All Forum Posts by: Samuel Coronado

I am starting a park that will end up with roughly 20-25 lots on plot of land that's roughly 20 acres (including an existing 4/2 house). The house rents for $1200 month currently and will be able to get $1600 if renovated (finish basement bathroom, new flooring and fixtures, mainly cosmetic). I am having land cleared soon for either 4 single wide homes or 2 doublewide homes. The singlewides would be roughly 1000/month gross rent each ($4000 total). The doublewides would be $1500 gross each ($3000 total). I am leaning toward the doublewides for longevity and lower turn over purposes. On the other side, I am planning 15-20 doublewides. These will be done in multiple phases. 

But per lot it will cost roughly the following:

$1,500 Electrical poles, meter installation 

$2,000 water taps and connections

$5,000 grading and land prep

$8,000 septic installation (assuming a 1:1 ratio of homes to 1000 gallon septics)

$5,000 down payment on each home ($700-750 / thereafter per unit)

$21,500 total set up x 17 = $365,000

Ongoing expenses after development would look something this for POH model: 
$12,750 a month in mobile home mortgages (17 x 750 for PITI on each unit)

$1,900 a month in land mortgage PITI (house)

$3,000 a month landscaping

$2,000 a month in reserve emergency fund

$2,200 management

$21,850 a month total expenses 

$262,200‬/year

Ongoing incomes after development would look something this for POH model:

$27,000/month ($1500 x 18 {17 mobile homes plus house})

$324,000/year

324k-262,2k = 61,800 net pre-tax profit or $5,150/month.

Opportunities to reduce start up expenses: 

Bulk deals with the government or contractors for doing all the work at once (electrical, water, land grading, septic) 

Trade free rent for someone to mow and landscape (turning a $3k event into a $650 event every month). Savings of $30,000 a year. 

Management fees- free rent in exchange for licensed agent living in the community and coordinating work orders, etc. 

$288,000 income - $199,600 expenses without management and landscaping = $88,400 / year or $7,366/month. 

Doing the numbers on a commercial property value calculator, without debt service I will be at at a valuation of $3,026,400. 

Property is currently worth $425k before the land improvements and development of $365k being added. $790k turning into a multimillion property seems like it's too good to be true. Can someone tell me what I may be leaving out before pitching this?

This deal works best with an equity partner and I have a short list of those who will be looking at the deal soon. 

I personally like to call and ask how much the lot rent is in a specific park. They often give the information freely. 

It sounds like you are taking all the risk and they are doing what a normal property management company would do. What's stopping you from doing it yourself and just paying a property management company if you are taking all the capital risk?

My handyman uses a cool seal mixture. It has worked wonders for keeping the home leak free. They come in different colors. 

This is how I got my start. I got up to 30ish when I cashed out of everything and sold them all back to the tenants with 0% owner financing. Now I have graduated to entire parks. 

I run all the same way in all my markets. I like targeting what I would call secondary or tertiary markets, because the lack of supply and the lower competition. Facebook is how I do it with a screener Google Form. I emphasize this is not an application as then I would have to formally reject people and give reasons why. Only after they have been screened and seen the property in person can they apply. My listings don't last longer than two weeks. 3,000 is a bit on the small side, but if it's an older crowd Facebook will be the way to go. 

I fell into a similar situation in a park I bought last year. I let the natural turnover happen and as the new tenants came in then I required deposits from them. The rent increases will cause some vacancies. You want that to happen. It will produce an opportunity to reset the park the way you should want it to be done. 

update: the property was taken off market as of July 2024, unsold at the desired price. 

 Yes, sir. I was able to establish a great relationship with a local lender who will be my very first call when it comes to the next deal.