All Forum Posts by: Derek Robinson

You are paying around 17k per lot, which is market value in my experience around the Carolinas (and a lot of the South).  Without looking at all the financials, I'd say you are not over paying.  As stated above, turning the park owned homes into seller financed units to the current tenants is your best bet if the homes are older.  You might could keep them for 6 months or so and evaluate your profit/loss and decide at that point if you want to continue to manage them or sell them off.  I've got several parks with a few units I own.  They were in good shape when I bought the parks and I have property management taking care of them and so far they've been profitable.  I'm keeping the option to sell them in my back pocket though ;-)

I run into this with mom and pops all the time.  I see it as just part of doing business with this type of asset.  I'm assuming they don't have leases either?  If no leases, then you can come in day one with a lease set to the current amount the owners are stating.  Usually mom and pops are well below market rent.  If the park is all lot rents (you don't own the trailers) and they lied about the rents and they are lower than stated, then brining the rents up isn't a big deal because most lot renters can't afford to move their trailer, so they'll stay.  If they complain, you can pass the buck to the former owners and say you purchased the park based on lot rents being a certain price.  If you own the trailers and they lied about rent amounts being higher than they really are, then same situation.  If the amount they lied about is a market rate, then you should have no problem finding a new tenant if the old one moves out.

Every mom and pop I run into seems to tell the truth.  Some are so disorganized that they never take good financials.  Or they let one tenant cut the grass in common areas and another collect rent and another do handyman work and each of these people get a discount on their rent.

Seller financing can be a beautiful thing!  I just put a 15 lot park under contract and the owner agreed to carry a 25 year note at 2% with 14% down!

Hey Travis, welcome to BP!

I live in Asheville, but this year have been purchasing in Spartanburg.  Everything I buy cash flows decent, but I'm speculating good appreciation over the next few years.  I have three multifamily and two single family at the moment.

I'd be happy to answer any questions or help analyze any deals for you.  I currently make 100% of my income from investment property.

@Neil Goradia GIS doesn't show ownership of roads in the county the property is located.  When you click on any county maintained road, the fields just go blank.  This road goes blank just like all minor and major roads around it.

@Jeremy Hart (1)It's hard to believe, but I've seen it happen.  The house I live in now faces a road with no car access or parking.  Back in the 50's the road kept flooding because it was so close to a creek.  They moved the road closer my house and four other houses.  Since they took away parking and car access, they cut an alleyway behind the five houses.  From the 50's until the 90's they came in once a year and added gravel and graded it.  Then they stopped.  My neighbor (who's lived there all his life) called they city about maintenance.  They said "sorry, we don't maintain that anymore".  So now we all have to keep it maintained.  He tried fighting it out with the city, but didn't get anywhere.

(2) I've got clear title to my property with no issues.  The road leading to the property is the issue.  I don't own it.  From property records, it appears the county owns it, but they claim they don't.

@David Dachtera The attorney I contacted did not charge me anything for his time and the preliminary work, which is why he didn't pursue it further.  His opinion was that the county could not force me to do the work since I don't own the property the road is on.  Until they send me some official documentation requiring me to make repairs, then he didn't think it was worth involving legal action.  So he's not a bad attorney, just trying to save me money.

@Belinda Lopez, I think it's like you said, counties can choose to abandon certain pieces of property if they so choose.  It seems like that is what is happening here.

I recently purchased a Mobile Home Park.  There is a small road off the main road leading to the park and the park is the only property the road services.  It you think of a T, my park is at the top of the T and there are two neighbors on either side of the T.

When you look at the property records, the road is sectioned off separately from my property and the neighbor's properties.  It is labelled the same way as all the other county maintained roads in the area.  I looked through the title work and there are no special easements or anything mentioning the road.

This road is in pretty bad shape.  I messaged the county to put in a work request.  They messaged me back stating that they do not own the road, so they will not make repairs.

To make this story more interesting, the county called me a few weeks after I purchased the park telling me that 'my' road needed a new culvert placed under the road, the current culvert was too small and when heavy rain falls, it is causing flooding and the neighbors have been complaining.  He said this was a new problem and the neighbors just filed a complaint.  I told him I thought it was a county road, and he said it's my road and if I don't remedy the situation, they could shut my park down.  Now this was not a 'formal request', just him calling.

I spoke with the former owners (owned for 14 years) and the owner before them.  Apparently the county as been harassing them for the past 16 years to fix 'their' road and threating to shut the park down if they don't comply.  The 2nd to last owner offered to fix the road if they would deed the land it sits on over to him, which they refused.

I spoke with an attorney and he said to do nothing.  If they send me official paperwork demanding that I make the repair, then he'd take on the case and fight them on it.

Anyone had any dealings with this?

Oh, just spoke with my attorney.  The partnership structure apparently does NOT exclude me from SEC regulations.  Seems like the only route to go without paying insane fees would be the personal promissory note path.  Like you said @Jeff Greenberg, as long as the deal is successful, the SEC is none the wiser.

I find it hard to believe that with all the investors and deal makers out there are taking every legal step to be compliant with SEC.  Maybe it's a can of worms I shouldn't have opened.

I'm looking at using investor funds to purchase a property out of state.  I was talking with an investor friend of mine that is terrified of doing this, as he's been advised by his attorney that this involves issues with the Security Exchange Commission.  I spoke with my attorney, who reached out to a colleague that deals with SEC.  They said to do this properly, I would rack up 10k to 15k in legal fees to be compliant with SEC.

According to my attorney, two ways around this would be (1) have investor funds tied to me personally via a promissory note. Funds should not be tied to my LLC or contingent on the success or failure of the property in question. (2)Form a partnership for the property, and each investor has a share of the profit and ownership stake.

Anyone run into this kind of thing?  Are people using investor funds out of state all the time and what the SEC doesn't know doesn't hurt them?

@Tag Ogren. Welcome to BP! I'm in West Asheville and a full time investor. I don't do much with commercial, but would be happy to bounce ideas around and lend any advise I could. I'm mostly involved with SFH and mobile home parks. I also have a small apartment building and a few commercial sublease situations.