All Forum Posts by: Account Closed

Here's a news article on it from 15 months ago: http://www.kcbd.com/story/26691387/rudds-trailer-p...

Yeah, it would be a massive project.  We have about 800 spaces, but nothing with the hair that thing has on it.  We're in the middle of a big turn around in NC that seems pretty bad, but Rudd's would be a whole different animal.  The price is the only thing that keeps us coming back to it.  Back when it had 70 occupied/paying units @$450, that $550,000 price tag looked even juicier.  From experience, that area has massive demand and the lot rents will be north of $500 in no time.  There aren't many parks in Richmond and the area keeps getting more expensive to live in.  If you could pull off that turn around, it would be quite a thing.

Jeffrey, I would like to point out that I'm taking a stab in the dark as to which park this is.  Being involved in this industry is a full time thing for me so I'm fairly confident with my guess.  Anyways, if this is Rudd's, there are about 40-50 abandoned homes on site.  A lot of people have moved out and abandoned their homes due to the constant city pressure.  Probably half or more of the homes are salvageable.  This park still cash flows well and would support debt from the seller (If he were willing to do it).  The turn around would be intense, but on paper it's doable.  We never got far enough to involve our lawyers or the state MHA, but I'm pretty sure all of this pressure is the city trying to force a sale.  If competent new owners came in, it's somewhat likely that the city would be willing to lay off a little.  Again, this is purely conjecture but with what we know about this park, that's what our gut is telling us.

Mostly city harassment.  Some warranted and some is a little overboard.  The owner is a super nice guy, but he let the property go over time.  It needs upgraded electrical throughout the whole park and it has some decent water leaks as well.  The last count I had was something like 1,000 code violations.  

This sounds like Rudd's Trailer Park.  I own a park very close to that one and I've been looking to buy Rudd's since last Spring.  The big sticking point on it is that the seller absolutely needs to finance it at least short term.  That's my two cents on it.  There are too many legal issues to go all cash on it.  This is probably why it's been under contract at least three other times for all cash and was dropped.  If you can convince them to seller finance it, I'd certainly like to be involved with the turn around.  I've laid that ground work over numerous discussions (in person and on the phone) so maybe they are ready to come around on that.  At this point, if they can't sell it soon, there won't be a park there anymore.

I like to use brokers who are local and have at least 20 years of experience in the market I'm trying to get into.  I generally just google search and call 4 or 5 of them and then make a decision on who to go with.  Things you want to hear when you tell the broker what you are trying to do:

1. I know the owner of that park.

2. I know who the owner is.

3. I'll go find out who owns it and get in contact with them

You need to follow up with these brokers on a weekly or bi-weekly basis to see what they are doing.  In most cases, the owners you connect with will treat this broker as a buyer's broker so go into this with the expectation that you'll pay the commission and adjust your numbers accordingly.

That was 5,000 over the course of the year.

For owners where I can't find the phone number or mailing address,  I hand these off to a broker.  For instance, if there is a market where I am having trouble connecting to 5 or 6 park owners, I contact a commercial broker with a lot of experience in that market and give them a list of the exact parks I want to look at.  It is more important for the broker you use to be tapped into that market rather than be experienced in valuing parks.  Calling the park manager is generally fruitless.

$1,000,000 would be the loan size to generally be considered for non-recourse.  However, that is changing all the time.  Last time I spoke to mortgage brokers it was all over the map.  From $800,000 to $1.5mm.  Anyways, the best non-recourse is seller finance.  I make getting this a big priority when talking to owners.  If you make this a priority for yourself, then there is no limit on the loan size for non-recourse.

My partner's first deal was discovered on Loop Net. It was a mis-advertised, small REO park in Atlanta. At purchase, the park had 32 lots, 29POH's, and 0% occupancy. After a lot of tough negotiating, the deal was had at $200,000 and financed through a hard money lender. Him and another partner closed the deal, put up an additional $100,000 to renovate the homes, leased all 29 homes through a rent credit construction, and are now in the process of refinancing into long term debt.

My first two parks were found using cold calling and direct mail. I'm using two, because they both closed on the same day. The first was a 131 space park in Burlington, NC. It was about 60% occupied and the park was financed by the seller. $1.1mm with 9% down, 30yr am, 5% interest, and a 9 year balloon. The second was a 52 space park in Petersburg, VA. That one was about 90% occupied and also financed by the seller. The financing was 25% down, 7% interest, 25yr Am, and a 6yr balloon.

All three parks are performing at or above a 30% CoC return at the moment. All three are home runs in their own way. What I can say is that we sent out over 5,000 letters and made hundreds of calls to find them through. No matter your approach to finding a park, volume will be your best friend.

No problem.  All in all, your pricing seems very reasonable and I would definitely tie it up and do some diligence on it.  The financing he's offering you is awful so I would work on that through the diligence while simultaneously shopping it at some small banks.  Getting a 6-7% interest rate and a 25yr Am is a whole lot more realistic.

Your expenses are a little light in my opinion.  We typically pay about $50-$55 per lot for insurance on the park and $150-$200 for each home.  We insure homes to replacement value ($10k-$12k on older units)

Your capital reserves should be around $150 per pad with septic and gravel roads.  Probably safer to be north of $3,000 here.  It sounds like you have enough land for septic, but you may want to call up the health dept. at this point to see what you are working with here.  Could be a big time saver if they have anything negative to say prior to you getting it under contract.

Your upside appears to be to get everyone up to that $175 mark.  Easley has pretty low rents but you may want to call around to see if anyone is higher than that.  The only number I have is for Meadow Haven - eight 6 four 85 nine fifteen 87.  Robert Hall of RSH Inc owns quite a few parks in the Greenville market as well so you may want to see if you can talk to him too. I'm not going to give his out, but he's easy enough to track down.