Is this doable? - Posted by BOB(LA)

Posted by mike barlow on April 26, 2007 at 20:59:10:

some owners in totally depressed area buy rentals to SURVIVE and may
not thinking at all about raising the value of the park.

Is this doable? - Posted by BOB(LA)

Posted by BOB(LA) on April 26, 2007 at 24:17:48:

26 lot park 6 years old. 12 spaces rented at below average fee since hurricane Kat. Loan with 10% down would just get debt service on loan paid by income. Here’s the question. Could you do Lonnie deals on other 13 spaces and raise fees to run out other tennents, while creating more spaces for Deals while increasing profit. Park is ony 6 years old and there is a moratorium on new parks in parish since Katrina to keep trash from N.O. out. No landscaping, advertsing, Etc. Owners mother lives in park.

Re: Is this doable? YES - Posted by mike barlow

Posted by mike barlow on April 26, 2007 at 14:44:28:

but do you want to do it? I’ve had a park for a long time but I haven’t
bought one lately so here goes.

We did not get much info but if it breaks even on 50% vacancy with
10% down and with the potential to increase the cash flow from the
vacant spaces on a newer park it seems doable. Check to find out what
other parks are selling for in the area. Do you have the cash to buy the
homes to move in including moving costs? Figure out how much you
would have to spend to buy and bring the other homes in then figure
out what income those 12 homes would bring in to get your return on
investment.

Re: Is this doable? - Posted by Tony Colella

Posted by Tony Colella on April 26, 2007 at 09:22:00:

Your question sounds to me like it can and should only be addressed to the local governing agencies. Only they can tell you if there is any restrictions for certan however I do not see why there would be.

If I understand your question, you want to move homes in and sell with owner financing. I don’t see why not but check with local departments to be sure that nothing since Katrina has changed that makes move and set ups more expensive.

As for running people out. Good tenants are the basis by which we build other good tenants. Running good tenants out is like telling your best client to pack sand. In light of the terrible storm damage it might be best to keep those lots cheap and slowly raise them over time as both demand and budget allow.

If you are saying that these new restrictions don’t allow for advertising or landscaping you may want to reconsider this deal entirely. Hopefully I misread that part.

Tony

Re: Is this doable? YES - Posted by BOB(LA)

Posted by BOB(LA) on April 27, 2007 at 24:19:47:

Have the money to bring in 2 or 3 Lonnie deals right away. Of course you are right about keeping good tennents, but need to go up at least $50 from $105 a month in 2 6 month increases to bring rates in line with area. Very clean now but again no landscaping, etc. As they see the improvements and see that fee on Deals I think they will be happy. PS all MH very nice but 2 have blueroofs still (blue platic FEMA tarps. I would give them 2 months to make repairs or move or sell, hopefully to me. Before I make offer am getting financing together at bank (should be tomorrow) using
cd loans for about 40% . Also must start new corp. and do DD and let my accountant check books. Thanks for all the help. Bob

Re: Is this doable? - Posted by BOB(LA)

Posted by BOB(LA) on April 26, 2007 at 12:40:49:

Thanks for the answer. The moratorium dosen’t effect existing parks. No restrictions on advertising or landscaping, owner just hasn’t done any.

Re: Is this doable? - Posted by Gary

Posted by Gary on April 26, 2007 at 20:49:45:

If you have good tenants at present,treat them fairly as you really don’t want to be pumping any more cash than you have to into any property. Remember until all those Lonnie deals reach maturity,all you really have is a bunch of rental homes. In my experience the fewer homes I have title to the better,and when I finally get them cashed out I can move on to a new headache,a park with a bunch of park owned rentals the previous owner has collected thinking he is increasing the value of the park. Too bad most the good long term tenants move out because they want to live in a owner occupied community,even a low grade park,and not a rental home park. The only ones that stay are the tenants that can’t afford to move,and you may find they were the least desirable of your existing roster. Sounds like this one is worth the due diligence effort. Gary