All Forum Posts by: Mark Kvam

I am looking at purchasing a small 22 unit MHP mostly owner occupied.  The seller sub metered the water about a year ago but has tenants who have yet paid their bill.  When I purchase I will expect that all tenants pay their bill.  Can I legally shut off their water until it is paid?  What other avenues are typically done?  Tenants are currently month to month but I would expect to have all on new lease agreement when I take over.  Any help here?

That is septic not skeptic.

Mark

Looking at a small 15 unit park.

$200/month pad rent

4 owner occupied pads rented @$200

4 long term RV pads rented @$200 (these people are living there)

2 park homes-need renovated.

water is well. checked out good

2 skeptics have been checked (I will check again during DD)

I estimate value at 8x200x12x.5/.12=$80,000   (asking price $120,000)

no value for the park homes

Question is do I value the RV income the same as the mobiles?  An RV can be easily moved if need be compared to a mobile home.

Thanks in advance to everyone.

Mark

@Adam Johnson Yes it has city sewer and city water billed directly to tenant by city. I thought the same of infrastructure.  That would kill the deal.  I only have $1300/yr for capex so I should raise that in my analysis. What should I budget for water lines/sewer in the older parks?  There are a number of parks in the area.  Most do have empty lots.  This one is in town the others are out some.  I will have to check apartments.

Have a park under consideration:

38 pad, 15 owner occupied, Lot rents $140/mo, last increased $20 in 2012, 23 vacant lots, single wide only, no park owned homes, Southern IL. Asking price $110K, seller financing avail.  Current owner is running it from Alaska.  A sewer line was repaired in 2012 and trees removed. 40 year old community, homes 20-30 years old.

Population of town: 8000 (20,000 within 10 miles), median household income $29,000, median rent $616, median home $62,000.

2014 P/L

Rents: $23,144

Expenses:  $9132

mgt. 1889

maint: 1032

util.: 393

trash: 2890

Lawn: 1750

Ins.:  481

Licenses and misc:  696

Net: $ 14012 (40% expenses)

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Using: 15*140*12*.5/.15=$84,000 value ballpark  assuming 50% expences and 15% Cap.

Offer: $75k, 20% down ($15K), $60K balance seller financed at 5%, 10 yrs. ($636/mo)

I would like to increase lot rent by $20/mo but have to find comps for the area to compare to.  I am at a distance (900miles) from the park.  I would plan on moving in 1 to 2 homes per year.  This would be my first park.

Any feedback would be appreciated. Mark

Does anyone have experience running a small parks (15-40 space) from a distance?  Small parks are what I can afford and there is less competition with other investors.  Is this why many investors look for larger parks?  I am looking at mostly owner occupies lots but some have a mix of park owned homes that I would have to deal with.  Any help would be appreciated.

I have located a 4 year vacant home.  County records have the home's address for contact information.  I have looked at various public records and cannot locate a current owner address or phone number.  Any suggestions?

@Pavel Sakurets  Great info. I had no idea on imputed interest-thanks. I already sold a property for cash and a small ($3000/1 year term/no interest note).  Seemed simpler for both parties.  Now I know better.  My parents sold several properties like this 25 years ago. No problem.  I see I have some research to do.

"So give a low cash offer and an installment sale of 103% of comps, little interest, lowest payment"

  I like your strategy above: I have two properties pending that I can try this with--again thanks. 

I am looking to buy properties with seller financing.  Is there a premium above market rate that is typical for seller financing?  Is it unusual to get extended terms (20-30yr?).

Looking at 2-4 plexes and conversions seem to have a better cash flow then true built 2-4 plexes.  What additional problems should I expect in a converted home?