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Mobile Home Park Details

Purchase Method: Assumable Loan
Listing ID: 537262
Posted On: May 26, 2015
Updated On: Oct 12, 2015

Description

The ARA Manufactured Housing Group is pleased to present the opportunity to purchase a four-property MHC portfolio in Michigan. The package includes four Class A, age-restricted communities, three located north of Detroit and one north of Kalamazoo. The communities are cross collateralized with approximately $40.3 mil in total assumable debt. The Seller is offering to supplement cash flow to generate the buyer an 8% cash return until the loans mature in June 2018.

The total portfolio consists of 1,328 sites with a physical occupancy of 77% and an economic occupancy of 76%. Of the revenue producing sites, 88% are tenant-owned homes paying the community lot rent only. In addition, there are 16 vacant homes. The Seller has restructured approximately 70% of the staffing over the last two years to perfectly position the properties to capture occupancy upside by adding additional home inventory.

Location

- Debt is cost prohibitive to extinguish and as a result, it must be assumed. The seller is offering to boost cash returns to almost 8% based off of proforma on the list price with monthly escrow payments until the debt is prepayable in June 2018.

- At 77% physical occupancy and with improved staffing, the portfolio is primed to start adding homes to increase performance and profits.

- Assumable debt is prepayable in June 2018, when a buyer may be able to refinance and increase leverage, making returns less sensitive to interest rate increases.

- Last rent increase was in 2013.

- According to an HSBC study, 70% of retirees experience a drop in income after retiring, making affordable, manufactured housing an attractive alternative to expensive traditional housing for the estimated 10,000 baby boomers retiring every day.

- A popular tourist destination, Michigan brings in billions of dollars in tourism every year. In 2013, travel spending increased by 4.1% and Pure Michigan was the most visited state tourism website with over eight million visitors in 2011.

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