All Forum Posts by: Mario Dattilo

Casey we own in MN. Happy to help. 

You want to own the land and the tenants to own the homes. This keeps you maintenance costs down, labor costs down, and makes the property marketable to investors who understand the industry. Lenders want to lend on real property and mobile homes are chattel (personal property like a car) making park owned homes something lenders are not attracted to. So financing becomes much harder with a high percentage of POHs. When valuing a park with POHs just calculate the income that would come from the lot rent portion. Then if you have to put a value on the homes use a number that you could fire sale the home for to make sure you didn’t overpay. Hope this helps. 

Before you do any of these or put effort into them you should consider zoning law and code. Tiny homes are not the same as manufactured homes, I believe they fall under RV so the zoning needs to allow it. 

Your farm idea is cool but again there are normally ordinances around farm animals. I’m sure that’s why you said 20 mins outside of town.

Not discouraging, Just some things to consider. I love the creativity!

Craigslist, Facebook market place, mhvillage, newspaper and online newspaper, website and google business page. 

Hey Allen, rent manager is the ideal software for mobile home parks. That is what most use. They have payment integrations that allow your tenants to do direct withdrawal, online CC payments, and they can also go to Walmart or other retailers and pay with cash or check and it gets deposited into your account and best of all it’s applied directly to their account in the software. I highly recommend it. If you have a small park and don’t plan to buy anymore you could look at appfolio as another alternative that charges by the unit. RM is by far a more robust software specifically built for MHP. Hope this helps. 

So that is a very logical way of looking at it. The issue is that it was never valued based on the home portion of the rent anyway. To protect yourself from big losses you should value the park based on the portion of rent that can be allocated to lot rent and if you have to value the homes then value those based on shell value or what you can comfortably sell them for. 

Typically lenders, appraisers, and sophisticated mhp investors do not value the home rent cash flow. So if you’re financing it going in your business plan to the bank will show your sell off plan. 

Lenders lending on MHPs want to real estate as collateral and MH’s are not real estate they are chattel similar to a car or other personal property. 

If you’re seeing a lot of parks with all park owned homes it’s likely the geographic area you are looking. Parts of the southeast have high concentrations of POH communities. Before buying one with the plan to convert it to TEnant owned homes make sure the market will support the lot rent model as many don’t. The 2 main reasons for POH communities is the market or the owner doesn’t understand and just wants the higher rents. They miss the points stated above about value and the fact that it is much less marketable as a POH community. It’s also a lot more management intense and your expense ratio is higher, similar to an apartment building. In that case you would rather own an apartment building. 

I do not have a referral in that market and maybe someone else does. I would recommend putting together a basic package about the deal and you as the sponsor and start dialing for dollars. Start with the lender that is currently holding a mortgage if there is one. Then make a list of all the banks in that market and surrounding and start calling. 10+ when you are just breaking into the market. Don't waste time educating any banks that are negative or not knowledgeable about MHP. Throw all the contacts in a spreadsheet and followup with the ones that seem like good potentials with your package. Start when you are wrapping up the LOI or contract and don't wait. You might want to call a few sooner to gauge terms for your underwriting. Plan on something around a 20-25 year am, 3-7 balloon or ARM, 70-75% LTV (might be able to get Capex financed in at same LTC) and rate will vary but between 3.75-5%, full recourse. This is going to be a local or regional bank loan for this size deal. If it was bigger you could engage a commercial broker. Hope this helps.

Hey Allen! They don’t usually look for empty lots. You need to buy the homes, bring them in, set them up and sell them onsite and ready to move in. As you know people can not visualize and usually need to move In 30-60 days. Right now the new home backlog is typically over a year and used homes are hard to come by. Start placing orders immediately after closing to get in the pipeline for delivery this time next year. when filling lots, think of yourself as a developer/builder and after you sell it think of yourself as a for profit home owners association. 😉
Hope this helps. 

Of course Jason. Connect with me in a PM happy to help and can point you in the direction. Of addition sources beyond just bigger pockets to learn. Of course BP is always a solid place to start. 

Happy hunting Jason!