All Forum Posts by: Roger D Jones

@Jason Velie is right.  Cash flow is a trickle with a lot of hard work.  Find a park a distressed park, find some distressed trailers, put your husband to work.  That is what my wife did and she is loving the cash flow.  

A whole lot to be wary of- well, lagoon system and then those POH trailers.  Some serious baked in costs for each.  Sixteen homes to inspect- roofs, hot water tanks, soft floors, siding damage, decks, porches, furnaces.  One of our parks is 60% POH and in my experience the only way that park pencils as well as it does is to get through all the major repairs, get the homes 'right' and then keep them 'right'.  That means weekly on going preventative maintenance fixing small problems before they become big problems.  Usually with an on site maintenance handy man versus the heavy costs of commercial services.  

We all see a lot of these parks for sale.  Grandpa and Grandma take five acres on the back forty and punch in a well and sewer (when it was cheap to do so), run some water and sewer lines with the old backhoe.  People start moving in with their TOH homes (back in the day when everyone could afford one) and the park starts to fill up.  Eventually people die off and the homes go up for sale cheap, get abandoned and the park owner picks em up cheap and takes in the extra little bit of cash for the POH rental.  Eventually the park gets heavier and heavier with POH units.  Years go by and eventually Grandpa gets tired of fixing porches, nailing gutters and steam cleaning carpets that 'have a couple more years in them.  Wants what he thinks is a market price for something but doesn't understand the albatross he has created over the last 20 years.  The owner took the back end profit for his park during the life of the POHs now wants to cash in again.  

Now maybe I am wrong and all the POH homes are spectacular and very well maintained with new roofs, furnaces and no water leaks.  Every situation is different... but if those POHs are busted up the park is worth only a fraction of what he is asking.

All of you, in all your wealth, pressed shirts and fancy headshots squealing about $175.  Just explain to her you can't cover every utility outage, then credit her the $175.  Be a human being first, a landlord second and an investor third.  Your sunrises will be a little bit brighter.

First off... separate the two entities. Mobile home park and house. Value the house on it's own with comps and then run the CAP on the park for it's value. Don't be overly optimistic. Once you get two numbers add them together then take 20-25% off the top. MHPs with SFHs are albatrosses unless you plan to live in the house and live there forever. One of the key upsides to MHP ownership is building the business and selling it for a profit down the road. Having a house attached makes that much more difficult. A major majority of MHP buyers are multi park owners or PE investors neither of whom are interested in POH trailers let alone SFHs attached to the park.

Your buying something that will be tough to sell.  What your pay for it needs to be reflective of that.  Take your 100k and find a straight up park with seller financing.

A lot to unpack but my overriding 'advice' for what it is worth is to make sure you seperate the values of the park and the tri plex and analyze independantly.  When you find an appropriate value... add them together then take a significant reduction in offer price.  Bottom line is they are worth more independantly than together as they are apples and oranges and tougher to sell when bundled together- when you do decide to sell.  

Also avoid Section 8 like Grim Death.  There is a reason so few landlords accept it through their rentals.  I have tried it a dozen times or so and it is consistently, 100% a failure- each time costing me thousands in rehab.  

 Gulp....

 Samuel has it figured out... good resource.

@Avery Robertson  Congrats on the close.  Sounds like you made a good decision based on your needs and circumstances.  Glad it worked out.  Looks like we have an Idoho deal here... I live in Clarkston/Lewiston.  

I know what you mean @Rene D.!! The best deals are with the 'mom and pops'- we all know that. But with that comes some challenges in getting through their record keeping to get to an actual and true P/L to start evaluating the CAP. Old school ledgers and rent rolls written on notebook paper... I got that with my Omak park. They did not even have records... just paid the bills and pocketed the cash.

But you know enough to be able to fill in the blanks and get close... public records, utility companies, visiting with residents, walking the park and networking with other park owners.  If I was going to sell one of my parks I would not provide my tax returns or bank statements but would provide my P/Ls, rent rolls, list of utilities, taxes, insurance, etc.  

And in some cases this is an opportunity for you.  They don't have any analysis or record keeping.  No financial uderstanding other than 'we make a little money and try to keep the rents low'.  That is frustrating but it is also an opportunity.  You see opportunities where they lost interest in looking...

 That is what I did.  Found a park that was closing and started knocking on doors.