All Forum Posts by: Ian Tudor

@Taylor L. - I used MHVillage to see what parks were in the county and did visual scans of Google Earth. 

By cold calls, I mean phone calls. 

@Taylor L. - Sure. I use a modified version of the deal sourcing strategy that Kevin Bupp and Charles DeHart outline in their mobile home park podcast. It is some of the first few episodes. I connected with them in September 2015 and built a database of 1,500 parks in my footprint. Off the database, I send direct mailers and make cold calls to contact owners. If you do enough, you start to find the motivated people. 

@Laura H. - good question. My background is Finance. I started off after college in accounting and hated it. I switched over to commercial real estate valuation and learned the acquisition business for a few years. The company I was working was going through a merger and I decided to jump off full-time since I had a deal wrapped up under contract. 

Over the past 8 months of being full-time, I've learned a lot about operations which I had little knowledge of.  Lots to learn!

@Andrew Syrios - We, there are two of us, partnered with an experienced operator to get it done. We received a finder's fee for finding the deal. We get an asset management fee for looking over the strategy as well as a property management salary to get operations experience and increase our cash flow. 

One of the benefits of going with an operator for a value-add deal is they have the lending relationships. We couldn't go non-recourse in this situation given the occupancy levels. It was a 65% LTV loan before we refinance into CMBS after a few years of lease-up.

Last month, my business partner and I closed a $10.5MM mobile home park deal. It is over 500 pads in Hampton, GA, near the racetrack. I sourced the deal via cold call about a year ago. I've been working in the business for about two years. 

I see a lot of people on the forum asking how to get started with no money. It's possible. My family or friends didn't help with this deal. My parents are in the medical field. I was able to leverage the people in my network to make it come to fruition. 

Before I write a lot of unnecessary details, I'm willing to answer any questions that you may have related to the transaction or mobile home parks. 

@Wes Short - It's a fair question. I did a deal with an experienced mobile home park operator about 9 months ago for similar reasons. I wanted to get in the real estate game. I sent my business partner an email out of the blue. It worked.

The best way to bring value is to bring a deal, especially if you have no money or experience. Money is usually more available than good deals at least in today's market. People usually answer emails and calls when they directly benefit. 

Use BP and all other resources to understand how to source and value deals. Then network with a lot of people and bring them deals once you find one. Over time, you will understand what people want. Don't be greedy on the first few. It's about getting started at your stage. 

@Conor Colburn - I have a few been apart of several partnerships in my life. Some were close friends, other old bosses, and some I found online. 

These are the qualities that I now use to weed them out. 

Responsiveness - How quickly does it take to answer a question or email? I was in partnership with one person and it several months and multiple follow ups to get him on the phone. It was hard to do business this way. 

Understanding - What happens if the investment goes south? How will they respond? I purchased a property, and it took close to 5 months before I sent out the first distribution. It was supposed to be soon after taking over. The investor was understanding and supported the strategy. 

Autonomy - Do they need a hourly check-up? Can you trust each other to get the job done? 

Competencies - What skills do they have that you don't? I use to be attracted to people that had similar skills that I had. It isn't an effective partnership. 

In any industry, I've found that personal recommendations from other people that are not incentivize to give good reviews is helpful. Reputation speaks volumes.

It might help to start small and then reassess after a few months.

Also, take a list of the things you aren't good at but will need to be accomplished for the real estate business to thrive. Seek out those people. 

I haven't found any fool proof way to find great partners. It's hard to know how someone will act when the wind isn't favorable. 

@Jose Guevarra - look at ULI (urban land institute) resources. They sell textbooks online (amazon) as well that will help you with real estate. They are the largest real estate think-tank in the world. 

@CJ Witmer - Seems high for only 7 units. For something this small, you would need a higher cap rate. The exit of small mobile home parks are tough

@Brandon Turner - The way I look at mobile home park deals is sum of the parts. In other words, value the lot rental income and then add in the park-owned home value in separately (condition, year, size). Now in your situation, you will likely discount the value of the notes. Be conservative. One of the reasons why is that several people don't pay through entire term. When this happens you have a home that probably needs rehab before you sell it again. Or you sell it as it but get less than your original note value since it isn't move in ready. I've heard these can take a while to sell off. 

Another strategy is purchase the park where you are paying a nominal amount for homes. This way you can sell the homes below market value and boost lot rent up substantially. For instance, you sell a $10,000 for $4,000 and charge lot rent around $75/mo higher than the rest of the park because you gave them a deal. Now when you look at a capitalized income stream on your sale, you are actually ahead. $75*12 = $900 / 10% cap rate = $9,000 in reversion value, since increase in lot rent doesn't increase your expenses. It goes straight to NOI.