All Forum Posts by: Dave Rav

Many of the others who posted are correct.  I own a hybrid MF property, which includes MHs on it.  It’s a cash flow monster, but the expense ratio is certainly higher.

Attempted to do a CF refinance 6 months ago, and it was virtually impossible.  Even after checking with regional lenders, CUs, local banks, and investor-friendly lenders. The primary hangup were the POHs.  Not only would they not lend on them, they wouldn’t give me credit for the income they produce either.  The POH rental income accounts for 50% of the overall property CF.

Now you may still  have a great deal.  My advice is similar to another comment- have a plan, and run some extra DD and scenarios.

Well, what I’ll say is it definitely doesn’t hurt to ask for DD items.  Why not ask for 2 years rental history, some tax returns, and current rent roll?  Never know what you might get..

And assuming smaller investors don’t keep records is a poor assumption.  Even if you get 50% of the info needed, that could prove quite helpful.

I agree with the previous sentiment.  For seller to have zero financials or history is a little concerning.

I always like to say, if I can’t verify something then I can’t give credit (ie, either I will charge for it or deduct it from my PP).

I agree with @Drew Sygit.  You’re at risk for an attempted robbery of the kiosk.  If not a tenant, then possibly one of their associates.  The only way I would remotely consider is the case of a 55+ communities or a super high end niche Park.

Do the online payment option.  We use and Schedule My Rent.  They allow debit, credit, and even money order payments (accepting MO’s is huge).  Small fee.

Hi Janine!  Like you, I also have what I call a “hybrid” multifamily property.  It’s a mix of houses, MHs, and land/lot.  In addition, I also have an MHP.

In looking at MHP deals, many things to look at.  Here’s a list, which provides a good start:

-Developed vs Raw land (meaning infrastructure, lot/pad delineation, utilities in place, etc)

-# of filled lots?

-Are homes TOH vs POH?

-due diligence.  Include presence of formal leases on all units.  Find out who paid, who’s behind, and any evictions in-process.  Ask for prop mgmt records.  This includes seller’s  tax returns, if they’ll release them.

-Homes.  If POH, be advised typically very little value is placed on these homes.  Unless they are aged less than 10-15 years old (and 3-4 bedroom, in my opinion*) value per home is limited.  You can’t really take the retail value per old home and add it to PP; this isn’t the industry standard.

-Know your market.

This should start you off.  I can provide more 1-1 help if desired.  Inquire within.  All the best!!

@Giancarlo Ameglio yes, I have done the RTO model.

There are some stats out there reporting that up to 80% of prospects dont see it through to the end.  And thats ok, you just complete whatever repairs are necessary at time of turnover, rinse and repeat.  Just like in the mortgage business, try to get as much skin in the game as possible (those who put down more are theoretically less apt to default).  However, there typically comes a point where getting them to put more down just doesn't happen.  Maybe with stick-builts higher DPs are possible; used mobile home "buyers" typically cap out beyond a certain point.  My theory as to why = those with more money in the bank, have more options than purchasing a used MH.  In my experience, my DPs have ranged from $2k to $5k for used mobiles.  Older MHs are especially harder.  

All the best!

Stucco has been associated with moisture penetration claims (in some areas, and with some application methods).  Just so you're aware.  

Hardi-plank should prove to be more expensive than your current quote.  Yes, it may last 50 years, but will even still own the property then (you likely dont need that level of workmanship).

An option could be to do the work in sections.  IE, if building is a square, do one side at a time  Maybe do 1 side every 6-12 months to spread out your costs.  Just a different way to look at the problem (and break OUT costs, in the case you cant REDUCE costs)

This sounds like a pretty good deal.  And I think your analysis, at a glance, appears fairly accurate.  

I purchased a comparable property (though in a different state) that mirrors these numbers and is a cashflow beast.  Your property appears to have a lower expense ratio however.  One thing to examine and account for = age of homes.  Older homes are just about guaranteed to come with more regular maintenance needs.  Account for this!  Trust me, my property is a real-time example.  

You mentioned adding units, RV spaces.  In doing so, account for infrastructure and utility impact and setup costs.  I actually said no recently to adding a MH pad to another property, as the water and sewer setup costs were approaching 15k.

Further, expect most banks to bauk at this deal.  Even the national MHP lenders may say "no", as the deal is below $500k and less than 15-20 units.  In my experience the MHP lenders want larger deals.  Your best bet will be smaller, regional banks or CU's.

Lastly, for analysis you can also look at cap rates.  Either way, I think this one boast good numbers.  

Yes, you are correct.  Especially when looking at financing (or how any bank would view the property), probably safest to analyze numbers based off LR.  Further, banks' views of the value of the actual MH can be skewed (low) as well.  Especially in the case of older homes.  Its a bit unfair, as from a cashflow and rental business perspective there is value in these assets - without a doubt.  They generate income.  

I have property in West Columbia.  We are currently charging $325/mo for lot rent on one our MHs.  I do feel your statement of $400/mo (at least for greater Cola) is a bit high.  

Though most markets saw crazy appreciation over the last 18 months (and some continue to appreciate), I feel Columbia's gains were not as outsized compared to say, Charleston.  When I did an analysis about 9 months ago, there were still LR rates easily found in the $250-300 range.

Best!