This is the event in which Frank & Dave, who have owned and operated over $100 million in mobile home parks over the past decade, show you the shortcuts, tricks and insider secrets that you need to know, in a real-world setting -out in the field inside real mobile home parks. It is a complete three-day immersion in the mobile home park business, from how to find parks to buy to evaluating them, negotiating them, doing diligence on them, financing them, closing on them, and operating them.

For more information, call (800) 950-1364 or go to www.mobilehomeparkstore.com.

Frank & Dave’s Opinion of This Story:

If you don’t go to our Boot Camp before buying your first park -you’re crazy. We make up the cost of the Boot Camp within the first few minutes of negotiating your contract, or the first month of operations of the park. The biggest names in commercial real estate come to this Boot Camp before jumping off into the park business.

What makes this event so exciting is that almost half of it is held in the field – in actual mobile home parks. You will walk around everything from no-star to 5-star parks and learn how they work and learn the difference between a good deal and a bad deal.

“We really like doing this event in Dallas, as Frank and I have owned so many mobile home parks over the years here and really know this market well” said Dave Reynolds. Some of the parks that will be toured are ones they have formerly owned, as well as ones that they currently own.

For more information go to www.mobilehomeparkstore.com, or call (800) 950-1364.
Frank & Dave’s Opinion of This Story:

If you buy a mobile home park without attending this Boot Camp, you have made a serious mistake. This event will pay for itself many, many times over. We have actually had people who took the Boot Camp and turned around and dropped the deal they had under contract before they showed up, in order to pursue better deals that we showed them how to find. Others have found great deals immediately following the boot camp, using the principals we taught them.

The noise level at Leisure Lake is currently at 78 decibels. The wall will lower that sound level to around 60 decibels. A normal conversation is at a level of about 60 to 70 decibels.

This section of Highway 101, including the sound wall, will cost about $20 million. The park has 134 lots.

The city arts commission has also proposed to decorate the wall with 40 inch medallions depicting scenes of Petaluma history and culture.

“We’re ecstatic about it” said Carol Pederson, the manager and resident of the park. “We were afraid it was going to be put on the back burner. It’s a godsend for us”.

Work on the project should begin in 2011.

Frank & Dave’s Opinion on This Story:

Just further evidence of the new “love” city government has for mobile home parks. Somehow, mobile home parks have become the new favorite child of city hall. We think it’s because they have finally realized that mobile home parks are a far better form of affordable housing for cities than low-cost apartments. We just hope that low-cost apartment owners are ready for the same scrutiny and scorn that park owners had to endure for decades.

Waterhouse, who bought the park in 2005, is suing the city, claiming that the park has not been a senior park for years, since past owners did not do a census of residents’ ages, as required by law. As a result, he wants the park to be open to all ages.  Rents in the 200 space park are around $450 per month. Stick-built homes in the market are between $320,000 and $650,000. Many seniors contend that if the park becomes all-age, they have been harmed, since they bought their home with the assurance that it would be a senior park, and cannot afford to move.

“We’ve hired an attorney to go over the lawsuit” said Larry Asp, President of the American Canyon Manufactured Homeowners’ Coalition, a group that represents the park’s residents. 

Frank & Dave’s Analysis of This Story:

Expect to see more of these type of news stories, as park owners try to expand their customer base to soak up vacancies. There are many parks out there that are designated “senior only” which are no longer in demand by seniors, and the only way to fill vacant homes and lots are with families – and they are unable to move in due to age restrictions. If someone said to us “do you like senior parks?” we’d say “sure, as long as it’s not limited to seniors”. You can still have a senior park with no age restriction, if that’s the way that the demand takes it. But you want to be flexible to react as markets and trends change.

Channel 38 went on the air in 1989, and was started by Saint Clement Episcopal Church, The Channel 4 building was built in 1940.

Galaway moved to El Paso in 1961, and developed 450 mobile home lots while working full time as an electrical technician. “The Bible says to go into the world to spread the gospel” said Galaway. “This is my way of doing it”.

Frank & Dave’s Analysis of This Story:

It’s pretty neat that a guy can make enough money with a mobile home park, on the side, to pay for his dream.

Glenn Whitaker, the owner, says that he is closing the park because he is in bad health and the park is as worn out as he is. The sewer lines are bad, and few of the residents pay their rent – and he doesn’t hassle them because he knows they can’t afford to pay it.

“Well, I’ve known Mr. Whitaker for 40-something years…his health’s not good and it’s time for him to retire” said resident Fred Case.

Whitaker has offered to bring in a moving company for the tenants at a reduced price.

Frank & Dave’s Analysis of This Story:

The next time your tenants complain about a rent increase, this is your argument. If the park does not make money, if it cannot pay its bills, it will go out of business and they will have to move out. If this park cash flowed, it would not be closing down. It is in your tenants’ best interests to make sure that the park’s financials are healthy – for their own sake. Remind them of this.

The type of park you’ll need

To make an immediate $100,000 in cash flow with a mobile home park, you’ll need to find a park that has around 80 lots. A park with 80 lots is going to cost around $800,000 and will require about $160,000 down (although in select cases, you may be able to get away with $80,000 down).

The park will need to have city water and city sewer services, and be in a market of at least 100,000 population.

How the deal must be structured

You will need to buy the park with seller financing. You’ll want to put between 10% and 20% down, and the note should be non-recourse. Try and get a note length of at least 7 years, so that you have plenty of time to refinance it before the loan comes due. If you are unable to seller finance it, you will be burdened with two things: 1) a larger down payment, as banks right now want around 25% down and 2) banks will only give you recourse debt.

How to create the $100,000 of cash flow

Your goal is to create an additional $100 per month of cash flow per pad. You basically have two components to this 1) raise revenue and 2) cut costs. Let’s go over raising revenue first.

Mobile home park residents are at a great disadvantage when it comes to raising rents. It costs them $3,000 to move their home. So unless they have $3,000 in cash burning a whole in their pocket, they really have no way to move out if they don’t like the new rent amount.

Most parks you can find for sale are under-market in their rent. So you’ll need to find one that is $50 per month under market – which is not that hard to do. That $50 rent increase is going to get you half way to your $100,000 per year goal.

In some parks, you will also find vacant park-owned mobile homes. Getting these back in service may also be a critical path to getting the rent up at least $50 per pad.

Now let’s look at the expenses. The single largest cost in any mobile home park is the water and sewer. In most parks it equals 10% of the total revenue. So this is your first stop in trying to get the costs down. Often you can accomplish this with finding and fixing leaks in the system, or leaks in mobile homes. Other times, you will need to separately sub-meter each space to make sure that the tenant conserves. And in many cases, you’ll want to bill the customer for their own service.

The second big area to attack is the management cost. In many parks, the manager that is getting paid $30,000 per year can be replaced for 1/3 of that. That one step alone can often get you $20 per pad per month in savings.

Here’s the score card.

Getting that $100,000 of cash flow is predicated on raising rents and lowering costs an average of $100 per month per lot. If you can get that done, then you will have 80 lots x $100 per month = $96,000 of cash flow per year. But that’s not all. You also have to factor in your cash-on-cash return on the money you put down. That will push you over the $100,000 mark.

Next steps.

As the mobile home park industry is an extremely odd niche, it will definitely be in your favor to learn more about it, by taking a course on mobile home park investing. You can also find thousands of parks for sale without even leaving your house, by visiting such sites as Mobilehomeparkstore.com and Loopnet.com.

The economy isn’t wasting any time falling apart. Should you be wasting time not getting started?

Frank & Dave’s Analysis of This Story:

There will be more stories like this in the months ahead, as troubles in the commercial real estate financing market are finally dealt with. Would this be a good mobile home park deal? It might be. Most banks have absolutely no desire to be in the mobile home park business. Could you get a loan on it? The first source might be Wachovia. They might be most interested in just putting this loan back into the “performing” category.

“Dallas is a great place to hold the Boot Camp since Frank and I have owned so many parks here” said Dave Reynolds, founder of Mobilehomeparkstore.com, the nation’s #1 website for the mobile home park industry. “We will be walking around a ton of parks – from 1 star to 5 star in quality – some of which we own or have owned. The whole point is to show you how to figure out if a park is a good buy or bad buy, using every shortcut, insider secret and trick we know.”

Many of the attendees go on to buy successful mobile home parks within a few months of the course. “I think we have, by far, the best track-record of people who can act on the information we present. We try to always show the reality of the business, and walk you through the process from indentifying properties to making offers, doing due diligence, finding funding, closing and operating them. Maybe that’s because we’ve personally bought about 100 of them.”

For more information, call (800) 950-1364 or go to www.mobilehomeparkstore.com. These events always sell out, and all tickets are sold on a first come – first served basis.

The trailer on lot #29 is listed at $495,000.

Frank & Dave’s Analysis of This Story:
Can you imagine reading this article if you were they guy who let this thing go back to the bank in 1976? Assuming the average lot, without ocean frontage, sells for $200,000, then this park would be worth $40,000,000! In 1976, it probably had a note of $400,000 or so. It’s still not the most valuable mobile home park in the U.S., which honor arguably goes to Paradise Cove Mobile Home Park in Malibu, California.