All Forum Posts by: Russ Wallace

Terri, I don’t think the strategy of emphasizing the increase in tax revenue will get any traction as Mecklenburg County has over 350,000 parcels that are surely valued in excess of several billion dollars. 

Given the Charlotte zoning ordinance's complexity (one of the most difficult I've ever encountered), I would find a civil engineer or land use/zoning attorney who has firsthand experience working with planning dept staff. A short 10-15 minute discussion of your need should clarify whether there’s a reasonable possibility of obtaining approval for your desired use.

FYI: the ordinance defines two types of daycares: a “Childcare Center” can have 13-79 kids; a “Childcare Center in a Residence” can have 6-12. The former is allowed in a large percentage of districts which could work in your favor: multi-family, urban residential, mixed-use conditional, transit oriented development, institutional, research, office, business and even urban industrial/industrial. 

James, before you meet with the city I suggest investigating whether there are as-built drawings on file with the jurisdictional authority. The city's utilities and/or engineering dept(s) will undoubtedly want them to determine whether the distribution lines are an acceptable size/material and if they were installed according to the engineer’s specs. They may also reduce the amount of onsite excavation should the city want to perform a limited inspection of the lines before assuming maintenance responsibility.

James, I agree with Jeremy....check with the Indiana Utility Regulatory Commission to determine whether there are state laws that address the submetering of residential water/sewer service before making the changeover. 

Tommy, based on my experience a MHPs income and expenses are only one part of the puzzle; the property’s physical characteristics require thorough investigation as well. In order to develop a clear picture of the property, I suggest the following inquiries:

Check the park owned homes (POH) status. Does the seller have clear titles? Do the titles match the homes? If any are missing, what’s the procedure/cost for getting one issued? Are the POH all 3 bedroom/2 bath models? Do they require interior/exterior remodeling in order to increase the rental rate? Does the HVAC unit, roof, etc have any remaining life left? What’s the mfd date of the POH? Are any too old to be rented (check the jurisdictional authority’s (JA) Unified Development Code or Land Development Code for language specifically addressing mobile homes and MHP)? Are there Certificates of Occupancy on file for all of the POH? Can the JA confirm the installation was approved/permitted?

Investigate the water/sewer systems. When were they installed? What are they made of? Are there “as-built” plans on file? When were the distribution lines last scoped/inspected? Are the POH on individual septic tanks? What size are the tanks? What’s the maximum number of tenants allowed for each POH based on tank size? What do the most recent environmental inspection reports tell you? Are there deficiencies that the JA wants resolved? Have there been any recent discussions at the departmental or executive level of the JA regarding a mandated assessment for public utilities improvements?

Clarify the property characteristics. Who owns the roadway and what is the maintenance standard? Is there a recent survey on file that specifies private road ownership? If a local JA governs the maintenance standard, what is it? What are area roadway/paving contractors cost estimates for repairing the road? Have there been any recent discussions at the departmental or executive level of the JA regarding a mandated assessment for public roadway improvements? Does the property drain well or have standing water after it rains? Can the park be improved without triggering new JA regulations requiring more recreational space or larger home lots?

Determine the area "market rate". What's the local area HUD 3/2 and 2/2 Fair Market Rental Rate? What are comparable MHP lot and 3/2 or 2/2 POH rental rates? Do the comparable parks look better or worse than the subject property? What amenities, if any, do the parks have? Do the comp parks have any vacancies? What are the local B and C class apartment property 3/2 and 2/2 rental rates? What are the rental rates for 3/2 and 2/2 single family homes, apartments and mobile homes advertised in the local newspaper and on the web? Does the county Housing Authority have any Section 8 or VA subsidized tenants needing rental housing; if yes, what are the 3/2 an 2/2 rental rates? What do they require/look for in qualifying a rental unit?

Understand the market demographics. Is the county population growing or shrinking? Are the number of renter occupied homes growing or shrinking? Is the county unemployment rate growing or shrinking? How do all of these metrics compare to your state and the nation?

Compile a parts list. Make a spreadsheet of items required to remodel a POH inside and out (doors, windows, appliances, cabinets, flooring, roofing, siding etc) with the distributor’s name, their part number and item cost. You’ll need this to accurately estimate the cost of improving a POH.

Confirm the income & operating expenses. What info can the current property owner provide? Can it be confirmed? What rent amount do the tenants say they’re paying? Who pays for trash removal, street lights? How much were the last three years property tax bills? Are property taxes stable or increasing? What does a property liability insurance policy cost? What does insuring the POH cost? What are estimates for lawn/landscaping maintenance, clearing snow from the road, etc? Will you self-manage the property or pay for someone else to manage it? What do local plumbers, electricians, HVAC techs charge for service calls?

Finally, I don’t add anything to the property’s value for POH, infrastructure, amenities, etc. I’m buying the property for cash flow, not the land, homes etc. 

Steven, check with the jurisdictional authority (city or county) for the location where you intend to move the homes to. They should have a Unified Development Ordinance or Land Development Code document (many are online now) that could have language regarding the use of mobile homes in their jurisdiction. You could also call the authority's planning dept staff to ask if they have a separate document specifically devoted to mobile homes and mobile home parks. 

Tony, I can't speak knowingly about the current and/or future market conditions in Georgia. However, in North Carolina MHPs are very good long-term hold assets provided the right market attributes - a growing population, stable employment and a restrictive land use code (high entry barrier for new MHPs). SFR housing doesn't compete for the same tenant we want because of higher rental rates. Parks with a large percentage of park owned homes (POH) can be converted to pad rental communities over time by several means. And the POH we typically encounter (in 25-50 pad parks) were mfd in the 1990s to early 2000s; occasionally we'll come across an older model.

I completed the CCIM four course curriculum in 2011. The knowledge gained is well worth the cost in time, effort and money. The CCIM negotiation class is, in my opinion, the best there is. I also recommend Mortgage Banker Association classes (I've taken mortgage loan underwriting and asset management) and buying/studying books devoted to key skills you may need (e.g., I have textbooks on property appraisal, commercial site analysis and CRE syndication in my reference library).

Eric, I manage the remodeling of rental mobile homes for an investment group. Based on prior experience as a residential contractor (and an extensive spreadsheet of interior/ exterior parts/supplies) I believe the following to be accurate. An asphalt shingled roof can be easily stripped above the damaged ceiling area however the water could be getting under the shingles up-roof from where it's shown-up inside. A "sure repair" may require removing ceiling drywall and locating the leak on the underside of the roof sheathing. Estimated cost of roof/ceiling repair $1000. Window cost depends on size; 30x54 six light vinyl frame with screen will cost ~ $200; install cost ~ $100. I wouldn't put carpet back in it; laminate wood grain will cost ~ $0.77 SF and 12' wide tile pattern vinyl sheet ~ $0.49 SF plus installation. 30x80 interior door slabs: smooth hollow primed $44; six panel hollow primed $54; either will require cutting/installing the lockset and mortising for hinges (handyman work). I would buy a used fridge, stove and dishwasher (check the space dimensions) on CL for ~ $250 each. The handyman doing the roof repair should be able to prime/replace the rotted fascia boards too. If needed, a new Goodman 2 ton (not sure of house SF so larger unit may be required) 13 SEER HVAC complete system will cost $1500-$1750 plus install.