All Forum Posts by: Michael Meeks

I would try to owner finance the homes and remove the responsibility of home repairs. Find out the market rate for a mobile home lot, and collect lot rent. I assume residents are responsible for utilities. If not also work toward that.

you can also get window units with heat, if it does not have it.

Post on Craigslist you are looking for help. Stop using him immediately. Voice your budget concerns, disclose you have posted the ad. You will possibly find new resources, and/or this guy may change his tune, if he needs to keep the income.

Great Podcast Jefferson. You have the same insight to the opportunities in mobile home parks as myself, but I benefted from several tid-bits. It was great to hear a bank was willing to fund purchases of home inventory, to fill the parks. Great market testing ideas to verify demand. Odesk for bookkeeping may be a solution I need, entering receipts is so tedious. This is an industry I want to be heavily involved in.

Thanks Jefferson. I have followed Frank and Dave for some time, but haven't done the boot camp. It was actually material from them, that pointed out consideration of what you can push the cap rate to. 

Bob, I'm researching comps. Thank you again for the advice.

My initial offer will be at 10% cap based on verified revenue, expense, less the needed capital repairs. If negotiations come into play, my hopes are to get the deal with at least a 9% cap. I want to be careful not to damage the relationship, and not get the owner financed 2nd. I need that capital back to quickly push the occupancy up. I then Can create even more equity should I choose to sell. I can aggressively payoff the 2nd and realize a higher rate of return, once I gather down payments and additional revenue from the 6 homes I need to fill the lot. The demand for the homes is in place, bank financing for mobile homes in parks is virtually non-existent. It's a great value add opportunity, but basing my buy on current numbers. Do you see fault in my logic?

Thanks Bruce. That's very close to my analysis. I would like to be in around the 9% cap, equipped with the knowledge that just the $20 increase on renewals push me to around a 10% cap. Getting the last 6 lots filled pushes me to a 14% to 15% cap, and it increases annually. The owner financed homes not included in this equation will produce $30k+, in additional annual revenue. If I do have the ability to add a few more lots, the deal just gets better, if not a few storage units across the back maybe. Expenses I assume: Property taxes are under $1200/year (verified), 2 dumpsters ($350/mo.), 2 street lights ($25/mo.), no common water, no gas, business licenses ($50/yr.), lawn care of common area and vacant lots ($300/mo.), unsure of insurance cost ($400 - $500 per month guestimate), Capital reserves (3%), Misc. repairs ($100/mo.), paperwork-office supplies-miscellaneous expenses ($100/mo.), craigslist and my father being in mobile home sales will cover advertising needs. My wife is a seasoned property manager, and I am Director of Maintenance and Construction of approx. 10,000 apartment units. Potential capital repairs I see are a water or sewer line repair, asphalt maintenance/repair and fence repairs at dumpsters and property line.

Going back to the initial post. If your contract with buyer 2 required a deposit, and it wasn't funded, the contract wasn't fully executed. You should have sent a written cancellation based on his failure to execute. When he called you flipping out, you instead should have sternly defended the fact he failed to execute and you have proof, that you exhausted efforts to reach him.

I'm working on my LOI, for a Mobile Home Park. I've run some numbers and looks like their is a tremendous upside. I own a mobile home that I am currently owner financing in this park, and was approached by the owner some time ago about buying the park. I reached out to him last week and we are meeting early next week. It's owned by 2 brothers in their 60's and they are ready to retire. They recently sold their primary (salvage yard) business, so I believe they sincere in their reasons. So here are the details:

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Asking price: $410,000.00 (Owner already stated negotiable)

Owner is willing to do some owner financing - No terms have been discussed.

Park has 28 mobile home lots with sewer and water installed 2 to 3 years ago. Sub-metered. Looks like possible room for small expansion, but not verified.

22 lots are occupied paying $200/mo. lot rent. $52,800/yr.

Right now expenses are an assumption $1600/mo. $19,200/yr. Debt Service not included. I think that number is conservative.

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Upside: Renewals and new leases will be at $220/mo., and raised thereafter a minimum of $5 per year. Last increase was 2 years ago, from $180 to $200. I'm sure I can fill the lots with 6 more homes, and not only maximize the occupancy, but also owner finance the mobile homes for additional revenue. There is commercial expansion of stores and restaurants within 5 miles. One of the top school districts in the county.

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My thoughts are securing bank financing for the majority of the purchase. Purchase price somewhere in the range of $360k to $380k. If I can still get positive cash flow, ask seller to take back 2nd mortgage on all or most of my down payment. Reason is that down payment taps my capital, and I need the funds to bring the six additional homes, but I do have seasoned funds, to satisfy lender.

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Do any of you seasoned pros, have any advice or suggestions?

I have 2 mobile homes in different parks. I invested $11,000 in one, $14,000, in the other. I lease optioned, and was netting $1111/mo. Took $3500 down payment on the 1st, and a 2005 toyota camry as a down payment on the other. Both are in desirable areas. Tenants moved out of the first one after 2 years. My investment has been recovered plus some. Getting it ready for a new tenant. Mobile homes can be a great low cost start for a new investor. One of the park owners has recently asked me about buying the park, and said he would entertain some owner financing.