All Forum Posts by: Roger D Jones

They truly are the most knowledgable tandem currently in the MHP investing field.  I can't tell you the number of times they have helped me through their forum and all the insights provided.  I do think they are a bit biased to only TOH parks probably for all the right reasons for large scale PE investing.  I believe that POH homes though inconvenient can be managed effectively if the market conditions are correct.  As PE groups continue to gobble up every TOH park they get their claws on it will leave by default a lot of mixed TOH/POH parks available for smaller Mom and Pop investors.  We can make them work and drive better NOIs than all TOHs parks... we just have work a little harder than they like to.

Quote from @Logan M.:

Quote from @Chris Mason:

Just sent this over to a client, in place NOI yields a ~9% cap rate on this park, which of course feeds into making 75% LTV doable. All are at less than 1.5 points. Blacking out just enough so that the exact property can't be looked up. Note one of them is at 65% LTV.

Good hunting!

 Can you explain this to me like I am four years old?

 Chris,
CAP rates can be so subjective and hard to pin down so how deep in the weeds do you get on your analysis? Are you taking the seller's stated CAP or are you digging deeper? Do you have a set list of expenses you work off? Just curious.
Thanks
Roger

 71 over three parks.  Mom and Pop operation.  Every knows me and can put a my name to my face.

 No... we allow it to build trust and communication.

Working at one of my parks all day today and took a lunchbreak to visit a neighboring park that had been purchased four years ago by an out of state private equity group with out of state management.  I was shocked.  Absolutely destroyed.  No oversight, Trash uncollected and piled up. Multiple irrigation breaks.  Talking to residents power has been shut off to the park three times in the last two years while water has been shut off four times- all for non payment by the park.  No repairs made to park owned homes.  Rents have doubled with autopayment mandated via credit cards.  Park management phones and emails disconnected.  City has called my maintanance manager twice to go and solve critical water leaks when they can't reach the new owners.

And we complain about unfair journalism and government oversight.   When our weakest links operate like this we get exactly what we deserve.

We have all the same rules and procedures and use QBO for as our accounting software with all forms of payment accepted- online, ach and regular mail.

We encourage communication.  We let our tenants pick their due dates and also if they would like to split their payments within the month.  Also if a tenant has a cash shortage we allow them to modify their payment due date but they have to pay followthrough on the new date.  They just have to let us know in advance.

Logan you seem like a great guy and real go getter.  But as you journey through life building a family, starting a business and acquiring wealth it is ok to have a list of things that you should not have to do and it is ok to pay someone else to do it.  Beyond the fact you need to know how to use it, know what you are looking at and and then have to clean it... it is ok to just punt that task to a professional.   If you have a problem pending... a camara won't mitigate your issue and a professional will want to scope it themselves anyway.  

And yes... I have used one for irrigation and water lines.   I am not a pro so not as handy as one would think.

Fun times!
Rog

Mobile home park development peaked in the early 70s and is all but dead now. Investment dollars go where the returns are and new mobile home parks do not pencil as they did in the 70s. Parks get shuttered and sold for new development when park owners fail to keep rents ahead of inflation and competing CAP rates and other uses become more lucrative.

We have a older TOH park and getting big offers from hotel chains to buy, close and redevelop.  Doesn't align with our values but illustrates that rents have to go up to keep future redevelopment at bay.  

Mark,
Jordan is correct in his analysis but the problem lies in managing not to get thrown out of the seller's living room when you offer him $97,200 for his park.  As large private equity firms and investor groups with fancy names buy up all the larger entirely TOH parks we as smaller private park owners are left with many of the mixed POH/TOH parks.  These large private equity firms don't want to be bothered with POH rentals and subsequent maintenance.  

POH homes can provide a huge lift in NOI depending on rental demographics and home maintenance costs. With your park in question there are a ton of other metrics that need to be looked at prior to making an offer while also considering what type of investor you want to be. Those POH homes are pulling in an additional $108k over the pad income and if you assume 50% expense on those homes your drawing 54k NOI for you CAP analysis.

Remember though you either offer on total CAP rate or pad rate only plus wholesale value of the trailers.  

Sounds like an interesting park with potential.  Good luck.
Roger