All Forum Posts by: Mario Dattilo

PM me and let’s discuss what you have. We partner with others on MHPs and also buy contracts from people too. 

We will buy this. Texting you now.

The truth is there is a huge need for good 3rd party management in the mobile home park industry. There are very few and the ones out there tend to produce poor results. We have considered managing for a couple owners when they have had communities in the same region as ours but typically I tell people they should expect to build out their own management team when getting in this industry. Regardless, even if you do find a management company that can perform you should still expect to handle project management and asset management responsibilities. Typically turnaround parks are heavy on project management and capital intense when infilling lots and that is something that is going to be hard for a 3rd party manager to execute like an owner would. I have some MHP resources in my profile you can check out if you are looking for more. Hope this helps.

Hey Ryan! Make sure to value the property based on occupied lots only. It's taking a while to buy new and used homes and get them into your park.

Here is the calc:

total occupied lots x Lot rent x 12 x expense ratio .5 (this size deal is going to be 50%) / 8% (let use that due to interest rates going up) = value

You will need to figure the single family home rent at about 50% expense ratio too. You will want to renovate and sell the homes to start collecting lot rent. It is going to be up to you how much future rental income you're comfortable figuring into the value. Less the better. Check out my profile to some other sources that get a lot more in detail with valuing mobile home parks too.

Septic is less attractive than city sewer but get them checked out by a professional and see what condition they are in and you may be ok.

Hope this helps!

Mario

Congrats on the contract @Ethan Wilson ! That is not the lender I would go with. You should call every local and regional bank in the area or region. Sometimes takes calling 10-20 banks to get favorable terms. Without knowing your deal, we typically get 75% loan to cost (includes improvement $) 5-7 year fixed (aim for 7-10). 25 year am with relatively favorable rate from local/regional lenders on turnaround communities. Just closed one today with those terms.  

Being new may have a little weight on ther terms but I would not get quotes from 1 or two banks and think you have to take one. When they ask what you're looking for tell them the terms I stated above. If they are concerned with track record then consider JV'ing with an experienced operator with a good track record and balance sheet

Don’t try to educate lenders on MHP, sort through them and focus on the banks that have financed, understand them, and have an appetite for them. Skip the rest. 

Check out my profile for a couple great resources that will help with financing strategies. 

You can raise equity as well. If you have a preferred rate of return on that equity it will eat up a good amount of cash flow on a tighter deal but it is still a good strategy. As mentioned above, get a securities attorney involved before raising equity from investors to CYA. 

Go get it brother and reach out if you need more resources to get the deal done. 💪🏻

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.

Owned by the tenant... base it on the lot rent.

Owned by the park and rented... base it on the rent only and if you need to put a value on the home use a value that you know you can sell the home for quickly vacant (Shell value).

Vacant home... 1st assess if the home is salvageable and what it will cost to make it livable. If not then budget to demo the home. If salvageable, Put no value on the cash flow (because it isn't earning any) and budget renovations needed to get it sellable and then model in the same as you would a the rented home (lot rent at some future date + possibly some shell value if you have to). 

2 main lessons here... Don't value the cash flow from the home rent portion of income and dont over pay for the homes.

Hope this helps. Check out my bio for where you can learn a lot more about this asset class and PM if I can help in any way.

Your calc for cams is accurate.

about $150 each to installed. That is using our contractor for install, not theirs. Theirs are horrible. Monthly its $5.75/lot and that is passed through to the tenant.

We use rent manager for our property management software and it integrates nicely with it so billing is not difficult.

Metron is great except for their setup crews. Get your own. Hope this helps.

Mario