All Forum Posts by: Wilson Lee

Net operating income / sales price = cap rate

I just took your numbers,  If the 3,500 is not net operating income.  Then take out your operating expenses and do the math again.  The cap rate would be even smaller.

For a mobile home park,  cap rates that I looked at where 8% to 10%. 

As for the part about owning the trailers,  Get the year make and model and pull the value from the NADA listings.  You may be shocked (good or bad) to find the retail value of the mobile homes.

http://www.nadaguides.com/Manufactured-Homes

Renting mobile homes is not the same as renting mobile home lots. When renting the lots, Mobile home owners will stay put for years as they don't have the cash to move their trailer. But people renting mobile homes can move out when ever. So there is much more turn over cost. The cost to do any repairs in a mobile home cost about the same as a SFH. But, rahab in mobile homes do not increase sales price the same as in SFH.

The 6 homes on 4 lots is also something to look into.  Check with the zoning board to see if that is a violation.

Do you still hold title?  If you do than yea you can.  But lenders may not be to eager.  The new mortgage would be subordinate to the recorded land contract as the loan is recorded after the land contract.   

Try talking to a few loan officers.

I would look for value add.  

Contrasts,  you have one under contract. That is more experience than most in mobile homes parks, my self included.

That 0.014% cap rate feels low.  Especially for this asset class. 

If you continue:

Look into hiring a qualified septic tank installer to do an inspection of the tanks.   They should be able to tell you the life remaining.  Also ask the owner for any paper record of the date they where installed.  That may be hard to come by though. Record keeping is not often prioritized by Mom and pop parks. 

I would also check with the local zoning and permitting office.   Some parks where I am at are barred from bring in new trailers as the county adopted new rules about mobile homes if flood plains. 

Correct they are not currently in default.  I should have clarified.  He should give notice to vacate as shortly as the lease will allow for.  Then file if they hold over.  He can show leeway in the actual time he allows them to stay.  But he should preserve his ability to evict if there is any trouble.  He may have obligations under his mortgage.  We would all be sad if his loan was called due.

Check the terms of your loan.  There may be a clause requiring you to occupy buy a set time.  Be sure to cover your self and give proper notice.   Go ahead and file for eviction with enough time to go through the full eviction process in time.   file regardless as to rather they are being comparative or not.   It is better to be little rude and safe than to be nice and in breach of contract. 

Try cash for keys.  Even a small amount like $200 can work.  Just don't forget to fill for an eviction regardless!

I have never had an agent bring me a deal that was truly doable.  I hope you get a rocking agent that understands how you want to invest.

I had better success finding a deal first. Then contacting the sellers agent/broker 

Cold call section 8 land lords form the section 8 website.    It takes 15 minuets.  And it is way more fun to talk and network with  real investors than to stare at a map on zillow for 2 hours. 

Check out Fannie mae home path.  You can find a good deal there.  Owner occupants get first pick of the lot too!  You may find you have no competition on a house that needs a little work. 

You could get a large equity position that you can access in a HELOC to help buy more rentals.