My Experiences with Small parks (VERY LONG) - Posted by Ryan (NC)

Posted by Ryan (NC) on March 13, 2008 at 18:00:24:

I hate this answer but I’m going to give it anyway’s, You need to read Scott and Tony’s book… I can’t do justice to this in a single post that the book covesr in best guess about 250+ 8.5x11 printed pages.

Over all I’m not real impressed with the numbers myself but there is a lot of details not present and what constitutes a deal varies from person to person and area to area… Based on what info is here, my opinion is, If you can negotiate a better purchase price or the units are way under market rent there may be a deal. My biggest concern right off is that the water bill seems very high compared to here which likely indicates much higher than estimated expenses or a water leak / infrastructure problem which might or might not be a deal breaker… Read the book, use their step-by-step, put a contract and get help on the DD if it makes sense.

Best wishes,
Ryan Needler

My Experiences with Small parks (VERY LONG) - Posted by Ryan (NC)

Posted by Ryan (NC) on March 11, 2008 at 21:06:25:

After reading today’s post I wanted to share my experiences without getting in the mix of two similar post…

I’ve found that most of the small parks I’ve bought have been purchased from burned out landlords and are suffering from deferred maintenance.

The parks are mostly park owned with a couple lot rent only tossed in. (this will become important later)

All of the parks need a dose of cash tossed in to the park owned homes to bring them to acceptable standards. Which I do by getting the property cash flowing and then using the excess cashflow to finish the property thus limiting my expenses on the front end.

I’m go in expecting to be evicting 25% of the tenants with in the first 90 days of my ownership. If you budget for it, it don’t hurt to awful bad, expect everything to go perfectly and it’ll kick ya in the gut!

These are the common items that have been present in every park I’ve done to date, they aren’t pretty 5 star parks… They are working class communities that are in decent areas or areas that have potential upside (speculation) for commercial use somewhere down the road.

The most common deferred items I see are deferred maintenance of safety issues and general upkeep which the landlord does not desire to fix. To counter act this the landlord reduces the rent and the quality of the tenant in order to keep the unit full. (more often than not it’s with a non-paying tenant)

Before anything else I come in and fix any major safety issues, install smoke detectors, and begin evicting the worst of the worst from the get go. I make a big impression by doing this and prove that I really do mean business and am serious about what I’m saying. I then focus on fixing the units that I forcibly made empty, one at a time I repair and refill the empty units bringing up the quality of the tenants in the property.

It takes me on average 6-12 months to “turn around” a small property like this. In the end I’m left with a small property that cashflow’s nicely and that I’m not scared to take my friends in…

On to how I’ve been able to buy these little parks…
First I’m looking for a piece of dirt that I’d like to own! The mobiles are simply a way for me to pay for that piece of dirt, I can speculate to an extent this way because the property cashflow’s as long as it is properly managed. Worse case is that none of our properties ever become worth anything and I can only collect the cashflow until the properties are paid for and then get a pay raise for as long as I care to run them.

I’ve found a weird trend in our properties that seems to work very well for me. We have a hand full of lot rent only units in each park, these units pay about half the mortgage consistently month after month and make it so that I only have to keep one or two units rented to pay all the bills. At over a 50% vacancy I can still pay for the properties and insure my retirement in the process.

Small LOCAL parks aren’t big enough to draw non-local investors which limits the selling pool for mom n’ pop operators that only have one or two properties which from my experience is very common. This allows me to be in a position of power as I’m one of the few people that can/will tackle the property. in a nut shell I’m building a portfolio of these small parks which when combined equal a “big” park.

Here are the current numbers…

Park #1 - 5 MH’s, 1 SFH, Basement Apartment, retail store
Don’t remember all of the purchase details on this one but we put $2500 down and made payments to the owner for about a year and a half while we fixed the property. Refinanced and pulled about 10k in cash.
MH3-rehabbing now
SFH-$500/month (long term tenant)
Retail Store-vacant

This property is high on vacancy right now but the gross rents are $1725 I spend about $100/month on repairs, mortgage is $1003 (12 yr amort) taxes run $75/month, water bill is roughly $80/month. Net at 42% vacancy is just shy of $500 month. We average about $1250/month net on this property.

Park #2- 2 lot rent only, 3 park owned
Purchase $52,500, owner financed $2500 down and 467/month, negotiated a reduced purchase price and refied a couple months ago and pulled 16k outa the property.
Lot3- un-useable vacant lot

Current rent roll is $1275, $505 month is from long term great tenants. Mortgage is $500, Water bill runs $75ish, taxes $50, we have low repairs right now due to recent rehab of property average is about $50/month. So we net about $600 and tend to see about 2 months a year with a vacancy, the big deal on this property is that the lot rent tenants and a very solid SSI tenant pay the mortgage for me.

Park#3 8 lots, 5 park owned, 2 lot rent only.
Paid $56,500, assumed the sellers mortgage sort term giving them $2500 for the purchase option and refinanced about 4 months later with the same bank putting 20% down (11k). The sellers had paid 62k for this property less than a year before we bought it from them and the sellers wife gave me a hug and thanked me for “taking the property” at the closing table…

MH3-Needs repair/replaced
Lot4-vacant lot
MH7-Vacant as of today (rents $350)

Gross $1285, mortgage is $462, water runs $90/month, taxes $75/month, repairs run about $100/month. Current net is $558 with 37.5% vacancy, one is an easy fill and the other 2 we’ll likely replace the units sometime down the road. The mortgage on this property is also set up so that a steady SSI tenant and the lot rents consistently pay the mortgage every month without fail.

Park4 - 12 spaces, 9 park owned, 3 lot rent
Park5 - 3 MH’s, Duplex, SFH

These parks we’re bought as a package and on seller terms, we paid $290k for both, 15k down and $2300 month for 240 months at 8% with no calls and some neat things in the note.

Rent roll:
MH3-finishing this week, will be $425/month
MH4-replacing after finishing MH3
MH5-$350/month (tenant is 27year tenant upgrade from MH4-10x40)
MH7-(finishing setup now, will bring in $455)

SFH $425
Apt1 $360
Apt2 $400
MH1 $385
MH2 $375
MH3 $400

Total Gross is $4995/month with several units to boost income even more, mortgage is $2300/month, utilities are $1200(slowly getting rid of these, down from about 2.5k), have yet to determine average repairs cost as all cashflow is currently going into repairs until finished, water bills are running $175ish, taxes will be around $100-200/month. Our current net is about 1120 with about 3k in future potential cashflow.

THE END RESULT is that we have a current net income on these properties of about $2750/month, and this is after a REALLY bad round with evictions and a slow market that I quit working on units for a while. By summer this number should be back up around $5000/month net give or take a little for vacancy.

Best of all, we have about 10 years before the first 3 parks are paid for, once this happens our net profit will jump by about 2k a month even if we were never to raise rents. The last 2 parks we have a partner who put up the cash, covers overages, and splits the end profit, God willing he’ll never have to put another penny in to the properties and will get about 2k/month on 15k plus about 100-150k in equity.

I have been very “hands on” and taken the blue collar approach as Tony calls it but the end result is my retirement is pretty secure and I believe that 7k/month just from these parks will take care of my family through the years even if all of our other investment were to go kaput. To each their own, I like my “little parks”!

Best wishes,
Ryan Needler

Re: My Experiences with Small parks (VERY LONG) - Posted by sandifl

Posted by sandifl on March 14, 2008 at 20:28:45:


Thanks for answering a number of my questions!

You make it look so easy. I hope someday to be able to say I got one, just like Ryan’s.

Sandi Shear
Now in NC

Ryan, Thanks for Sharing - Posted by Don-NY

Posted by Don-NY on March 14, 2008 at 18:25:49:

I often suffer from analysis paralysis. It is so great to see some real numbers from real deals. People can see that you can indeed make a living from a modest number of homes/lots. If you buy the right property at the right price with the right terms.

Now for our first and only park deal (so far)
size .6 ac
4 spaces
Bought at a tax foreclosure auction for $2750 including 10% buyers premium in May 07
Pulled all 4 homes off and scrapped them.
Installed new water lines and new sewer lines
Bought 4 mid 90’s 3 br homes for 10,000-12,000 total cost each including fixup and moving/setup costs.
Last home is set and We will have it rent ready by end of month.
So for a total of under $70,000 and a TON of work on our part it will gross $2000 a month.
I wanted to let folks know there is no right way or wrong way to park ownership as long as it’s profitable.

Great Job ryan - Posted by liz

Posted by liz on March 12, 2008 at 21:07:03:

hi, ryan,

That is my goal for my retirement.

I am starting looking for small mobile home park

Re: My Experiences with Small parks (VERY LONG) - Posted by Mike

Posted by Mike on March 12, 2008 at 11:35:34:

Ryan how far do you live from your parks? Are these parks on city services? What are a some requirements you have for a small park before you evaluate it? Thanks

Thanks Ryan… - Posted by Greg Meade

Posted by Greg Meade on March 12, 2008 at 08:26:43:

I like this business model…a lot. I saw this same dynamic in Both Tony and Scott’s parks in NC lasr summer. These are healthy returns and you and your family will be financially secure for life with this model.

I have gone to lots of bootcamps and seminars (as have you)and I might take some small idea or action from each and tweak it to make it work in my market.

Som ething i really like is the diversity of your portfolio. My fear is to go for broke and buy a huge Park and have something out of my control devalue the park. Base closing, mill closures, environmental issues. With these smaller parks, all of our eggs are not in one basket. Harder to manage? Probably…but oto me a safer investment maybe.

Great post Ryan,


Re: My Experiences with Small parks (VERY LONG) - Posted by Todd(AZ)

Posted by Todd(AZ) on March 12, 2008 at 07:00:28:

Good stuff Ryan. Thanks. Todd(AZ)

Re: My Experiences with Small parks (VERY LONG) - Posted by Ryan (NC)

Posted by Ryan (NC) on March 12, 2008 at 18:05:39:

All of these parks are with in 20 minutes of my house, little parks like this do require more of a hands on approach as Scott and Tony teach. I learned on LD’s that I don’t like longer distance on small properties, in a nut shell this business has started to turn me lazy to an extent, the closer the better IMHO.

I do have (and much prefer) city water on all of the properties, half are on city sewer the rest are on septic. We do have a few units still on 60amp service and 2 units to a septic tank which I wouldn’t consider on a larger property.

I’ve pretty much used Scott and Tony’s information to the T crossed with a tad of Earnest Tew’s and Ray Alcorn’s material to base my purchases… In the end I’ve found that most of my deals from LD’s on up all fall in the same group of numbers. A loose application of 60/30 will get you targeted in on wether a property is worth looking at followed by Scott and Tony’s checkbook analyst gives pretty good chances of success.

Best wishes,
Ryan Needler

Re: My Experiences with Small parks (VERY LONG) - Posted by Mike

Posted by Mike on March 13, 2008 at 09:48:11:

Thank you for taking the time to reply. I appreciate your help. I’ve found a small park it is located on 3 acres with an additional 4 acres for expansion. There are 9 mobiles and 1 SFR for a total of 10 rentals. Of the 10, 8 are rented for a gross income of $3075 per month. After replacing the 2 empty homes and a small rental increase the gross income is $4175 per month. The expenses are approx.$600 per month (including insurance and property taxes). After submetering the water the expenses drop to $350 per month. Of course nothing is verified at this point which would be a part of the DD. The asking price is $145000. It is located in a growing area. Can you tell me if i’m missing anything or is the something else I need to evaluate in my prelim. Thanks for any help.