All Forum Posts by: Ryan Groene

@JohnFedro is a great resource and he has written a good amount of articles on the subject.  also it is a little old, but the original man Lonnie Scruggs Deals on Wheels is a great book to start with.

just have a general discussion with them based on what they are agents on.  you also need to find the asset class that fits your needs and investment criteria and goals. 

first off. look in the park.  look for someone with the nicest yard/pride of ownership in their own home.  you want them to own their own home most of the time.  And it may only be a part time position. pay is based right around $10 a occupied lot, plus $3-5 for every POH.  that is only the minimum industry standard when the manager is only collecting rents and not doing any maintenance/cutting grass or grounds works.  you can also pay bonuses monthly or whenever they sell a new home.  or also pay a bonus based on collections.  

if this doesn't work, then craiglist works as well.  or indeed if its a nicer park.  people from the self storage industry are good to look for as well. they have been trained pretty well...and have an understanding of how things work.  or another park manager...depending on the area.

typically parks have historically traded at 9-11% range.  With cash on cash returns around 20% being standard in the industry that investors look for. f

there aren't to many property management companies out there that focus or do a good job doing mobile home parks. reason is because rents are too low for it to be worth the hassle for them and it really cuts into your profits when operating a park from an investor perspective.

maybe it is different in California, but in Midwest part of the country there isn't much. 

im sure you aware of the typical park management structure...but if your not...typical mobile home park structure is to have a manager on site either that lives there or drives in every day and then the property owner/investor manages that manager. Or you can have a regional manager/asset manager manage that manager.  

your estimates are fairly accurate, but if your willing to buy a park with 750k cash, you could buy a couple hundred pads that produce a lot more over the next 3 years and your capital will be better put to use than developing a park.  it could take upwards of 5-7 years to fully fill the park.  

at full occupancy and all Tenant owned homes, your looking at generating about 189k a year of gross revenue(450*35*12)...this is assuming a perfect payment schedule from tenants and all tenant owned homes and this is a hypothetical perfect scenario...which rarely works this way. then you probably have about a 40% operating expense, bringing your NOI to 113k, making the park worth about 1.1 million on a 10 cap. you may be able to get a higher price, but that is only a 500k increase in value before you even bring in homes.

you could buy a couple hundred pads and push rent, increase collections, bill back water/sewer, and fill vacant lots on a prexisting park and increase the value a lot easier and get close to 500k or more in value add appreciation by doing simpler things than developing.

i wish that development of MHP's were easier and more cost effective...we all know that the United states needs more affordable housing.  but for the time being, i would stay away from doing so just based on a better use of capital at this point in the MHP world.

there some raising money laws out there...REG D maybe....and it does allow for you to raise money from a few non accredited investors...but i would stay away from doing this as you can get into some issues if the property goes south and it could be an issue as non accredited investors are not seen as sophisticated by IRS standards.  

what you could do is find a good deal, network other investors, and JV/partner with them and do it that way. it still could be determined as a security but your not necessarily syndicating deals.

as always, check with an attorney, which i am not 

shouldn't be more than a few hundred dollars a year...it all depends on the cities tax rate. and they will highly depreciate because they are a mobile home, youll be lucky to get the same amount for the house in 5 years.  and very unlikely to get close the same value in 10 years.  there kind of like cars...once they leave the dealers lot/factory they lose value quickly.  

what he probably means is that since the RV lots are traditionally smaller, he would hook up a mobile home onto 2 lots since they are bigger. only issue is that you may have to set up new utilities , just depends on how the RV lots were set up.

also, you want to check with the city to make sure the number of pads you are licensed for.  because zoning for an RV park is different dependent upon states/city.

an RV is not sanctioned by HUD so therefore there is different requirements for set up etc..

What you could always do in the meantime is keep the RV lots as RV's until you can get some homes in there. then convert them to TOH's.

I wasn't sure how much experience you have in at looking at parks.  mainly you want to be looking for pride of ownership in both the community and the actual homes and their yards.  an example of something that would be an opportunity is a park hat has unkempt lawns, cars just sitting on blocks, trash everywhere, is there skirting missing on the homes, is there a sign at the entrance of the park, is there a phone number, is there stuff everywhere in peoples lawns.  these are easy things to fix and rather cheap to do as well and drive a lot of appreciation just by fixing all these things.

some things that are harder/cost more money to fix is are the roads so bad that a small car would get stuck in the potholes, are there a ton of empty lots with no homes.

at the end of the day its all about location and how your test ad does when trying to pull potential tenants.  that is the true test of a location.  look for about 20 calls in a week.  

also just call or go to the police station and ask them about that park and what they think of it.  theyll tell you if its drug/gangs. or just domestic violence or drinking.  

most of the time there is only one or two bad apples in the park, once you get rid of them and set the tone that you don't mess around...meaning you inforce the rules and need rent paid on time...then most people will clean up their yards and pay on time.