All Forum Posts by: Mario Dattilo

I’d consider renovating before demoing but if they are not salvageable then manufactured homes (single wides) will be most economical. We are trying to work with whatever we have because order rulings are slow and pricing is high for new inventory right now. 

You can check out 21st mortgage, triad, and some other MH specific lenders to give you a credit line (floor plan line) or you could potentially use a bank or private debt to purchase them. 

I’d seriously consider saving what you have unless they are super rough. Make sure your buyers can afford the new home price point you will need to market them at. 

Hope this is helpful!

Sub $1mm loan will be with local or regional bank. Call around and prequalify all the banks in the area. Question #1 have you financed mobile home parks? #2 do you have an appetite for more? 

If either is a no then move on. Don’t try and educate them or sell them on it.

If you can get a broker to shop local/regional banks for you then it’s worth the 1% origination fee they will charge. If you use a broker use one that specializes in MHP. 

I have an entire YT episode about financing MHPs in the links in my profile if you want an in-depth breakdown. 

Expenses will vary based on utility types and who is responsible for the costs of them. Type of roads and who owns them. How many park owned homes vs tenant owned homes. Size of park. Offsite Property management should be figured in as banks and other buyers will. This is a pretty broad question to answer. Your expense ratio will range between 35%-50% based on variables above. 

Go make it happen! 📈

Park owned home (POH) model is like a horizontal apartment building with units that historically depreciate in value (although not in this inflationary time). You will have a lot more turnover, make ready costs, marketing, showings, down time between tenants that you lose rent on, require more staff, and in general is more management intense. Most educated lenders, appraisers, and investors do not value the income from the homes (chattel) and only value the income coming from the land (real estate). They will value the home based on its "shell value" or essentially what it can be sold for. Even if you make good cash flow during ownership, financing and resale is much less marketable. you will see a lot higher revenue but you have a higher expense ratio and many will say "it's still more profit though" but they are not figuring in their capex costs that happen every few years (like SFH). I recommend having as few POH's as possible.

The tenant owned home (TOH) model is what is preferred by most investors/lenders. It is not management free but puts the maintenance/repairs of the home on the tenant. Think of it like a for profit home owners association. This is how I have always explained it. They have to pay and maintain their home and yard. If they don’t, you can evict and resell their home if you have to. You will see much less turnover because they own their homes and when they do move they will sell the home to the next buyer and the manager just needs to approve the next buyer. In that scenario no make-ready, not down time, no marketing or showings, and the rent comes in as nothing happened. The owners responsibilities are the land, infrastructure and common area which reduces your expenses and need for staff. It is a very marketable asset for financing and sale. The challenges you will have are titles when you evict, you’ll have to sell the homes, and violations can be slower to enforce (in some states). This is the reason we buy MHP’s. If I want to rent units I’ll buy an apartment building. 

I Hope this was helpful. I have other MHP resources in my profile if you need them. Good luck on the deal! 📈

What Frank said and also be sure that if there are any park owned homes, that you only do the above calc on the lot rent portion of the income. Rent for the home should not be figured. You will want to value the mobile home separately based on what you can sell it for quickly. If you value the portion of rent allocated to the home you will likely be overpaying. 

example…

PARK VALUE: 

Lot rent is $400. Total rent for home and lot is $850.
$400 x occupied/paying lots x 12 x .5 / cap rate = value

HOME VALUE: If you can sell the home for 10k-15k than subtract out your sales, marketing, Reno, title transfer costs etc and maybe a little more for fudge factor and pay that for the home so you can at least recoup costs. The bigger fudge factor the better. 

hope this helps. Reach out if you need more help. 

Mario

A lot can change in 10 years and so anyone with too much conviction probably doesn’t understand that. There are also micro economics to look at in each metro/city/zip. 

That being said, I’d invest capital long term in NC based on its current situation and how it’s trending. 

Ps. If you asked that same question 10 years ago most would not have believed what a strong market the Carolina’s and southern states would become in 2022. 

PM me if you e got a deal you want to partner on there. 👍🏻

I own parks around the state of Florida and other states as well. All have been value-add or distressed acquisitions. PM me and let’s see if we can work together on them. We buy parks on assignment and partner with people regularly. 

First thing you need to do is determine zoning. If it is zoned for MHP (legal conforming) then you can legally use the land for it. If it’s legal non-conforming you need to find out if the MHP use can still be used since it has stopped operations. You’re going to need to get a land use attorney involved for this to be sure you can do what you want. My suggestion it to buy an existing park that is already producing income and has room for you to improve it. New development or a very low occupancy park is going to be a heavy lift and more risk than a new investor should take on. Too much to explain in a post but check out my profile for some resources to learn about mobile home park investing. Good luck.

Hey David! Sounds like you’re an experienced RE guy. PM me and I can point you in the direction of what you’re asking about. Pretty hard to explain an entire Due diligence process on a forum board. It’s a lot more than the 4 things you’re asking about. Happy to help. 

Mario

Both of those are the most robust property management softwares in the industry. I have not personally used Yardi but I am sure it can. Rent manager has the tenant portal and the ability for contactless pay and they can review their lease and rules etc all online. You won’t ever utilize everything either of these platforms offers. They also have integrations. Checkout my profile for some resources to help you in your MHP investing. Hope this helps!

Rent manager and yardi.