Potential Real estate deal - comments appreciated

[spex x]

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the numbers look good on paper. But the management might be an issue. You have to remember the kind of clients your likely to be dealing with here.
how are the eviction laws where you live?

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I mostly work with these tenants already, so i'm pretty sure I know what to expect. The only thing with this property is the transience, which I dont' have at my other properties.

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How do they apply to "motel"/moble homes compared to standard apartment/house rentals?

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We're fortunate to have evictions laws and judges that tend to favor landlords. the eviction laws are the same for mobile homes as any other rental. the only problem is that evicted tenants tend to abandon the mobile home on your lot, so you've got to apply for a new title, etc. That takes about 3 months before you can haul the junker off and replace it. The mobile homes on this property are all park-owned and the seller has all the titles.

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What are the local laws on abandonment? this might be more of an issue with mobile homes as they can be considered personal property.

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30 days before I can declare it abandoned, 30 days advertising for anyone with equitable interest to claim it, 30 days to get a new title. All that before I can haul it off and trash it! Yikes.


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Looks like you have a good deal on your hands if you can get a reliable system for management. This could be one giant headache or a smooth + cash flow. Most likely somewhere inbetween.

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Yeah, I agree. I think that this property will take more management than most of my other properties. The key to this is finding a reliable person to manage the place for me. That is easier said than done, as you can imagine. But those people are out there.

[spex x]

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but have never even considered or been approached about investing in the mobile home investment arena.



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Stephen, I have a few mobile home parks. They are an investors dream. You're renting LAND. Nothing for tenants to steal or break. Storms can't damage it. Long-term tenancy with low turnover. Expenses are low (30-35% or so). The list goes on and on. They're great. So good that I'm trying to get rid of most of my other stuff and ONLY buy MHPs. Of course, I live in an area where there are lots of MHPs, but the ease of management lends itself to out of area investment very well.

[stephenNUTS]

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but have never even considered or been approached about investing in the mobile home investment arena.



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Stephen, I have a few mobile home parks. They are an investors dream. You're renting LAND. Nothing for tenants to steal or break. Storms can't damage it. Long-term tenancy with low turnover. Expenses are low (30-35% or so). The list goes on and on. They're great. So good that I'm trying to get rid of most of my other stuff and ONLY buy MHPs. Of course, I live in an area where there are lots of MHPs, but the ease of management lends itself to out of area investment very well.

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Thanks for replying spex!

My first question is going to be WHERE are most of your properties located in general?

With my primary portfolio in the NYC/Long Island area,I am not even aware of many around this neck of the woods?

Where is your primary local in finding thses opp's...or do you go out of the area where you reside,to locate around the country where a deal may arise as well?

Great Thread
and thanks again
`stephen feraca [img]/images/graemlins/cool.gif[/img]

[Groty]

I had no idea these properties could cash flow this well after one of the biggest real estate booms in history. This is going to be an interesting and educational thread to watch.

Thanks for responding and good luck with the venture.

[Life]

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Of course, I live in an area where there are lots of MHPs, but the ease of management lends itself to out of area investment very well.

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can you explain this a bit more? do you think its a good idea to invest in an MHP as an absentee landlord?

[spex x]

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but have never even considered or been approached about investing in the mobile home investment arena.



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Stephen, I have a few mobile home parks. They are an investors dream. You're renting LAND. Nothing for tenants to steal or break. Storms can't damage it. Long-term tenancy with low turnover. Expenses are low (30-35% or so). The list goes on and on. They're great. So good that I'm trying to get rid of most of my other stuff and ONLY buy MHPs. Of course, I live in an area where there are lots of MHPs, but the ease of management lends itself to out of area investment very well.

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Thanks for replying spex!

My first question is going to be WHERE are most of your properties located in general?

With my primary portfolio in the NYC/Long Island area,I am not even aware of many around this neck of the woods?

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I'm in the midwest, and I don't like to own any property that I can't drive to in a day. I'm not sure about MHPs in your area, but I know that there are tons further south on the east coast. There are lots of older MHPs tucked back in the woods that we never see. One thing that I learned really fast is that we tend to overlook MHPs until you get tuned into them. I bet you could find some.


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Where is your primary local in finding thses opp's...or do you go out of the area where you reside,to locate around the country where a deal may arise as well?

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No, like I said, I only invest locally. I've never owned an out of area property. MHPs can easily be managed from out of area though as long as you find a turn-key property. Obviously decent parks sell at lower cap rates, but you can still find good deals. There are a LOT of old, run down parks with old, smaller homes in them. Those are projects - stay away from them for out of area investment.

[spex x]

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I had no idea these properties could cash flow this well after one of the biggest real estate booms in history. This is going to be an interesting and educational thread to watch.

Thanks for responding and good luck with the venture.

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This is one of the reasons that I wanted to post here on this deal. I've seen lots of comments about how you shouldn't buy RE right now. I always disagree, pointing out that there are still great deals to be had. Hopefully this thread can further educate some of the others here interested in RE in how to find and structure deals for maximum profit - even in today's down market.

[spex x]

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Of course, I live in an area where there are lots of MHPs, but the ease of management lends itself to out of area investment very well.

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can you explain this a bit more? do you think its a good idea to invest in an MHP as an absentee landlord?

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Yes, its fine to invest in MHP as an absentee landlord. Personally, I don't do it. But I know of others that do, and its working fine for them. If you want to invest absentee, you really need to watch out for turnaround projects. IMO, you can't turn around a MHP from a distance - you gotta be there working the project yourself. MHP turnarounds offer stellar returns though.

If you find yourself a nice turn-key park that can support a full time manager (i.e., 100+ spaces), and in good condition with wide street and newer homes, then you can easily be an absentee owner.

[spex x]

UPDATE: The biggest problem with this deal is that I can't see a decent exit to get my cash back out of the property. Any future sale will have to be heavily owner financed, and the future buyer will very likely be someone starting out in RE. There is no good exit that I can think of. The problem underlines the importance of creativity when it comes to RE investing. I'm apparently not creative enough to figure out a way to exit this investment.

In sum: The property shows excellent cash flow, I anticipate having a problem selling the place in the future should the need arise. So I've decided to passs.

Alas, I'm on to the next deal. I've got a line on an 8 plex that is owned by a couple in their seventies. The husband has alzheimer's and they need to get rid of the thing. Their asking price is about 5 times the NET operating income. No kidding. I'm supposed to be selling off my properties like this, but this is so cheap that I don't think I can afford not to check it out. I'm going to check it out this weekend and I'll try to remember to post about it soon.