All Forum Posts by: John Jacobus

I have a 100’ x 60’ lot in Belmont, zoned R2.5, that I’m planning to divide into 2 separate 50’ x 60’ lots. The north end of the lot has a home on it and I plan to build a new home on the newly created southern lot. There are at least two carbon copy examples in the neighborhood and this seems to be a low complexity project.

Can anyone here recommend a surveyor and/or engineering firm who can guide me through the land division process, create the new plat plan and help sort though the possible need for a new retaining wall on the south end of the lot?

I have a 100’ x 60’ lot in Belmont, zoned R2.5, that I’m planning to divide into 2 separate 50’ x 60’ lots.  The north end of the lot has a home on it and I plan to build a new home on the newly created southern lot.  There are at least two carbon copy examples in the neighborhood and this seems to be a low complexity project.  Can anyone here recommend a surveyor and/or engineering firm who can guide me through the land division process, create the new plat plan and help sort though the possible need for a new retaining wall on the south end of the lot?

If you can rehab them for a reasonable cost and find qualified renters or buyers, it can be a solidly cash generative approach.  I do this in addition to owning and operating parks and both are good businesses once you learn how to navigate the common pitfalls.

Glenn Esterson has a new book out, The Mobile Home Park Manifesto, and it’s great.

@Tyler Geisler We own a few dozen mobile homes as part of our mobile home park business.  The older homes have been a major time suck as there was major deferred maintenance in almost all of them.  Repair needs continue to come up and finding high quality, reliable maintenance people has been challenging given the volume of repair work that we’re facing.  In addition to considering the age of the home (buy 1990+ if you can), you also want to consider the quality of the tenant base that you can attract. The higher quality the tenant base (documented income 3x+ total rent, solid employment history, no eviction history and clean criminal record for past 7 years), the fewer issues you’ll have renting or selling the homes.  This can be hard to find in smaller markets.
On balance, the cash flow dynamics of pursuing rental mobile homes are better than single family homes.  If you can buy a newer home, in good shape, for less than $20k, in a strong market with a solid tenant base, you can generally get far more cash in your pocket per month for each dollar invested in the mobile home.  However, with single family rentals, you have the benefit of owning real property as opposed to personal property with mobile homes.  As a result, single family homes are more likely to appreciate in value relative to mobile homes.
Lastly, financing the purchase of a mobile home is far more difficult than financing the purchase of a single family, stick built home.  Therefore, you don’t benefit as much from leverage with mobile home rentals as you do from single family rentals.

Reach out to me directly.  We own a park in Topeka, KS.  We can explore ways in which you can grow your mobile home investing activities.

We are battling mold issues due to damage in the underbellies of our older park owned homes. The underbelly is punctured in various places, exposing the insulation. In addition, the ground is exposed with no vapor barriers over the dirt. We want to mitigate future issues by implementing light/moderate touch fixes to all affected homes. What are the best methods to mitigate the moisture from coming up through the floors without spending a ton of money to completely resolve the issue? Our park is in a mild, coastal climate so we don’t face extremes in temperature.

@Dustin Mathenia That’s frustrating.  We allow it in our parks as long as we can screen the tenants, the current owner doesn’t move the home while it is being financed, and the future home owner agrees to keep the home in the park for 2 years after it has been paid off.  

It’s curious that some park owners would rather keep their homes empty than do what you’re suggesting.  We welcome help from investors as long as they don’t own more than 20% of the homes in the park at a given time.  We’ve had success with mobile home investors.  They help us keep capital expenses low while turning over our park owned home inventory and filling vacant lots.  We have old park owned homes and vacant lots in our parks in San Antonio, TX and Topeka, KS and have been thankful for investor interest in our used homes as it would be an expensive and time consuming project to handle alone.

@Sterling Jaquith I would gather a few additional details from the broker:

• How many lots are occupied by owners vs home renters vs RV vs vacant?
• What is the lot rent and home rent?
  

This looks like it’s a resort area which may explain the unusually high ~$50k / lot price.  You’ll need to validate the demand and financial operations of the park to justify such a high price on a per lot basis.

My initial impression is that this property is richly priced but it depends on the lot rent and expenses.  Generally speaking, we try to buy MHP’s where lots are priced <$25k per pad but we break that rule in the larger, high-demand markets.   It’s a rough guideline; not a hard rule.  There are definitely instances where $50k/lot can work (e.g., near the Pacific Ocean in premium locations with high lot rents and strong demand or well located parks with major operational upside).

I wouldn’t get spooked by the 9% cap rate.  That’s not a terrible deal if the market is strong and you can validate that it’s a true cap rate (i.e., the income and expenses have been validated and lead to a reasonable belief that the property can produce net operating income that results in a 9% cap).  Buying at a 9% cap and financing the purchase with 5%-6% debt still leaves you with a healthy spread which should result in a decent return.

As next steps, I recommend asking the broker about the items above, obtain a rent roll and income statement for the past 1-2 years, and visit Best Places to review the population size, avg apartment rent, median home price, and unemployment rate in the metro area.

@Christian Ortega, there is a vibrant community of Mobile Home Park investors in the NYC metro.  Given that you’re local to the area, I strongly recommend that you get involved with the MHP Tribe, a local meetup of interested MHP owner/operator/investors.  The last meeting was on Thursday and we meet approximately monthly—sometimes in person and other times virtually.  

Below is a link to the event page.  I strongly suggest that you sign up on Meetup to stay current on the latest meeting dates/times.  It’s also worth connecting with @Ekaterina Stepanova who leads the group.  I look forward to meeting you at one of the sessions.

https://www.biggerpockets.com/...

Thanks @Jacob Sampson.  Let’s find time for a call to discuss the details this week.  I sent my email address to you via direct message.  I look forward to exploring options.