This issue of the MobileHomeParkStore.com and MHBay.com
Newsletter includes:
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Important updates, news, and new features
of MobileHomeParkStore.com and MHBay.com
-
New E-book: The in's and out's of
over 70 mobile home park deals that Frank Rolfe and Dave Reynolds have done
in the last 10 years.
-
Mobile Home Park College - The learning
experience continues!
-
Questions and Answers with Dave
-
A Great Sign for your Mobile Home Park is
an Investment and Not a Cost
-
What do you do when your Mobile Home Park
has less Skirting than a Men's Store?
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Tell us what you think and send us your
articles!
Visit us at
www.mhps.com or
www.mhbay.com
In the past 30 days, there
have been over:
83 new mobile home parks listed for sale
on MobileHomeParkStore.com and at least 17 confirmed sales.
We have updated our
Affiliate Program with new banners and products. It is FREE to
join and make money when you refer people to
MobileHomeParkStore.com. It only takes a few minutes to sign
up.
Find out more at our
Mobile Home Park
Affiliate Program
Introducing our all new Q&A session
every Wednesday at 5:00 Pacific, 6:00 Mtn, 7:00 Central, and 8:00 Eastern.
Do you have any mobile home park related questions? If so, join us every
Wednesday evening.
Find out
more
Here is what Carl
had to say!
Dave and Terri,
I have been a mobile home
park broker for over 30 years and used to get all my buyers from newspaper ads
that were quite expensive. In the last couple of years you have helped me
sell several parks and my advertising cost is now 90% less and I attract more
calls from listing on your site than I ever thought was possible in my 30 years
in the business. Keep up the great work!
MHPCollege.com
The first and second sessions
on Buying a Mobile Home Park and Selling a Mobile Home Park have been completed.
All sessions have been recorded and you can listen to them over and over.
Dave - I have read through the
materials and listened to the recorded sessions. The information
that you and Frank have provided is so complete and helpful. I am
sure it will prove to be invaluable as I embark on investing in a mobile
home park. Thanks again for sharing your experiences.
Regards,
Beth
Are you looking to Buy a Mobile
Home Park?
Are you looking to
Sell a Mobile Home Park?
Are you needing
help to Turnaround your existing Park?
If the answer to any of
these questions is "YES" or "Maybe" then we are here to help!
Find out more
about our new Mobile Home Park College
Selling your Mobile Home Park:
We are still offering the 15 day trial run to
SELL your Mobile Home park. No further obligation or strings attached!
Find out more here about this special offer!
Are you a manufactured home owner or community owner with homes or
lots for sale or rent?
If so, then you can list your new and
used mobile homes for sale or rent and lots for sale or rent for
FREE at
MHBay.com
Our traffic continues to increase so if you are looking to connect
to potential residents and sell or rent more homes, then place your FREE
listings on
MHBay.com.
Q&A with Dave
Questions:
Dave,
When buying
a park with park owned homes, how do you
value the park owned homes?
Richard
Answers:
Richard,
Thanks for the great question. I have been asked
this many times over the years.
First of all, if you value the home based on a cap rate
as you would for the lots, then you will be overpaying for the home. For
example, if you have a home that is renting for $500.00 per month and the lot
rent is $200.00 per month. You are really only renting the home for
$300.00 per month.
To keep the example simple, suppose that you have
expenses of $100.00 per month to keep that home rented, repaired, insurance,
taxes, etc. You would be netting $200.00 per month on the home and $2,400
per year.
If you were valuing the home based on the cap rate
approach and were using a cap rate of 10 percent, then you would place a value
of $24,000 on the home. If this is a newer doublewide, it may be worth
that amount. However, in most cases, the home is worth much less than
$24,000.
I have two different ways to value the home:
1. I look at that market and see what comparable
homes are selling for. I may consult the NADA retail and wholesale guide
as well. The key is to find out how much you can sell the home for for
cash or on terms. If you can only sell it for $10,000 on terms, then you
don't want to pay $24,000 for it.
2. Another way to figure out what the home is
worth is to find out how much it would cost to buy a comparable home and have it
moved and setup in the community. Being that the home is already in the
park does add value to it. Suppose a similar home would cost $10,000 at
the park down the road and to have it torn down, moved, and setup in your park
it will cost another $3,000. This would be a total of $13,000. So,
in this case you would not pay more than $13,000 for the home when you buy the
park.
The real key is don't just cap the income on the home
as you would for the lot rent only portion.
Dave
Question:
Hello Dave,
We bought your book on MHPs and are
looking at a park now. Wanted to
get your opinion if you have time.
We found a park. It has 7 unrented MH spaces, each
individually metered for all utilities.
Apparently, the current owner bid on it in an
auction and didn't expect to win. He lives too far
away and wants to get rid of it. He only wants
35K, with 5K down and he'll finance. We wanted to
buy it, and then turn around and sell each lot/space for
10K, but we called the city zoning and were told that it
could not be subdivided any further. Do we have
any other options that would be worth it? The price is
right for us as beginners in this type of investing.
Space rental only go for $100 to $150 in that area.
Would appreciate any comment you may have.
Thanks,
Natalie O
ps We're really finding you
book helpful.
Answer:
Natalie,
The park could be an ok deal if you can buy it at the price he is asking and
you are able to fill it up with homes that you bring in and sell or that
others bring in.
However, if you are going to bring in homes it is unlikely that you can do
so for under $10k each after setup and ready to sell. More likely it
will
be $15k. Then you have $15k to $20k per lot/home.
In order for this to work, I think the minimum lot rent you could charge
would be $140-$150 per month. At $150 per month the park would
potentially bring $12,000 per space if the expenses are mostly
passed through to the tenants. On top of this you could add somewhere
in the 75% of the value of the mobile homes or notes.
I would make sure that the utilities in the park are all in working order
as this could be an unexpected cost. In addition, the size of the lots
would be important so as to fit good sized homes.
I hope this helps. There may be a deal there but you really have to
pencil it out to make sure it is worth the effort.
I hope this helps.
Dave
A GREAT SIGN
FOR YOUR MOBILE HOME PARK IS AN INVESTMENT, NOT A COST
Most mobile home parks I have bought
come with a standard sign design – a 4’ x8’ sheet of plywood with a faded
poorly written name on it and no phone number. This must be a popular
design because I see it everywhere. There is also the design of metal
or wood letters on a brick or masonry wall with some of the letters missing.
My favorite was on where some kid had yanked off the letters and then spray
painted some replacements so that the sign said proudly “F___ Y__ Estates”.
What was equally funny what that the owner cared so little about the sign
that he did nothing about it -- I drove by several years later it was still
that way.
You need to understand that your
park sign is extremely important to making money. Your sign is a
pretty busy employee:
- It offers a tenant and a
prospective tenant the initial positive impression of you property.
- It gives the phone number of
the park to anyone interested in renting a lot.
- It impresses city inspectors
and officials
- It impresses bankers and
appraisers
- It works for you 24/7, takes no
vacation, and lives on nothing but sunshine.
I would propose that one of your
substantial investments in fixing up your mobile home park be to buying and
installing a professional quality sign.
I would empathetically recommend
against signs of wooden construction. Exposed to outdoor conditions,
wood just doesn’t work well. It fades cracks and eventually rots.
Even sandblasted signs don’t seem to be built for longevity.
I prefer signs of metal or plastic
construction with vinyl or molded letters – nothing painted. Paint
fades and flakes off over time.
I always put the name of the park
and the address on the sign, and then attach the phone number with two hooks
to hang under the sign. I do this so that if you change the phone
number you can just change out this panel and not the entire sign.
Also, when you sell a park, if needed, you can just detach the phone number
and the new owner can attaché his phone number.
I recommend that you pick a standard
design that you can use at all you mobile home parks. It will really
impress you banker, and you only have to come up with your dream design one
time and then use it over and over again.
I choose a sign design that works
well with white vinyl fencing, which I also always use at the entrance.
It would be a great touch if you came up with a standard entry design that
helped accentuate you attractive sign.
Sure, a professional quality sign is
expensive – but look at all the benefits. When you go to sell the
park, that nice sign and the great first impression it gives the buyer, may
make you 100 times what the sign cost. And that doesn’t count all the
income that the park derived from impressed drive-thru tenants.
Remember, a sign is not a cost –
it’s an investment!
Frank Rolfe, MHPCollege.com
WHAT DO
YOU DO WHEN YOUR PARK HAS LESS SKIRTING THAN A MEN’S STORE
Nothing is uglier than a
mobile home without skirting. Even a brand new, top-of-the-line mobile
home with a shingles roof and vinyl siding looks like junk in the absence of
nice vinyl skirting to hide all the tie-downs and concrete blocks and pipes.
So what do you do when the
mobile home park you’ve bought has virtually no skirting on the homes? The
first question to ask is what kind of finances do your tenants have? If
you are like me, they live pretty much hand to mouth. So what do you do?
You don’t have a lot of
choices. You can’t afford to kick all of your tenants out, and so
threatening to kick them out if they don’t skirt their house is a bad bluff.
You also can’t leave the skirts off since it will scare aware new residents and
will keep you from getting a good loan or making a good sale down the road.
Here’s the solution, send a
letter stating that effective immediately every home must have a skirt, but that
you will organize to have all of the work done and then bill it to the tenant,
broken down into six installments of $________ per month. Then, bid the
project against several different contractors and then start the project.
But what if you don’t have
the capital to install skirting for every home? Forty homes at $1,000 each
require $40,000 capital. If you budget is more modest, you will need for
the tenant to put in at least the required labor to install the skirts, and then
you will need to think creatively. I would be more flexible than to demand
only new, vinyl skirting. I have seen great skirting jobs done with metal
or fiberglass (see through roof panels for sheds) or even plywood – the
important thing is that they paint it to match the house. Offer to donate
the materials if they will install and paint it. Even if they are lousy
carpenters, anything looks better than no skirting. And what if you have
only a little money? Then start out with the most visible houses first or
you can just do the skirting on the two sides of the home that are seen when
driving though and pass on the rest for now. Those two sides are the front
nearest the street (about 14’ to 16’) and the side seen most frequently from the
street based on normal traffic flow. Or you can do just the front half of
either or both sides. The point is to hide the ugly part of the home from
the street, so that it does not turn off prospective tenants, banks or anyone
else, while buying you time to complete the project.
One important point I can’t
emphasize enough is the enormous impact of paint. Even the ugliest
skirting in the world, like a hybrid of old pieces of plywood, looks acceptable
if it is painted to match the color of the trailer. Sure, new vinyl is
your best option. But is it worth the extra cost? In many parks that
have high density, you can’t even see 75% of the skirting anyway.
The important thing is to
get something up fast to block the ugly underside of the mobile home. This
one action will make you thousands in immediate re-sale value and new move-ins.
Frank
Rolfe, MHPCollege.com
Tell us what you think!
We'd love to hear what you think of this issue!
We need your articles and press releases - send
your articles to
dave@mhps.com to be included in
upcoming newsletters.
Please send your comments, questions, articles, and
ideas for upcoming issues to us at:
dave@mhps.com
Your feedback matters to us!
Visit us at
www.mhps.com or
www.mhbay.com
Until Next Time!
Dave Reynolds
MobileHomeParkStore.com
18923 Highway 65
Cedaredge, CO 81413
PH: 800-950-1364
FX: 970-856-4883
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