All Forum Posts by: Dave Rav

Congratulations on your first project!  And happy to hear you are starting out in your 20s.  I did the same thing, though didn't get into MHs for another decade.  Couple of comments, pointers, food for thought:

-where did you get your ARV (source)?

-who is your intended audience to sell the property to?  Beware that any cash buyer owner-occupants with $50k+ will likely use that for a 20% downpay on a stickbuilt home.  (MH buyers are typically not super cash heavy; those folks usually "graduate" up to traditional homes).  One sure-fire way to get your sales price (and beyond) is a lease option or owner financing your buyer.

-beware of repairs that have been started but not finished.  Sometimes you end up have to tear out what repairs were attempted and start fresh.

Just my two!  All the best.

-Dave

I would assume in the end, it’s all about who currently holds title.  That determines what you are buying (TOH vs POH).  If the tenant doesn’t hold the title, and the Lease Option docs state “no equity to tenant “ then you may have POHs there.  Just depends how it was all structured.

Love the creativity.  Sounds like very little margin though.  Plus, what

@V.G Jason mentioned there is risk there.  And lets not forget the quirk of having panels on your roof (if any roof repairs needed, who pays to take down and put back up panels, etc)

@Chris Seveney, I too would be interested in that contact.  Can you DM me his contact info please?

Zachary,

Congrats on locating this deal.  Where is it located?

As for owning a Park with a couple TOHs owned by a single person/entity, we have experience here.  They are investors, and we call this arrangement "Subletting".

*What are some common issues I may run into due to this?  I dont know if you'll have "issues" per say.  You will just need to manage expectations.  I will warn that any inherited tenants can be problematic.  They are usually set in their ways (as developed/allowed by previous owner/manager) and can be difficult.  I would probably make clear your expectations.  If needed, have a sit down meeting where you lay it all out.  If they are way off the mark, then maybe you have the conversation that things aren't a match and they will not be offered leases.  My guess, they will change their tune if it comes to this.

@Nathan Gesner awesome summary and overview.  I couldn't have said it better.

I remember all the hype about the Series LLC a few years back. Dont hear much about it anymore. Was it possibly a (manufactured) important topic designed to put money in the pockets of those who help construct these entity types? Not saying Series LLCs are bad, but are they appropriate and helpful to say 90% of investors out there?  Maybe not.

Thank you for posting.

DMV should have information on file.  Simply call them.  They will likely charge you to generate a new title.

Congrats on your prospective deal.  At a glance, a 9-unit MHP for $280k garners some interest, at a minimum.

Things to consider: 

what would lot rents be in this area?  

What is the makeup of the MHs - specifically, number of bedrooms?  (generally, more bedrooms = more rent, though this model erodes in rural areas)

What state is this?

Utilities:  water on city/public is great.  Sewer on septic, not so great but still may be ok.  And yes with water. look at "bill back" to tenant model.  

Expenses:  I like you're 50% projection.  After pro-forma year one with better management and asset stabilization, you should be able to get this down to 40% or less.  Just beware, MHPs notoriously have high expense ratios, esp those with POHs.

Valuation:  caution with placing too much values on those 1980s POHs.  

Sorry to hear about your predicament.  But, it appears you would like to take action and pivot.  Good stuff.

A house hack may be a good strategy for you, at least for now.  Another option is moving out of Cali.  Way overpriced and has been for years.  There are stats out there that 75% of the population in the major cities of CA (may be cheaper in rural areas) will never afford to be homeowners.  Why - just move!

Or, you can look at a gently used one, maybe 6-8 years old for a lower price.