MHP For Dummies

[Luke Mertz]

So, I'm a 16 year old who's really interested in real estate. I know there's so many ways to skin the real estate cat and MHP seem like a viable one.
Could anyone show me some example numbers if you've purchased MHP?
Also what the loans look like/ how you paid it off.
And the best course of action someone could take if they wanted to buy a MHP for their first deal.

[Parker Schultz]

There is a lot of money to be made in MHP if you know the market, the people, and are walking the property prior to purchase and shaking hands, meeting people, and kissing babies. Meaning the attention to detail is what makes or breaks the deal, in my opinion. I would not lend to an investor who is buying and planning to remotely manage a MHP that is not from, has living experience, or travels frequently to that specific submarket and know the great submarket/metro very well. 

Have you ever seen an episode of trailer park boys? MHP have one of the largest variations in a tenant profile that is NOT reflected in cap rates like the traditional apartment market. This is further driven by people seeing high % cash on cash yields and not understanding why the asset is priced accordingly. 

I have underwritten a few MHP in the midwest, the best deal for MHP was here in San Diego, California because it of its proximity to the ocean. Those mobile homes where just Condos with extra steps really. 

My underwriting was as a hard money lender funding with Purchase Price and renovation $ to add more lots and expand the common area/clubhouse. Bank financing is available from a local credit union or bank, but dont be suprised if the bank cuts you off at 60% LTV of the ARV