All Forum Posts by: Roger D Jones

@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.

Emory,
Great question but a lot to unpack.  Are you looking at the maintenance/repair costs of the homes once in place, W/S/G costs. septic expense if applicable?  Best way is to just try to break it down piece by piece.
Water- how is it being delivered to the homes.  Well?  City water with one main at the street and how will they bill.  One meter reading for all usage or like some small communities a set price for each occupied home?
Sewer- Septic or sewer lines.  Again... how is it metered?
Garbage- Dumpster or can you get can service?  
Taxes/Insurance- depends a lot on where you are located.
The homes themselves- POH or TOH?  New or used?  And if used POH... how used?

I have all three kinds of parks- LT RV, POH and TOH so can help with repair estimates but so much depends on location and access to reliable repair services.  For my POH park I have a hourly PT maintenance manager who keeps our rentals in shape.  As you develop the park I would strongly recommend your homes be individually metered for water, sewer expense prorated and garbage paid by tenants via individual can service.  Just keep those off your P&L right from the start.

If you have questions on the maintence percentages on the POH homes... lmk and I may be able to help.

Go to the DMV with the VIN or ID number of each trailer.  Should be on a metal placard on each trailer.

Sam

Everyone here is providing great points to consider and if you were my son I would say that at 360k this 'dog needs to get put down'.  As Sean above alluded to- never pay a seller for your future hard work, risk and stress.  All too typical park owner who took all the profit out of the park without reinvesting in the business then wants to sell you the potential he was too cheap to invest in.  You pay for what it is... not for what it should be or could be.

Later Pal

Rog