All Forum Posts by: Mike Zhou

My partner and I are in the process of acquiring a not so well maintained ( Pop had it for 20+ yrs) in a small town. The seller would provide an "adhesion contract" to sell the building for 85K "AS-IS", ARV is difficult to calculate since it is no COMPS in 30 miles. The occupancy is around 60% with 6 units need to total rehab. current NOI is around 3K/m. Rent is bit below market due to the condition. I have read through the "Due Diligence" book, with the deal we negotiated, seller agrees only to do the "AS-IS, Whereis" contract. What do you guys/gals think ?

You guys are wonderful with your insights and feedback. I have went through pretty much all pot cast and online forum to jump start my knowledge on the MHP. 

To @CK Ebert, I would like to increase the value or park and cash flow for the Park by filling the empty lot, or at least that what i learned so far.  All homes are tenant-owned. 

To @John Jacobus, It is park near +100K populations. On filling the vacant lot, I read all the post on buying new/used MH and move to the lot by owner. How is the success rate for people to relocate their MH to the lot ? Sounds like one needs to find the renter first then try to sell the MH to them. 

When you say MH dealers, are they manufactured home dealer like new/used car dealer ? 

- Lot rent is 240, but I checked other parks nearby, it is 275-395 range, so got some room to go up

- Park is municipal utilities, but owner pays the water with only a handful meters, how much cost to install the meter for each home ?

- I will go check it out tomorrow of the park condition and roads.

- It appears all other parks are full occupancy. Test called a couple of other parks and managers says the rental market is good, POH rents to 6-800 2/3 beds. 

-  I plan to do a HELO on another rental property to pay cash for this property. Seller is not interested in the notes.  

- All great ideas for me to chew on for filling vacancy . thanks a bundle. 

- Regarding the CCI  Investment( Andy Tollone), here is the fee associated :

"First off, you should have an Onsite Manager, and maybe the owner is doing that himself now. But you'll have to hire someone. Then, if you want us to run your park for you and fill it up, that will cost $600/mo for us. And we'd need to get paid at close of escrow, probably $25K.

However, for that, we will help you research this deal, write the offer and negotiate it, do your due diligence, write a plan for the park, then run it for you and work the plan. You get a lot for your money. We currently run about 80 MHPs in 16 states"

- Regarding JV, that is very interesting idea, where do I found those and how to structure the deal ?

Thanks for you detailed information and look forward to your feedback.  PS I send u a connecting request.

Mike

I believe you have to separate the POH rent vs the lot rent. Typically POH rental is not count. You need to find out how long the lease and who will manage the property.

I am in the process of buying my first mobile home park. 

I have been primarily rental investors for SF and TH. I have recently come across a 27 units MHP (10 vacant) which

Is 2.5 hours away from my resident. It was a my first entry to this space and quite uneasy into the deal.

My main concerns are those empty lots and long distance to manage. The cap rates with current rent is around 14 caps. It was a mom pop shop asking for mid 200K. what your advice on the deal and fill those empty lots after

Purchase ? Also have you heard about or used CCI Investments 

https://www.mobile-home-parks-forsale.com/about-us...? 

85K PP

William, that is gross rent with 50% occupancy. That is in IL. 

Thanks Chase for the follow up.

This is a deal brought to me by a agent who wants to partner with mtypo e. Asking 115K, he proposed to get 85K. I provide funding for the deal and he provides the rehab and property management.

The money I put in is 95K and he will pay the $2000/m which is just interest. He will pay back in 5 years after the rehab and upper occu. but I won't have any upside on the apt if it sold.   The cap rate must be typo but from the seller agent. 

Any suggestions ? Thanks in advance

I got a proposal for following deal and this is my first time to invest in multi-family venture and would like your feedback on how to structure the deal.

Property: 21 unit + 2 unfinished.  built 1955

Annual Taxes $4,190.40

● 2 2 Bedroom units rents $550

● 9 1 bedroom units rents $450

● 5 large studios rents $350

● 5 small studios rents $300

Total building sq ft 9,664

Numbers

Monthly Current rent $3,525.00 (all tenants )

Total $1,186.07

Cap Rate 0.32

There no comps but property can be value over $200k once fully occupied and manage

well.

Your investment would be secured by property alone with purchase price under 100k.

Repairs estimate 30-35k.

I am proposing a loan of $95,000 with a open line of credit for repairs for 5 years, with

option of early payoff.

$95,000.00

5 years

$2,000 a month

Should I request some equity percentage like 50% when the sale happens or cash out refinance to pay back the principal in 5 years which ever happens. I still entitle the 50% NOI cash flow if still holding.

Thanks for your feedback.