1st Manufactured/Mobile Home Park Endeavor Underway!!!

[Stefani Gillenwater]

We got started in Real Estate Investing about a year ago when we realized that my husband had six years until he was retirement eligible. We started off with 2 SFR's that are doing well thanks to our friends at STOREHOUSE 3:10, but decided that in order to meet our ultimate goal we needed to scale up sooner rather later. We are now approximately 2.5 months into our first multifamily investment. We purchased a Manufactured Housing/Mobile Home Park in Indiana. It is in rough shape and needs a lot of TLC and organization. Here are the particulars:

Purchase Price: 220K

Down Payment: 30K

Seller Financing:  6% Interest Only, no payments first 6 months, 2 year term

21 existing LOTS and 1 SFH

7 Vacant Lots/3 TOH's/11 POH's 

City Water/City Sewer

Value Add Strategy: Install Submeters and bill back for water/sewer, improve the curb appeal through landscaping, and road/gravel driveway repair, renovate vacant trailers and sell or Lease w/Option, Renovate SFH and increase rent, infill used trailers to fill vacant lots. Goal is to get occupancy to 80% in order to support a refinance.

Current Struggles: Initial contractor has not performed to our liking. Currently trying to find a way to off ramp contractor and find a replacement. Finding capital to bring in new homes and renovate the SFH (current condition is worse than we originally budgeted for). Enforcing new park rules and regulations which is partly due to not having a property manager yet, which is a struggle itself. In the process of evicting a tenant (inherited from the previous owner).

We appreciate any comments or feedback.  We will keep everyone posted along the way.

[Alina Trigub]

@Stefani Gillenwater

Congratulations on taking a timely action and planning for retirement! 

Here're a few of my suggestions:

1) In terms of your struggles, while you're searching for a new PM, have you thought of identifying a reliable tenant and asking them to take a temporary charge for a temporary price break. Talk to the prior owner if you have closed with them on good terms and see if they could recommend one of the tenants. If not, running background and credit checks on all tenants and going through the rent roll should give you a good picture as to who can help. 

2) When it comes to financing the new homes and reno costs for SFH, think creatively in terms of the options:

a) borrow against your existing 401k (up to $50k)

b) do you have a enough equity in one of your existing properties to pull a HELOC out

3) private lenders or HML

4) bring a partner on board

If you would like to talk about any of these options, or need my help further, feel free to PM.

Best!
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