All Forum Posts by: Samuel S.

@Frank Rolfe Thanks a ton Frank! I am checking out their website now and it looks very promising!

Just out of curiosity, do you know if this website is more geared toward "one off" materials that MHP operators would need for ongoing repairs (thus paying a bit of a premium for the convenience)? Or do you think actual mobile home manufacturers would you this site as well to procure their bulk material lists?

Hey BP folks,

Was seeing if anyone could point me in the right direction to find the actual manufacturers of mobile home parts?  

I know that a lot of the items in the mobile home would be the same as a traditional house, i.e flooring, siding, fixtures, etc.  But for the items that are dimensionally mobile home specific - doors, windows, tub surrounds, etc - are there key manufacturers out there who you could purchase from direct?

Any input would be extremely appreciated!!

Thanks alot for your input Daniel! I was more curious to see just if they could be built and approved by HUD in general, not necessarily onsite at the park. I.e if I were to purchase all the materials and build my own inside a separate factory, could I then have a HUD inspector come by to verify/approve if built correctly?

Hi BP folks,

So I recently closed on my first mobile home park, and over the last few months have been in the process of upgrading several of our current POH's.  Throughout this time, I have been thinking a lot and researching about whether it would make sense to continue spending the time renovating, or if I should buy refurbished, or if I should even look to purchase new.

For those who are experienced in this space, I was wondering if anyone has ever done a financial case study to see if manually building a HUD code approved mobile home (via Home Depot materials) could potentially be cheaper than purchasing new? And, if anyone might have a cookie cutter "bill of material" list they wouldn't mind sharing?

Thanks in advance!!

@Daniel Ryu The $325-475 is total monthly rent.  The entire park is POH, and on city water/sewer. Lot comps for other MHP's in the general area are around $200-$280 per pad.  Again there are also 4 cabins and a 3 unit complex on the park. 

The POH trailers ages range from the mid 60s to the 70s.  They did appear to be in relatively good shape from the outside. 

From reading many of the threads on BP regarding POH vs TOH, I can understand the overall dilemma with POH...But, I don't know that I completely agree with all the knock it receives. I mean, it can loosely be viewed similarly to apartment investing, no? Of course with the exception that trailers are a depreciating asset. 

 I would definitely be open to transitioning the park to TOH overtime (especially with the current 5 pad vacancies), but at the end of the day if it makes more money as rentals, and the management can keep tenants and operating cost under control, I don't necessarily see the issue with POH, as ultimately I am investing for long term cash flow. 

@Craig Sloan Thanks so much for your advice! You make some very good points, and I agree with everything you said. The park was originally listed for 425k, went pending and came back on the market and was lowered to 400k, which did seem a bit strange (it originally came on the market in July of 2019). The owner sent me his P&L/ Rent rolls from June2018 to May2019, and it seems generally consistent with what he was telling me about the current state of the park, but I am still waiting to receive the latest up to date financials.

I was planning to call the city and look to get as much info as I can, just not sure if I should "poke the bear" just yet. The part that I am still a bit hazy on is regarding the State and City regulations regarding MHP's.  He has sent me his up to date "Manufactured Home Community License" from the state of MI, which it sounded like that was all that was needed.  It is a smaller city, and I can't yet find any information on the city's website regarding rental certs/ certificate of occupancy etc.

Hey BP Folks,

Was hoping I could get some advice on the below MHP deal that I just got under contract.  I have not started the core due diligence yet, but from the surface and analyzing the preliminary numbers I have received, it appears to have some good potential.  The 2 week inspection period would start as soon as the executive order is lifted in Michigan, which could happen in 2 weeks at the earliest.  So I have at least a month to make a final decision.

Purchase price negotiated - $300K

Current Monthly Income - $8200 

28 units in total, broken down below:

20 Trailer Pads - 17 Trailers currently on the property (landlord owns all trailers, and leases them to tenants)

4 free standing cabins

3 unit apartment 

1 single family home - landlord does not charge rent to the tenants, as they are the onsite "management" who help collect rents, do minor maintenance repairs, etc

1 storage building on site

The current rents range from 325-475 with tenant paid electric and gas, and I believe that many of existing tenants are on government assistance (not section 8).  

There are currently 7 vacancies - 3 open pads, 2 pads with trailers that need to be removed, and 2 apartment units (1 of the units was used as storage and is ready to be rented, the other was used as an office but has been cleaned and is ready to be rented).  Technically there would be 8 vacancies if you included the single family home that the onsite managers live in for free.

As far as re-occurring expenses, the landlord is currently paying for the water/sewer (I believe it is on city water/sewer but going to confirm), as well as trash pick up.  Per the owners P&L, these two expenses together equal $1800/month.  Current taxes are approximately $475/mo, and insurance is $291/mo.  The owner did say that he found a company that can separately meter the water to be billed back to the tenants, so that could be a big value add.  The owner does not insure the trailers, but does have a liability policy on the park.  I would expect the taxes to increase at a sale, but not much as I believe the owner has owned the park for 5 years.  

So all in all currently, the net monthly income appears to be $5,634 ($8200 income -$1800 utilities -$475 taxes - $291 insurance). If this is accurate, it would put the CAP rate at 22%. Of course this is all before any potential debt service and budgeting for maintenance, vacancies, capex, etc.

As far as value add, I think there would be 3 main plays - billing back the water to the tenants, leasing out the 7 total vacant units, adding coin operated washer/dryers.  This could potentially add $4600 in monthly rental income not including the co-op washer/dryer (400 rent x 7 units + 1800 in water/sewer costs).  The owner also showed on the map layout that there is room on the park to add approx. 5-7 new pads.  But, the current lot sizes have been grandfathered in, as the latest code calls for larger lot sizes.  So I do not yet know the feasibility of this, and if the city would allow for additional pads at the current lot size. 

Local competition - This is located in a decent sized county in Michigan.  From what I can tell there is only 1 other local MHP in the city, but approx. 8 other MHP's in the county.  

I apologize for the long email, just wanted to provide as much info as I have at this point.  

Any advice would be greatly appreciated!!

Hey BP Folks,

I know there is a ton of info on here regarding SDIRA's, but with how quickly times change and new companies seem to pop up, I was hoping to seek advice from subject matter experts on who the top custodians are in 2019 - primarily from a cost perspective. 

Intent would be to utilize the account for not only real estate related activities, but also potentially business investing, and cryptocurrency/ derivatives.

Any advice would be greatly appreciated!! 

Hey BP folks,

Just curious if there are any commercial/non traditional lenders out there who are willing to hold second lien positions on a portfolio of properties, pending all the other boxes check out (i.e qualified borrower, property locations, equity position, etc.)?

Any advice would be greatly appreciated!!

Thanks alot for the feedback guys!!

@John Mocker appreciate the advice! Definitely going to call my agent to see the best way to handle it.

@Al Pat I am planning to do that as well.