All Forum Posts by: JC K.

Right here and MHU forum. 

Does 21st CASH program for used homes also apply to homes not in a park?  

I would suggest comparing your analysis to the purchase of an existing RV park, if that's an option.  Most times it is best to purchase an existing bushiness than starting one from scratch.

Hard to see the appeal. Especially when you compare this investment to mobile home parks, or even just mobile home Lonnie deals. Have you done a market cap or COC analyst?

@Keith Hand, thanks again for your response.  I find your comment about managing more units being easier very encouraging.  It makes sense that once you have a system things get better.  Thus it is important to establish systems as early as possible.

Please don't feel that you have to respond.  You already answered my questions and I there is no need to beat a dead horse.  I wonder if you used the metric of "lot rent should be about 1/2 of rent paid for a 2 bd appartment" your TOH numbers would make sense.  

Best wishes!

I haven't done this, but I work in the construction industry and I think it would be very easy to build a foundation to a height, just below the frame, and then jack the home down to transfer the load to the new foundation.  I would leave an opening through the new foundation for access and then close it up at the end.  

You may want to talk to a local home mover.  Those guys deal with all sorts of weird things and can be a great resource.  They own jacking and blocking equipment too.  So maybe they'll even give you a quote.

@Keith Hand Thanks for providing an updated. It is always nice to learn how others are doing and to see other's investor's perspective.  Sounds like you are doing good and focusing on MHPs. 

Regarding POHs vs TOHs, I believe a hands on investor can make POHs work well to some degree. I think most MHP investors realize one of the best things about mobile home parks derives from economy of scale. The more lots the better.  That being the case, it is easier to foresee a situation where an individual investor owns (and to some degree manages) 400 lots with TOHs. However owning and having to deal with 400 POHs seems much more difficult. 

Another pro for TOHs is that arguably an investor needs less $ per lot on TOHs than on POHs.  Therefore, in theory it would be financially easier to acquire a large number of lots if an investor was able to purchase TOHs lots only.   Every situation is different though.  For instance, a savvy investor could recover a lot of cash by selling park owned homes. 

Regarding cheap and/or almost non-existing lot rent comparables, I find the rule of lot rents should be about 1/2 of what a 2 bedroom apartment rents for is an appropriate gauge for lot rents, provided there is reasonable demand. 

On the subject of small vs large cities, I own a park in a very small city and there seems to be sufficient interest from people that would prefer to own vs rent. So we are converting a few homes from POHs to TOHs.  In doing so, I hope to recover some of my original investment.  My experience is fairly limited, but it is easy to see how TOH residents are so much easier to deal with and better for the our small community than POH residents.  

Overall, more important than the number of POHs or TOHs in a park is finding the right opportunity.  It sounds like you acquired your first park at a good price and you had an experienced partner.  Hard to beat that!  Sounds like you found a formula that works for you, but I would love to get your take on some of the points raised above, assuming no significant regional differences.  Again, thank you for sharing!

@Keith Hand

Good question.  You could value this 3 different ways:

1) Income approach

2) Comps

3) Replacement value

In the income approach we generally look at lot rents only as I indicated above.  Then we add the value of the rental homes so as to not apply a cap to the home rental.  

In addition, it would be helpful to talk to the exiting residents and see how much appetite there is for them to own and to get a sense for their financial strength.

Hope this helps.

Even if you already owned the land and did the work yourself. Now you have to buy homes, move them, skirt them, etc. that’s easy $20K per home. 

Permitting of MHPs isn’t easy, nor cheap. 

Most banks won’t finance lot developments without homes. 

By the time you accounted for all these things it may be that buying an existing park, with paying tenants at $20K per lot is a much better option. 

Looking at this as a MHP:

Hard to see such high lot rent in a place "far out", but let's play with that and some other assumptions:

12% Cap, 9 Lots at $350/mth, 50% expense ratio (park provides water & small number of homes),  = $158K.  Add $180K for 9 homes at $20K /ea = $338K.  

Looking at this as 9 homes on individual lots:

???