have control of the property specific metrics.