All Forum Posts by: Tyson Cross

Yes, to echo what Jay said above, I would not suggest you go into a park with no cash reserves. As mentioned above, you are not likely to get a HML in second postion - you may find a community bank to do that, but they're going to make sure you have the ability to cover the payments (liquid cash reserves) usually up to 6 months.

Second, even if you have the cash, you need to educate yourself on mobile home parks. How long have you been looking at them? There is a lot to know and frankly, you shouldn't pull the trigger on them until you thoroughly understand everything about them. There are several different types of turn arounds and each one does take some capital, unless you find the rare park that ONLY needs increased rents to work. Even then, the tenants will look to see what improvements you make when you raise rents. 

To build equity in MHP you do that primarily by improving operations and increasing the NOI. To do that, you generally need some capital, if even a little. You certainly don't want to use the cash flow to do improvements, you will get yourself in a hole.

I'm actually selling my house to buy my first park this year. Good luck!

@Jeremy Seely Walter is right. Barry & Associates is good. You could also try Jeremy Snow at Colliers. He does a lot of multifamily as well. Feel free to reach out if you need anything else. 

I believe prices will start to cool. We already saw it late summer last year. The price increase can't sustain the levels it has the last 3 years. I don't believe we're in a bubble though. With the stricter lending requirements that have been in place and the jobs that are being created (about 3000 per month), we still have healthy fundamentals. There is no inventory either. Me personally, I am selling my house in a few months to redeploy the equity. 

@Mike Nuss concessions are back for sure especially in the core with class A product. Rents are lower than they were a year ago. Lots of new properties coming online will get sold this year. Lease ups are sloow.

@Jay Hinrichs it's only with new construction. So, anything that goes through to design review process now will have to follow the new inclusionary zoning changes. We're working with an owner who was able to get entitlements through through before the changes and is hoping to get grandfathered in. We're marketing his land in NW for multifamily redevelopment, but as you can imagine it's been a lot tougher to sell than say a year ago. Jeff at Cambridge is a good guy. sold him an apartment building earlier this last year. And yeah, there is definitely a lot of multifamily coming online on the close in east side. But there are still a few developers looking to buy land like that..

Like Adolfo said, it depends on your goals. Also, what is your level of expertise. Developing apartment buildings or condos requires some serious knowledge. In this market it is ultra competitive and also very expensive. We're seeing costs right around $200 a square foot including all costs. Obviously you have the land already, but I will tell you that Sandy is a highly coveted area. A lot of development is happening in that corridor and dirt for multifamily with ground floor retail is priced very high. 

Keep in mind there are several changes happening in Portland, however. The city just passed an inclusionary zoning change requiring all projects over 20 units to have 15-20% of the units be affordable housing units. This will affect the value and we've already seen that in a few deals we've been working on. 

No doubt, the highest and best use is likely to redevelop the land. Sandy is a heavily commercial street and it will continue to be redeveloped. But, I do love the classic homes as well. Unfortunately, when a city grows it has growing pains, in this case some very classic homes don't fit in the cities blue print. 

Feel free to reach out if you would like to discuss more. Hope that helps

@Account Closed

I listen to the podcast almost daily and can attest to the quality of the content. Charles and Kevin are studs. I'm following in your footsteps Charles!

@Gene Murashko is your question about whether you can have a two story duplex on the lot or whether you can reuse the utilities? If you haven't gone to portlandmaps yet, do that and you can find out whether the zoning allows for a duplex or possibly more. Regarding whether you can reuse the utilities, you should be able to I would think. 

Did you run a test ad in the paper to see what kind of demand there is for homes in the area? It is a great way to gauge how quickly you can fill the park. Obviously you want to get the livable homes rented out asap before you do anything. If you can't even fill those because of demand you will have a tough time with this park. This is probably the main thing I would be looking at in due diligence before I did anything with this park. Alabama has generally low lot rents as well. Dirt roads will make it tough to finance as an exit strategy.