All Forum Posts by: Linh Khuc

My partner and I currently use a mix of cold calling, SMS, and DM for direct to seller marketing. For us, DM is a long term play with larger spreads and the more proactive forms of marketing (SMS, cold calling) allows us to reach more sellers for less. In general for me it's just a numbers game and being consistent is what is most important!  Happy to chat with anyone getting started. (in the Kansas City market for context)

Just posting and sharing some of my experience and knowledge for this area. My business partners and I are local investors in this area and we do direct mail marketing and cold calling to get those off market leads in New Hampshire. This is working great for us and we use deal machine for our mailing of postcards. I wasn’t sure what to make of the capture rate or the success but we are seeing great results! We don’t keep any of these leads these are straight wholesale opportunities that we do with these leads as we are naturally based out of CT and keep buy and holds/ flips in that area. 

Hope to see responses and see what everyone else is doing that’s working in their market and exit strategies. Keep crushing it out there! 

That's correct. It's a one time deposit, then they will split your first $1million profit with you 50/50. After the split, they will refund your deposit. In summary, the program will cost you $500k in best case scenario and $10k in worst case scenario.

@Linh Khuc - Just curious what area in Illinois is the mobile home park?  I'd assume it's quite a ways from Chicago.

Caveat I am not a mobile home park investor.  Seems like this is a solid deal to me though.  85% occupancy and city sewer is awesome.

I've heard that you can find trailers to bring to your park and leaseback to tenants but also heard the leaseback can create unnecessary maintenance issues since you are now the owner of the trailer and not vice versa.

The most concerning issue I see at a glance is the fact that it is in the socialist state of IL. Chicago MSA is the highest risk but you are taking on unnecessary risk buying in that state. 

Some people are comfortable with it either because they already own real estate there or live there but we avoid that state along with CA and NY. 

*Get familiar with the landlord/tenant laws in that state regarding mobile home parks during due diligence by consulting with an attorney and determine if you can get comfortable with it.

Hope this helps! Check out my profile for some resources you can use to learn about mhp investing.

Although I'm a fan of the Midwest, there are several states that are much more "business friendly" as they say, so make sure you're comfortable with possible disruptions with local regulations going into any deals you do there.

Indiana isn't too far away if you ever get fed up :)

 Thank you for clarifying details for Rochelle, I called the listing broker and he gave me some additional info about the property:

- The reason it's reclassified from a 30 pads to 24 pads was the 6 pads located in the flood way which required to move.

- The water main does not compliance with the city and it's required to upgrade before 6 pads can be relocated and additional mobile home to move in, the current owner had a quote to upgrade the water main plus the pave roads is approx $200k. 

- Given it's reclassified from 30 to 24 pads, the owner cut the price for about $143k, vacancy from 9 pads down to 3 pads, after upgrading everything, we only need to fill 3 vacancy pads.

Given the listing price of this property is $355,000 plus $250,000 improvement (adding $50,000 buffer), the total is $600,000, total current rent is $7550/month, the numbers still look good, future vacancy filling and rent improvement would be an additional $2,000-$3,000/month. 

Do you see any concerns it's being located next to a water treatment plant ? 

According to Bestplaces, Rochellle has a metro population of 50,306, a median home price of $146,500, a 3-bedroom apartment rent of $1,043 per month and a vacant housing rate of 7.2%. All of those stats are favorable (although most lenders and buyers would prefer a population twice that size).

Gravel roads are a problem as most lenders hate them, and they will make getting a loan harder.

But none of these items -- by themselves -- are a deal killer.

You need to focus on how you scientifically are going to make money with this deal, using such tools as raising rents, cutting costs and filling vacant lots and homes.

At one time we were the largest owners of mobile home parks in the State of Illinois, and still own quite a few there. You probably can't bash the politics of Illinois enough, but the affordable housing fundamentals in Illinois are similar to all the other midwestern states. I would much rather own a really great deal in Illinois than an average one in Indiana. There are many components that go into any mobile home park deal, such as the infrastructure, density, location and price. While I agree that I would favor a "red state" park over a "blue state" one in general, that's not the main driver to whether to invest in Illinois or not. Of your description, the attribute I like the least is the "gravel driveways" as most lenders like to see paved roads, and I don't know if you mean gravel parking pads (roughly 20' x 20') or gravel roads to each home. Here are some of the things I think you need to get a handle on to better make a decision on this deal:

What is the metro population (you can get this figure from Bestplaces)? Most lenders want to see around 100,000 people or more. If there is no metro, what is the country population? Again, the bigger the better, so hopefully at least 50,000 or so.

What is the median home price from Bestplaces? Lenders like to see $100,000 and up. And what's the 3-bedroom apartment rent? Lenders want $1,000 and up. And what's the housing vacancy rate? Lenders like 12.1% or lower.

What are the competing rents in all other parks? Can you raise your rents accordingly, or is there little room to do so?

Do you have a credit source to bring in homes to fill vacant lots? Are you aware that mobile homes right now are costing $30,000 (used) to $70,000 (new) set up?

Is the city going to fight you on bringing homes in to fill vacant lots?

Only once you get it under contract, you should do a test ad and see what the actual market demand is for mobile home parks in this area.

You can apply science to any mobile home park deal, and that will help you make a good decision.

But as far as the Midwest in general -- and Illinois in particular -- we have been very active in those markets for 25+ years.