Updated over 2 years ago on .
Proud of my mobile home park
Investment Info:
Large multi-family (5+ units) buy & hold investment.
Purchase price: $1,150,000
Cash invested: $750,000
I got insanely lucky on my first MHP deal. Yes, I knew the market and I knew I had to find room for 1031 money but I have learned the true meaning of upside. I also happened to purchase it right after the pandemic when rents began appreciating at 20%/year. I am bias, but after 2 years of rehabbing park owned homes and improving the community, cash flow has gone from $14k/month to just under $30k/month.
What made you interested in investing in this type of deal?
Rising land costs made development harder to do, and I knew the area well enough to know growth had began but was far from complete. I knew mobile home parks were a good investment and after this deal it's over 85% of what I do.
How did you find this deal and how did you negotiate it?
Called the owner and spoke for over an hour. Within a month it was under contract. I offered $900k, was countered with $1.3M and we closed in the middle.
How did you finance this deal?
1031 money and a 33% LTV 5/15 bank loan.
How did you add value to the deal?
Forced appreciation by moving rents towards the market. Improved ineffecencies and delivered a product that nobody in the market was delivering.
What was the outcome?
A stabilized cash-flowing investment that will return >20% annual ROI.
Lessons learned? Challenges?
Management and park-owned home operations are incredibly burdensome but worth the spread on lot rents.
