Declo Mobile Home Park
Investment Info:
Mobile home buy & hold investment.
Current
Declo Mobile Home Park was acquired November 30th, 2018 by Virgil Nethercott on behalf of Declo MHP, LLC and under the management of VBN, LLC. The community was presented as a stabilized and clean park but had under market local rental rates.
The community is located within the City limits of Declo and has all city maintained water and sewer lines. The West half of the park units have individual meters that are billed through the City directly. The East half of the park units are located on one meter that is billed to Declo MHP, LLC. For now, that cost is being passed onto the tenants through billing with a 10% charge on top.
Currently, the park owns 13 mobile homes and is rented out to individuals. 8 of the lots are on lot rent only payments with owned homes. 2 spaces are vacant that will fit RV's of 20 feet or less in length. Lot rent fees are $220 a month and park owned rents vary in the $500 a month range.
Future
There are many improvements for DMHP coming into Spring 2019. The following are improvements that are scheduled for completion.
Professional local property management has been notified that one of the 1st tasks of the project is to sell off all the park owned mobile homes to residents or owner-occupied users. A condition of the sales of the units will be to keep the units in the park for a minimum of 5 years, and no subletting will be allowed.
The park has been approved by the City to allow for five additional spaces to be installed in the North East corner of the property. In doing this will increase the final NOI as well as add the 2nd entrance into the park.
During the advertisement of the units for sale, the new lot rental rate of $300/mo. In addition to this rate increase, the tenants will be responsible for their water and sewer bill as they have already been paying.
The East side of the park without individual meters will have new meters installed on each unit in the summer of 2019 so that billing will be maintained between the Tenant and the City.
Currently, there is a dirt road that loops through the park. In the interest of future ownership and financing, new asphalt will be placed this spring. This will help with the maintenance of the park as well as the overall look.
In the center of the park, there is a 30’x30’ of ground area that is not officially utilized. As it stands now, it collects water and tenants will often use it for extra parking. This space will be redeveloped as an open-air community center that has picnic benches and areas for families to gather.
New mailbox facilities will be installed at the entrance of the park to prevent tampering of other peoples mail. Pillars will be established to avoid damage to the postal box.
Investment offering
With capital improvements of well over $100,000, asset repositioning, and asset stabilization we believe this will have a final result of a stable and prosperous asset.
Current Asset financials (Annual figures):
7 rented lots - $18,480
1 Manager rented lot - $0
13 Park owned homes - $68,120
Total gross income = $93,200.
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Annual Expense based on current asset financials:
Property tax - $2,500.00
Park Insurance - $900.00
Professional Property Management - $8,660.00
Total Expenses = $12,060.00
Total current NOI = $53,220.00
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Projected asset financials (Annual figures):
22 Rented lots - $79,200
1 Manger rented lot - $0.00
5 Future rented lots - $18,000
0 Park owned homes
Total Gross income = $97,200
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Annual Expense based on projected asset financials:
Property tax - $2,500.00
Park Insurance - $900.00
Professional Property Management - $9,720.00
Total Expenses = $13,120.00
Total projected NOI = $84,080.00
DMHP project is projected to take two years to implement all of the capital improvements and stabilize the park to the desired position. Upon completion, the park will be available for acquisition with current transferable financing in place or by other means.
