All Forum Posts by: Roger D Jones

Interesting... I have grown up in Washington.  My parks are there.  You planning Tenant Owned Homes or Park Owned Rentals?  Given your beautiful location what is the status in the area for long term RV?  Those tiny homes are cute to look at but wickedly expensive.

A 16% expense ratio (if I understand you correctly) seems pretty low for an all POH park.  How many homes and is your uncle doing all the maintenance himself?  Does he have insurance on the homes and park?  

Jimmy

Best advice without getting into the nuts and bolts of your situation is to simply avoid building a mhp from scratch.  Unless you really have expertise in site development, permitting, construction, landscaping, etc... you will be in way over your head financially before you ever hopefully get a single home in your park.  PE groups are causing tremendous instability in the mobile home realty market which is keeping potential home buyers out of parks.  You are better off finding a pre existing park and purchasing as is.  

There is a reason very, very, very few new mobile home parks are being developed.  It doesn't pencil.

@Debbie Nunez
I would recommend an abundance of caution here.  With my crayon in hand it looks like this is going to be a very difficult investment to crayon out.  With 75k in you want to absolutely ensure ensure a 10% cash on cash return or $625 per month.  Layer in the pad rental, insurance and maintenance you need to be close to $2k in monthly rent.  And lastly as @Arman Ahmed mentions above... you got to be able to get out of it as a diminishing asset.  You are also tying up 75k that you could use for a better appreciating investment.

 I have always used that thought process when looking at parks, rehabs or multi family investments.  There are a lot of really smart people out there with money to invest to make more money.  Why haven't they jumped on this deal?  Has probably caused me to lose some opportunities... but maybe it has also kept me out of hot water.

Wow... I think @Dominic Mazzarella brings up some very, very good points.  The seller being a MH dealer really sends me jumping overboard.  Sounds like he is doesn't want to invest in his own park with his own trailers but wants you to buy it at a premium then buy his trailers at full retail to put into the park.  

Park has to be profitable to you on day one as it sits right now with positive cash flow.  Then you can talk to him about in fill but at closer to wholesale pricing than retail.

Sounds like a pretty fishy seller...

 Frank and his team are knowledgeable well versed in MHP operational issues but they have an agenda that they aggressively pursue.   Important to know who they are and who they are not.  Depending on what type of investor you are what your goals are you will learn more from the forum than from their bootcamp- which if it only proffers one investment strategy really is not worth the money.  

Anastasia,
Was a long time ago and things just kind of lined up right.  I did a land/mobile home financing deal on my first home.  Cleared the land and then placed the home.  Having them combined allowed me to get conventional financing.   I bought the land outright but financing the mobile at the time was difficult and expensive.  Combining them put it into a 30 year mortgage- which was not possible for either piece singularly.  Made a little money off it and repeated it a couple times.  

My memory is a little vague but it was the ability of buyers to finance over 30 years that helped flip the properties for a nice return. FHA might have even been available.

Bottom line I guess is whatever you do with those parcels it is important that first time home buyers can get financing long term.  Makes them a quick sell.  

Years ago I would purchase lots and place new mobile homes on them then sell outright.  Different times, different place, different circumstances but did good on each flip at the time. Got lucky with timing and market conditions... did a few then rolled the proceeds into my first MHP.

Steve,
It is true PE and investment groups have been gobbling up the market over the last 10 years- so much of the 'great all TOH parks' are more and more difficult to find.  That being said we as private investors can use this to our advantage and find some successes in POH parks or mixed POH/TOH parks.  I would focus my attentions here and try to stay local (within a 4 hour drive) as the POH rentals require more engagement.

Financing is a tough deal... but sometimes you can find those Mom and Pop operations with quite a few POH rentals that will work with seller financing on a reasonable interest rate with a balloon within 5-7 years.  That gives you time to get organized and established for more conventional financing.  Just remember though unless you have deep pockets you need to at a bare minimum stay cash flow neutral until you get the property running and your debt paid off.  

As for Frank and Dave at MHU.  An absolutely amazing forum that has an answer for any question you could ever ask... search the forum or ask.  I am not a huge fan of them personally as they are PE investors and have a very, very narrow view of the industry and how it should be approached.  Just my opinion though for what it is worth.