All Forum Posts by: Richard Haiber

Not interested in anything as small as 30 lots. 100+ is desirable, with anything smaller preferably being a home run deal (and close to home). Thinking of owning a small park far from home isn't appealing. I also have no interest in private well/septic systems. Tenant-paid water is also desirable but if I have an opportunity to add value through sub-metering and tenant bill back it could still be worth considering.

Theres also no interest in POHs. Bf the deal is right, its not an absolute killer and it would be priced into the deal. The goal would be to sell the MHs and make it as close to 100% lot rent as possible. For instance, if I look at a park with 100 lots and 18 POHs. I'm not going to pass on that deal without considering the possibility to sell POHs to tenants or investors after my purchase. If I filtered my searches and had no leniency in the criteria it seems like a deal could never be made. But you are right there are things that make a property a no-deal. But sometimes you have to give and take during the deal-making process with a calculation of your risks and then make the changes to the property that you see fit to create value in it.

The goal of the thread was to inquire from people who have experience owning parks and what kind of numbers theyre seeing from their properties. Do you have any park ownership experience with numbers to share?

Thanks for the response and I'll definitely keep those things in mind!

Just looking to see what financial qualifications some of you look for in a MHP (not individual MHs).

Looking to see what you might find acceptable in deals of your own for the following important factors:

1) cap rate

2) grm

3) dscr

4) cash roi

5) total roi

It'd probably be helpful as well if you could state some info about the following aspects of your park to put things in perspective:

1) number of tenant-owned MHs

2) number of POHs

3) the city/market your park is located

Determine the total income the property can produce. Then determine the total expenses you'll incur owning the place. Determine what cap rate you'd like.

One way to do this is to say:

Selling Price = NOI/CapRate.

These are just some preliminary methods that could help you get a ballpark. Then really do your due diligence and come up with the price point that works for you. Did I mention do your due diligence? There's a lot of things that can affect what it'll be worth to you so it's your job to uncover those things. It might also matter what your business plan and goals are.

Anyone with knowledge of the Flint rental market?

How are properties you own in Flint faring?

Just looking for people to throw anything out on what they know of the city regarding rentals. My first perceptions are that it's a tough market to keep buildings occupied.

Thanks in advance!

-Richard

Anyone with any experience using a  water sub-metering system that wirelessly transmits data to a company that bills the tenants? Specifically the cost of such a system? I'm speaking larger buildings (100+ units) where walking to every unit every month for a meter reading isn't feasible.

I don't really like the idea of RUBS because of the fact that I'm not billing my tenants for actual water use. I think a blanket fee that charges them all the same fees based on nothing that's actually related to their personal water use is plain unfair. If I was a tenant that spent a lot of time away from home and used minimal water I wouldn't want to pay the same price as the guy who's home a lot, takes 30-minute showers twice a day and leaves water running all day. So I'm looking for some good (fair) metering solutions to reduce my risk to water bills and I think this fits the bill depending on the cost of the system.

And to answer the question being asked in the original post, the overall income usually won't be much, especially if you have a contract with a company that's taking care of the machines and taking a cut of the money. Even if you own the machines you're still going to have to spend money maintaining the machines. Then either way your utilities will easily eat up money.

I would say when I evaluate a property I never look at laundry as being an actual source of income. It'd be a terrible idea to buy a property thinking you're cashflow will be coming from a couple washers and dryers. I generally view it as nothing more than an amenity that can help attract and retain tenants. The best thing I can relate having laundry to is like having a pool or a fitness center on the property.

I think washers/dryers provide an indirect amount of income in the form of attracting better tenants more so than how many quarters you will pull out of the box every month.

But even if laundry was $4 per wash/dry cycle, the average person will only have to do one full wash per week. That's $16 per month. And you have the convenience of not having to go anywhere.

If the place DIDN'T have laundry, you'd have to find a Laundromat and pay for it there. On top of that you have the added inconvenience of needing transportation (another cost) just to get there and it ends up taking more of your time up just to get a shirt washed.

So I still think that even with tenants having to pay to do laundry per load, it's still an added convenience that should increase how attractive your property is to tenants. And as others have said, the electric/water supplying the machines as well as the maintenance isn't free for the owner. It needs to be paid for somehow.

The obvious, best option would be washers and dryers in every unit (free to the tenant), but then you see how much that costs the building owner and rents would have to be significantly higher with this scenario. Plus many older buildings are not the best set-up to add machines in, so it could be expensive to retrofit. A coin-operated set of washers/dryers makes the most sense and rent should still be higher than a building without any laundry.

That does help and it's something to keep in mind! It seems a lot don't have pools, some do, and that would be a significant additional expense. Landscaping would likely only be done throughout a small area (i.e. the entrance) for most parks right? Are MHP tenants who own their own MHs not responsible for grass cutting, etc.?

Thanks for the response!

That's certainly something to factor in, but in reality you're going to be limited by nearby competition as to how much you can recoup in the end. If my rent per space climbs too high I'd imagine I'm going to end up with a good amount of vacancy, just like any other rental business.

MHPs seem to have deceivingly high expenses (even not owning the MH themselves). Refuse pick-up and water bills for a 100+ space park add up.  Am I seeing it right when I'm starting to realize that the ratio of expenses:income isn't significantly off from that of a similar size (no. units) apartment building? The expenses are higher on owning apartments, but you also generally fetch a higher rent price. 

What would some of you say your personal expense:income ratios are? I like the idea of MHPs, but don't currently have real world experience with them.

Thanks for the input. Sounds like pipe material will impact the situation significantly and would be easy to determine upon property inspection.

Are most older parks set up where the park owner pays water bills with no tenant re-payment?