All Forum Posts by: Roger D Jones

Quote from @Logan M.:

Quote from @Roger D Jones:

Are main streets being plowed by the City?  Are neighborhoods being plowed by the City?  We have rural park with no City services throughout the area yet residents expect us to plow the park.  We don't do it. 

Problem with hired services is you are the last guy on their list and by the time the get to you the snow is compact ice or melted.  

 I agree with you and it is tricky. I may make each person responsible for a certain area in front of their homes. Maybe I even get a good deal on snow shovels during the off-season and allow people to keep one.

 Logan, I guess so much depends on where the park is located and the climate, city services, etc.  If the city doesn't plow the roads around the park I am less inclined to pay to plow the park roads.   It is tricky but you don't want to 'create' an annualized expense that may or may not make a significant difference for more than just a day or two.   

Are main streets being plowed by the City?  Are neighborhoods being plowed by the City?  We have rural park with no City services throughout the area yet residents expect us to plow the park.  We don't do it. 

Problem with hired services is you are the last guy on their list and by the time the get to you the snow is compact ice or melted.  

Best advice is to not do it.

Always check State law in conjunction with city/county ordinances.  Over prior decades cities and counties usually cut and paste stipulations into their regs and then as state law change they fail to update their codes.  I read once in Arizona that tiny homes on wheels are considered non permanant structures and allowed in state parks and RV parks.  I never double checked that and am no lawyer... just a recollection.

I love the trampoline conversations... always the highlight of my year.

Don't do it...  Here is an interesting podcast on why not.
https://www.mobilehomeuniversity.com/mhp-mastery/the-new-par...

Quote from @Sherry McQuage:

Quote from @Roger D Jones:

Quote from @Logan M.:

Three little known truths about Mobile Home Parks:

1. The cash flow is great, but rent collection is always a challenge. I have at least one tenant per park that I am always fighting with about paying rent.

2. You can make more money by holding onto homes in parks but it creates way more work and I don't believe it is worth it in the long run.

3. In Some of my communities I make more money on seller financing the homes I own than the lot rents.

I will add more of these truths but I find most investors without parks don't know some of this information.

 With regard to point 2 it is very dependant on rental demand.  We drive double the cash flow out of our rentals vs our TOH rentals.  We keep them in good shape though and have a maintenance manager hired as an employee to stay ahead on upkeep and maintenance.  Website to submit maintenance requests keeps thing timely.  Even with the labor expense we are way out front.

 What does TOH mean?  I'm just now starting to learn about Mobile Home parks...I might be buying one in the next year.

 TOH means Tenant Owned Homes; POH means Park Owned Homes.  Easy Cheesie!

Quote from @Sherry McQuage:

How do you find out what fair market rent (of the lot) is for mobile home parks?  

 Just call around to different parks.  Most established park owners know what the pad rents are locally so with a couple calls you will have a good idea.  You can also look on RE listings for mobile homes for sale in parks as the lot rent is usually noted in the listing.  

Agree, I did go over the calculation with the seller to explain what return I would be getting before offering him. He said he would take at least $275K to make this deal work. 

Ok... now you got 'the number'.  Probably puts you at a 7 CAP at current performance and closer to a 10 on performa with a rent increase, bill back on garbage and 10% delinquency.  There is still some significant upside here but at 275-  downsides start to loom a bit larger.  This is where you have to get very unemotional and steely eyed.  Get his rent rolls, taxes, water, road maintenance, garbage bills and the cost of pumping four septic tanks per year... then just start doing the math backwards.  Lastly the two of you have to negotiate the owner financing.  

I am going to politely offer an observation and it is certainly only that... just an opinion.  At $150 per month pad rental the owner wasn't really interested in making money from his tenants.  He either is afraid of them or likes them too much- whatever it may be.  Now he wants to sell and make all his money off of you while leaving the gritty work of raising rents and billing back utilities to you.  And with owner financing he is also trying to make more money off of you.  Nothing wrong with that... but you have to make money too!  This deal has to work both ways.  Certainly not being at market with his rents creates an opportunity for you but he doesn't get to price you out of that future oppportunity.  If 275 is not going to work then you just give him a different number and tell him that is the best you will do.  You have to make money too and you don't have a lot of wriggle room at 275.

Lastly and most park sellers don't like it but they need to open up every septic tank in the park for inspection and if necessary pumping.  Not sure what it costs to replace and tank and drainfield in Alabama but you do not want any surprises after you purchase the park.  The sellers always squawk about it but for me that is a non-negotiable.

I think your deal has some definite upside but most of that comes when you can get the rents to 250 and if you can stay positive cash flow until then.  

My uncle did one from the ground up.  It was fascinating because he developed it where I thought was the middle of  God Awful Nowhere here in Washington State.  What I didn't know at the time though was that prior to developing he did a ton of research on travel patterns in the state.  He looked at where do people drive on vacation and how do they get there.  Then he overlaid current RV parks over the patterns on his map.  Picked up five acres of desolate farmland along a major interstate in Central Washington and boom!  Added a dozen or so spaces for truckers even.  Hugely successful.