Mobile Home Park Cash Flow System for 2015

The final word is: Mobile Home Park Cash Flow System Everyone’s Been Waiting For!

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From Monica Main’s Desk
Wednesday, April 27, 2007, 4:47 PM Pacific Time
Dear Real Estate Investor,I’ve been holding out on you…but not on purpose! You see, any of you who know my real estate investing methods know that I’ve never been a big fan of MHP (mobile home park) investing for One reason: No Financing Available!

All that changed in the first half of last year.

MHP brokers and lenders are in great demand, whereas a year ago they were scarce. As you know, making big cash flows in real estate investments solely depends on you using other people’s money (OPM). When it doesn’t exist, you can’t work a real estate deal unless you are going in with 100% cash. And that’s never a smart way to leverage your money.

MHP funding was difficult to obtain because commercial properties are appraised using the following elements: (1) land value; (2) building value; and (3) cash flow. Since MHPs don’t have any permanent structures, there is no building value to appraise and this would dramatically lower the value of a property despite the cash flow. So, when a MHP owner decided to sell, he or she would sell based on cash flow but the property wouldn’t appraise at the asking price (in many cases) because the property was treated as “raw land,” Or, essentially, worthless.

Now lenders have come to understand that MHPs are a viable investment with solid cash flows and aren’t just a chunk of raw land with a bunch of slabs of cement (or “pads” As they are called.

The sky is the limit! for These types of passive income properties are great!

Much Higher Cash Flow Potential…As Much as TRIPLE of an Apartment Building!

The average apartment building will have a CAP rate between 6% and 9% depending on the location. If you are trying to pull of a no-cash-no-credit deal, you need to be over 9.5% or 10% in order to make the deal work financially otherwise you will barely be breaking even (if you’re lucky)!

These are the best options for those who want to look. for Deals and starting with nothing! You will have to go through listing after listing to find the right deal.

And that just isn’t realistic!

With MHPs, it’s the “norm” Your average CAP rate will range from 12% to 16%. This can vary depending on where you live in the country. If an apartment building has a CAP rate between 12% and 16%, it is likely that the numbers were based on future projections or are exaggerated (and can’t be backed up).

MHPs offer a low CAP rate of 12% in most areas and an average CAP rate of 16%. I’ve seen CAP rates as high as 25% in some areas of the country.

This is something that you won’t find in any other commercial property deal!

You know that the higher your CAP rate is, the greater your cash flow income. You will be frustrated if your CAP rate is not high enough to find commercial property deals exceeding 8%. for nothing!

Quick Comparison: The Power of Mobile Home Park Investing Firsthand

While I was writing this, LoopNet.com took me to a very small northern Florida city. for An example of the power and effectiveness of MHP investing.

I saw an MHP listed for $99,000. It only has 7 “pads” Lot spaces. The CAP rate is at 21% and the occupancy at 100%. Gross income expenses are 20%, while they are 40% to 60% for average apartment buildings. After all expenses paid, the monthly cash flow on this deal is amazing at $2,000 per month or $24,000 per year.!

It’s mind-blowing!!

Across the street is an 8-unit apartment block. for $499,000 having a CAP rate of 7%, an occupancy level of only 75%, and even at 100% occupancy, this deal wouldn’t make you but about $500 per month after all expenses and debt service (mortgage). And that’s ONLY if you are able to put 20% cash down on the deal. You would lose money every month if you had no cash.

And this is just ONE example of the thousands of MHP deals I’ve come across in the past few months!

Continue reading Cash Flow, Fewer Expenses, Cheaper Investments…And No“Tenants“!

Wait a minute! This is how it can be! When there are people living in the park, aren’t those tenants?

Both yes and no.

You can simply lease them. “space” Or “pad” It is basically a slab made of cement that has utility hookups. The tenant brings their own mobile home and secures it to the slab. They pay a monthly fee to have their home parked there.

This means…

They fix their toilets if it breaks. They pay for their air conditioner if it goes out. for it. They are responsible if a neighbor’s child breaks through a window. for replacing it.

And you can fix nothing!

All of you are responsible for It includes landscaping, maintenance of the park’s operations and common utilities (including electricity).

And that’s it!

Responsibilities for your tenants are the owners of the property. for Their own homes. You aren’t!

This is why it’s so cheap to run a park and make huge monthly incomes…because there aren’t many expenses.

The average apartment building’s expenses are approximately 45% to 65% GOI (gross operational income). If you receive $100,000 in annual rental receipts each year from tenants, this means you’re giving back $450,000 to $650,000 annually just in property expenses.

That’s what it is!

What many of my students don’t understand is that the larger the apartment building (or complex), the LARGER THE EXPENSES. I’ve seen 500+ unit buildings (especially those in the north where it’s cold) eat up 85% in expenses on the GOI.

And who can afford to run a building such as that?? (This is why I tell my students that it’s better to get a bunch of very small apartment buildings to keep the expenses down to 25% to 35% rather than jumping at the large buildings.)

A MHP will allow you to spend between 15% and 20% on your expenses. I have seen a few deals where the expenses have been 25%, but that’s not the “norm.” You already know that less expense equals more money.

Plus…BETTER QUALITY TENANTS!

Apartment building investing is difficult, especially in low-middle income areas. Tenant quality is one of the greatest problems. Many of your tenants simply don’t care about your building or the unit you are renting to them.

They don’t care about abusing your property including grinding up an entire Thanksgiving turkey in the garbage disposal (knowing you’ll fix it) or flushing a crack pipe down the toilet (knowing your plumber will fish it out). They don’t care about breaking out screens or ruining the carpet. It’s not their problem because the property isn’t theirs. It’s your problem. They know it!

MHP tenants are renting the slabs of cement. They It’s the foundation of your home. But it’s Theyhome! They take care not only of their homes, but are also responsible for Their own repairs), but the Qualitative Each tenant is unique because they are different “homeowners” And not reckless, careless tenants.

So, even going into your lower-middle class areas that can be challenging as an apartment building owner, it’s a different story with MHP tenants because there is that sense of “pride of ownership.” This means that you don’t have to worry much about graffiti sprayed on the fences outside or someone ripping the landscaping apart with motorcycles. Because the park is composed of “homeowners” They take pride in their homes and their mobile homes. “parked.” You’ll have less riff-raff and problems with tenants which ultimately lowers your operating costs and puts more cash in your pocket.

Many Financing Options Available Sellers will also finance 25% to 50% of your purchase automatically

Many of the MHP owners are retired property owners. for decades. They also don’t know that there is a lot of MHP financing available now. Every MHP owner knows that getting financing is next to impossible…They think so!

MHP listings will usually state that the owner is willing or able to finance or carry back a portion of the deal. They often return 50% of the purchase cost. I’ve seen sellers carry back 90%! This is NOT a normal practice for MHPs.

If financing is available, sellers can help finance a seller carryback (private mortgage contract), while lenders come in to take a first-position loan. These MHP sellers have been in their homes for a long time and have a lot of equity that allows them to offer a private mortgage contract.

MHP sellers will offer seller carryback because they believe they must! They also have tons of equity to support your holding paper!

You do not have to own the property free and clear. Many times these parks are owned outright but they don’t have to be for A seller may offer to continue the deal by letting the seller know.

Some of my lenders even allow me to borrow. for partial seller carry-back…which is RARE And NotSomething you can get for Other commercial property loans

The Secret Isn’t Out…Yet! This Means There’s Virtually NO COMPETITION for The New Investor

Many real estate investors opted to play it safe, not investing in any of their investments for a while. “watch and wait” mode. They wanted to know the direction that the economy would go.

But…

They’ve stopped waiting and started picking up properties left and right…The MASSES…because just about every investor I know thinks the real estate market has already hit rock bottom.

It is now very difficult. for It is possible for a new investor, even though large investment firms are eyeing all the deals.

Here’s the good news…

They aren’t focused on MHP deals…It is not yet. They haven’t seen the potential in the large cash flows because they are too busy picking up bank-owned foreclosures from financially devastated banks.

They will. “clue in” very soon on this incredible MHP opportunity…eventually. They will likely be able to acquire MHP deals by the end this year, just like they do with commercial properties.

When this happens, you’ll be out of luck!

If you think you may have missed the boat with apartment buildings or foreclosures — or if you don’t like dealing with tenants — then mobile home parks is your best real estate investing opportunity!

And you can’t miss out, otherwise you’ll be left out in the cold! MHPs, and other asset classes have already seen a lot of change. In fact, there is only ONE WAY to get MHP deals now…and that’s ALL REVEALED in the 2015 Version of the MHP Cash Flow System!

Incredible Monthly Cash Flow Opportunity!

My biggest pet peeve when students call me to ask how many “units” They need to have a minimum of $10,000 monthly cash flow.

My answer: I DON’T KNOW!

Why? Because cash flows can vary tremendously by region, county, state, and even city (in a single county). After all, don’t you think you’ll have a different cash flow on a 10-unit in Malibu, California vs. a 10-unit in Compton, California?

But I will tell you this…

“Pad” Space rentals start at $350 “low” side to $750 “high” range. Yes, pad rents can even go higher….and they usually do!

If you earn $350 per pad per month and have 50 pads in the park, your monthly gross is $17500 or $210,000 annually. Your expenses should be at least 20% of your income (which is typically 12% to 15%). You will still earn $168,000. Your total acquisition cost would be $750,000 if you finance your park and each lot/space costs $15,000 (average). You would pay $52,522 per annum in debt service, which equals $9,623 monthly cash flow.

And you would have next to nothing in taxes because a county assessor assesses a building on land AND building value…and there are NO BUILDINGS thus LESS IN TAXES!!

The above deal would allow many people to quit work and make a living off their income.

Remember that your income will typically double every 15 years. So, in 15 years from now, you’ll be making $19,246 per month. You can also add $4,377 to your monthly income if you are smart enough to pay off your loan early. This will bring you up the total amount of $23,623 per month!!

My Latest Complete 2015 Mobile Home Park Cash Flow System…

Finally, it’s here, folks! It’s complete! Mobile Home Park Cash Flow System for 2015 This has been RELEASED to public!It is a complete system.

SPECIAL MHP RESTRICTED DIRECTORY – RARE MONEY RESOURCES FOR MHP DEALS

Get instant access and financing from special money sources. This resource is part of your course’s special resource directory. It is not available in any other resource that I have released.

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