Posted by Mr. C on July 20, 2003 at 21:51:27:
Yea, we know… this is a new thread.
Posted by Mr. C on July 20, 2003 at 21:51:27:
Yea, we know… this is a new thread.
Success or wishful thinking - Posted by Greg
Posted by Greg on July 20, 2003 at 10:39:55:
Hello everyone, I often read the post here but have never posted myself. I live in the midwest and have been involved in the family owned mobile home park business for over 15 years. We own 3 parks. The sizes are 150 sites, 95 sites and 210 sites. All have city water, sewer, off street parking, paved roads. The are nice parks. We also had a 29 site park that had no city utilities and had well water, gravel roads. We sold this park 2 years ago.
The reason I go into detail is because I know what im talking about when it comes to mobile home communities.
The latest success story is quit a doosey. How can a park with 7 sites be worth $240,000. Quite simple, IT CANT. I dont care if it is full of section 8 or not. Then He says he purchased a park of 10 sites and can expand to 14 and this park, once the new lots are in is worth a whopping $1,000,000. Now that is over $74,000/ site. I can say that this is impossible. NO investor in this business would pay that kind of money for a mobile home site. I dont care if the park is a A+++++ condition.
First of all invetors (real investors who own multiple communities) will not touch a section 8 park. Second, there is not a bank I know of that would loan money on a park that is section 8 if the asking price is $74000/site.
They would laugh you out of the bank. Third Im disapointed in creonline for running such a far fetched srory, knowing it cant be true.
Have a nice day everyone. If I made some of you made thinking this guys story is possible im sorry. I live in reality and know the business and this guy is DREAMING.
Anyway, just my 2 cents worth.
SUCCESS WHERE IT MATTERS! - Posted by ScottS(NC)
Posted by ScottS(NC) on July 21, 2003 at 09:48:33:
I beg to differ, I have a six unit park that was just professionally appraised for 225k. I also own all the units and I am in NC not CA. All you folks who are attacking Ryan for HIS success storie should re-think your motives.
I agree his valuations are quite liberal. But his cash flows are good enough in my book that if he never sells he did well.
I will Examine deal one since thats the only one he has closed.
7 units @ $2400 gross
In my park I put aside $50 per home per month for maint. I also pay the well electric $25 the tenants cut lawns and pay for trash. Insurance is about $50 a month and I have $75 in misc. fund. This is $500 per month in expenses. I have run this park for 4 years now so I know these numbers to be true.
Taking out expenses from gross leaves us with $1900 monthly.
I believe Ryan said he recieved financing for 5% for 20 years. This would make his debt service on 65k 428.97 monthly, taxes for me are roughly $1200 for the year so we add an additional $100 per month making PITI $528.97. Now lets subtract that from our remaining $1900. Which leaves $1371.03 net Cashflow! What is so bad about that? This little park brings him $228.51 per unit net! Thats Lonnie deal numbers around here and these never run out and are totally tax deductable.
Now for you park owners that have several hundred grand to play with this would be a miniscul deal to you, but to the rest of us who are just trying to get something that pays monthly and replaces the job I say Ryan has a very nice success right here! I don’t care nor does the market care what Ryan feels it will be worth when he is done with fix-up. The market always establishes it own Value. This Cash flow speaks for itself. How many small parks at $1300 net a month would it take to replace your job? Some of the supposed Millionaire brokers on this board have forgotten the common man and the common man’s abilities to aquire propertys. We can’t all go pick-up lot rental only parks for millions so we must play the hand we were dealt. Why is that so wrong? Ryan took action produced a nice positive cashflow and all you can say is his future valuations are way off? Who cares, what matters is month to month! Lets not all become cynics to every deal thats outside the box. Take Care ScottS(NC)
Doesnt a success story like this make you… - Posted by Trent
Posted by Trent on July 21, 2003 at 09:11:07:
Doesnt a success story like make you want to buy more books and courses from this site…Makes you wonder if any of this stuff works or if someone is just trying to sell their information…
Re: Success or wishful thinking - Posted by Eddie-MI
Posted by Eddie-MI on July 20, 2003 at 22:44:40:
I agree with you Greg. But you know what- I believe this guys story. I have seen a few guys overpay on similiar parks. If he gets financing on a 10 space rental park for 400,000- I would be shocked.
Don’t mean to get into specifics…but did that 29 unit park sell fast and for good money? My experience has been that these smaller parks dont sell that quickly- which is good.
Re: Success or wishful thinking - Posted by Trent(MS)
Posted by Trent(MS) on July 20, 2003 at 19:42:57:
I agree with you…This make me wonder how many other success stories are a little stretched from reality…
Re: Success or wishful thinking - Posted by Mr. C
Posted by Mr. C on July 20, 2003 at 15:03:04:
It’s pretty obvious that his “desire to aquire” got the better of him. His “future value” numbers are laughable. The fact that this was posted as a success story is unexplainable.
The only smart thing he did was using OPM to pull it off.
Here are the Expenses for the 7 Unit - Posted by Ryan_MO
Posted by Ryan_MO on July 22, 2003 at 17:52:32:
For the expenses, all tenants cut their own lawns, pay all their own utilities, water/sewer/trash/electric. The only expenses I have are unit maintenance, taxes, insurance, legal and accounting fees which I am aportioning each month throughout the year. So here is them all broken down.
July rent (5 unit) - $1450
Misc. Maint fund - $250, $50/occupied home
Insurance - $55, liability and unit ins. combined
Tax - $19.70
TOTAL EXPENSES - $324.70
Monthly Net - $1000.31
We now have 1 of the 2 vacancies filled at $350 making august revenue $1800.
By the end of july, all units will be occupied with a rent of $2150. We will then begin a few rent increases seperated by a few months to bring rents up to market rents.
Just clarifying the numbers. Greg was pretty much right on it when he described his park in relation to mine. The only exception being it is financed at 9% over 5 years, remember I got private financing using OPM for purchase price and closing costs, and will be refinanced in December for 20 years @ about 5.5%.
Hope these numbers make more sense to everyone.
Re: SUCCESS WHERE IT MATTERS! - Posted by Eddie-MI
Posted by Eddie-MI on July 21, 2003 at 13:39:12:
I think the deal he made on the 7-unit isn’t that bad. He bought it with 2 vacants though, so it doesnt gross 2400 a month.
To be honest, his numbers are better than the small park I bought. The big reason is the septic and well- that helps a lot. Hopefully he checked the quality of the tenants and the tax returns if he is going to be making cash offers this high.
I have seen a few of these type of parks go sideways, but at least he took the action and bought something. Better than not taking a chance.
Personally though, i would just spread my risk out and bought a bigger park. I can buy 50 unit parks all day long for 400,000.
Whoo! Simmer! - Posted by Steve-WA
Posted by Steve-WA on July 21, 2003 at 11:12:24:
Good post - obviously, you have some strong emotion here.
And rightly so. Bravo.
Please clarify your monthly debt expense:
How many tenants?
You mention well electric, so I assume no meter. Is there truly no other water expense than $25? Because from park folks I have talked to, water is the HUGEST monthly expense.
What about sewage? Septic? Sewer? I assume septic; how often is it pumped? Enough to figure in some kind of monthly expense (pumped every month/quarter/semi/annually?) Or does the misc. fund cover this?
Sorry to pry, just looking for comps.
I am a skeptical person too…but - Posted by Philip
Posted by Philip on July 21, 2003 at 14:39:30:
I had a little RE investing experience when I started reading on this site.
I have bought 1 book and read the archives.
I have bought a few mobiles, done the “homework” on 1 park that I DID NOT buy, BECAUSE of the information from this site. And started a few more deals.
All my payors have payed on time each month, and I have 2 investors now lined up, with more possibles on the way. I have used very little of my own money.
I have not truly made money yet because I have a first year tax hit to swallow…so I know it isn’t a rose garden…and the one book I bought; addressed that IN THE BOOK.
I have received thousands of dollars worth of FREE advice from people who post here. And once I started investing people “in the field”, from realtors to mh park managers gave me thousands of dollars more of FREE advice.
The one $30.00 book I did buy has definetly payed off for me…and I am about as skeptical of human nature as you can find.
Not ONE single person here has PUSHED anything on me…except at the very start…and that was another poster…not an author.
So…is there money being made from books and courses…you bet! IS THAT BAD? No. It is up to each individual. Some folks buy courses for years and never invest…others start before their first book gets to them.
Is everyone involved with this site, or any other, purely motivated without fault…duh! Of course not…it is a site about making money!
Making money isn’t what life is all about…and the author of the ONE book I bought repeated…“PIGS GET FED…HOGS GET SLAUGHTERED.” So apparently he understood greed…and just ordinary prosperity.
I like that.
It’s what you make it.
Nope - Posted by Tony-VA/NC
Posted by Tony-VA/NC on July 21, 2003 at 10:20:08:
Nope, it makes me want to go out and take action, buy another property. Buying courses (Ryan does not sell one by the way so he profits from his investments not a course) is only an education.
Try doing one of these deals and you will realize where you are lacking information that courses or people here can provide. Use that info and do a deal. That’s what this is about.
So you don’t believe someone’s success story. Ok. But ask yourself this, “what have I done today to make a success story for myself?” Buying another course does not count. Applying a course does.
Re: Success or wishful thinking - Posted by Rich
Posted by Rich on August 18, 2003 at 10:13:38:
hi greg my name is rich from lansong area and i am wondering if you know of any modular or mobile home parks for sale in my area
Been there, discussed that. - Posted by Oliver
Posted by Oliver on July 20, 2003 at 17:06:10:
This topic has already been hashed out. Go ahead and scan a littler further down.
Some more numbers from my area - Posted by Philip
Posted by Philip on July 21, 2003 at 14:24:54:
You are from a different region, but I will tell you the electricity costs for a 33 space park here in Missouri. I discovered these documented numbers through “due diligence” for a park I couldn’t afford to buy!
Total electric for the pumping of water for 2002 was $1,601.00. That is on it’s own meter.
So, about…what $135.00 per month?
Anyway, I was surprised at how little water was used(or leaked) in this 33 space system for that year.
The park was about 92% occupied, so it wasn’t a half-empty park.
Re: Whoo! Simmer! - Posted by ScottS(NC)
Posted by ScottS(NC) on July 21, 2003 at 13:13:27:
I think Ryan is getting discouraged on a deal a newbie should be encouraged on. Yes, his valuations are suspect but the most important thing is monthly cashflow and it is excellent.
I have a well that supplies my 6 homes(6 tenants) with water it has for almost 30 years(park was built in the 60’s). The electric to run the pump is $25 a month. It is on its own meter that I pay. The homes are each metered seperately. The septic tanks are pumped every 3-5 years and are about $90 a tank or all for $500. This is in the misc budget. I have also had to replace the well pump it was $800 I paid for this out of monthly cashflow. I have a 3yr warranty on the new pump. So these items water and sewer are minimal in rural settings. HTH Take Care ScottS(NC)
Re: looking for modular or mobile home park - Posted by Rich (mi)
Posted by Rich (mi) on August 18, 2003 at 10:47:07:
I’m looking for a modular or mobile home park in michigan does anyone know where i would start to look