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Where are all the Mobile Home Park Investors?

Discussion in 'Real Estate Investing' started by Major, Jun 20, 2017.

  1. BRichard
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    BRichard Contributor Read Millionaire Fastlane I've Read UNSCRIPTED

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    @EAChi I am also looking for similar info, I have multiple parks under ownership and am constantly exposed to opportunities to re-sell homes and the majority of buyers in my area are asking for a rent-to-own option, as they don't have cash to purchase a MH outright.

    @Major Is that the de minimus provision? Where basically you operate under a meaningful threshold such that you wouldn't be prosecuted? i.e. Selling 1 home per year on payments vs. 1,000 per year?
    I am closing on a park this month which will come with 10 homes + titles and I will be looking to sell them all, so as to be a 100% lot-rental-only community after that point, massively increasing the passivity grade of the property. Did you have your attorney draft your agreement for you? I've heard rumours of judges in my State rejecting rent credit program as a disguised mortgage....
     
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  2. Major
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    Major Luck is Man-Made Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER

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    First of all, congrats on your next addition! Glad to hear you are doing well in this field.

    @BRichard. Each state, city/county, and judge's for that city/county is different and will have different opinions. I always advise to speak with an attorney if you have a legal question, as I am not an attorney and suggestions, just like stated in TMF and Scripted, are not legal advisers or qualified to give absolute legal advice.

    If you are still persistent and not sure after reading the rest of this post. Save yourself a lot of time, money, and frustration, find a local property manager from a management firm who works for a mobile home park or has experience. They cant tell you first hand how each judge for that county will react and plan accordingly.

    You are correct on the provision and are allowed up to 10 transactions per year. It has been my experience in hundreds of hours in court rooms in numerous counties and states, that the biggest issue that is ever presented in any case is that the judge does not know how a mobile home park works. Majority of the time a tenant will not show. No questions judgement and immediate possession (based on state) is granted. A a tenant will show every now and then. I can count on my two hands on the amount of cases where the dead beat tenant will get a FREE attorney, some paralegal from some local firm, to represent them (Thanks tax dollars!). The attorney will look at the case for a few minutes prior to the hearing as they have other cases that actually pay a commission. In this case the attorney will only push for a date of trial and a bill of particulars to try to trip up the plaintiff, YOU, and dismiss the case or worse seek counsel yourself and lose more money while you try to explain to your over priced attorney how mobile home parks work.

    The biggest issue no matter if they own the mobile home, rent the home, or have an installment sale on he home, is the judge will not know how the how a mobile home park is managed/operated. That is why in the previous post I put in the language in my lot lease, rent agreement, promissory note, and rules and regulations about default and acknowledgement from tenant for willing giving possession. Then have them sign next to the statement in bold. Any judge no matter their experience can clearly see the statement signed by the tenant and 99.99% of the time rule in your favor without having to go to a trial.

    Finally, to better safe guard yourself, set the homes up in a separate entity from the entity that is deed holder to the actual park. You can go a step further, like myself, and setup a management company entity and contract to yourself. Both giving you yet another barrier of protection.
     
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  3. BRichard
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    BRichard Contributor Read Millionaire Fastlane I've Read UNSCRIPTED

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    @Major Thanks! Closed on 3rd park this year, looking to acquire 2 more medium-sized parks in 2019 and complete some cash-out refi's next year for some wealth events :cool::cool:

    I'm really interested in the concept of an entity for owning the park (real property/parcel), then a separate entity owning any rentals/flips/sales of the individual MH's, and then once we scale up, another entity for the Park Management operations. Do you have any recommended reading sources for entity creation, structuring, etc?
    I am also looking at rolling up some repairs and general contracting into one of the entities, as I am finding that there are VERY few MH renovation or remodel companies that are timely or interested in actually working haha.

    Thanks for all the insights so far! You going to MHU Boot Camp in January? (Orlando)
     
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  4. Action Mike
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    Action Mike Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    @Major Lot of great info in the thread. Thanks for taking the time to keep us updated. I spent some time looking into buying MHPs a few years ago and got cold feet, wish I would have moved forward with it instead of what I was doing at the time.

    When you buy MHP out of town or state and they are not large enough to have onsite management, I believe you said you manage them remotely and with a few contacts in the park to keep an eye on things. Does that mean you only rent pads in those locations or do you still sell MH's? It seems like it would be much more complicated doing repairs and evictions on MH remotely like that without a onsite manager.

    How much time do you spend boots on the ground for a smaller remote park? Would you do as much due diligence before hand as you can and then visit the site right before making a final offer or do you trust remote methods like pictures and face time to get a feeling for the park? How do you handle evictions remotely?

    How do you feel the market is going now for people looking to buy MHP's? My area seems like they run about $20k to $25K per pad on city utilities in developed areas. What do you consider a good price per pad and lot rent?
     
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  5. WJK
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    WJK Gold Contributor Speedway Pass

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    I lost a lot of money when I didn't live in the area. I came back and forth a lot, but that was ineffective. I knew my managers were stealing from me -- I just didn't know how much until I moved to the contiguous property and started managing the park myself. My income doubled within about 18 months when I took over the management.

    When I got here, my managers told my tenants to ignore me. They said I wouldn't make here for more than 2 weeks. That was many years ago. They moved away after I fired them, and I'm still here. Since I came into ownership about 20 years ago (March 1, 1999), my gross income has increased to 6 times the level where I started. I have built a cash cow.
     
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  6. BRichard
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    BRichard Contributor Read Millionaire Fastlane I've Read UNSCRIPTED

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    Good work @WJK
    What regions of the US are you invested in?
     
  7. WJK
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    WJK Gold Contributor Speedway Pass

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    I'm in Alaska. When I was practicing my career, I was in Los Angeles for about 30 years. I've been the real estate business in one form or another for 43 years. Therefore, I have invested in several markets. This is my fifth business cycle since I became an adult.

    No, I didn't choose Alaska. It's where my parent worked and retired here when they were still alive. But, things have worked out well for me here.

    A lot of my success I chalk up to years and years of experience. It's a lot of doing the little things right, time after time. It's getting up day after day and putting in the consistent hard work. It's building up and following good work habits and procedures. I don't know how to do any other way. I have watched people try to take shortcuts and/or suck out all the money for silly follies. I've watched them quickly go down in flames. My life is all about "TCB, Baby!" (take care of business)

    I'm probably telling you more than you wanna know...
     
  8. HL805
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    HL805 New Contributor Read Millionaire Fastlane I've Read UNSCRIPTED

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    @Major Great thread!
    any updates on your journey?
    you mentioned you bought a camera and may start taking pictures/ videos, did you ever get around to doing that?
     

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