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Mobile Home Park Investors with Jefferson Lilly & Brad Johnson

The Mobile Home Park Investors Podcast is the world’s first podcast dedicated to mobile home park investing. This weekly podcast explains the intricacies of this unique real estate niche and details why an investor would want to own a mobile home park, either directly or through a real estate fund. Current manufactured housing community owners will find this podcast helpful in improving their mobile home park’s operations and profitability. The Podcast is hosted by Jefferson Lilly and Brad Johnson who are the co-founders of Park Street Partners, a private real estate investment firm focused on mobile home parks. The company seeks to deliver its investors superior cash flow returns by acquiring and investing in undervalued mobile home parks. Park Street Partners does this while helping to solve America’s affordable housing crisis by improving communities and increasing the supply of housing in the markets it operates in.
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Mobile Home Park Investors with Jefferson Lilly & Brad Johnson
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Now displaying: 2016
May 5, 2016

Welcome to episode 19 of the Mobile Home Park Investors podcast, hosted by Jefferson Lilly and Brad Johnson, with Park Street Partners. Today, Jefferson and Brad discuss a case study on a mobile home park that’s near and dear to their hearts. It’s called the Cherrywoods Mobile Home Park and it’s the first deal they bought in their partnership.

 

Key Takeaways:

[1:48] The Mobile Home Park Investors podcast has over 3000 downloads per month!

[2:40] Check out Cherrywoods.net to see how the Park Street Partners set up their websites.

[2:57] Jefferson and Brad talk about how they found the Cherrywoods Mobile Home Park and all the things they love about this property.

[5:34] The Cherrywoods Park was developed in 1996, which is a rare find.

[6:56] The seller was open to seller financing, which is something the Park Street Partners love.

[11:59] Current rents on properties in the same town, according to rentometer.com.

[14:21] The type of property manager to look for and that you want to have for your park.

[17:29] Jefferson and Brad have easily doubled their money on the property, in a little under two years.

[18:57] Jefferson touches on determining capital rates from looking at the property’s PNL.

[20:42] It wasn’t obvious they were going to fill up the Cherrywoods Park as well and as quickly as they have. What were some signs of softness in that market?

[25:32] Selling the Cherrywoods property today would produce a nice return but that doesn’t beat getting 25% cash-on-cash returns for the foreseeable future.

[27:30] Check out episode 18 to hear all about how the returns can be nearly tax-free.

[30:21] What’s the debt service coverage ratio on the Cherrywoods park?

[32:56] Interested in partnering up? Check out episode 14 to learn the specifics of the Park Street Partners’ partnership strategy. 

 

Mentioned in This Episode:

Park Street Partners www.parkstreetpartners.com

Mobile Home Park Investors www.mobilehomeparkinvestors.net

deals@parkstreetpartners.com

Park Street Partners - Investment Opportunities

Park Street Partners - Resources

Mobile Home Park Investors

Mobile Home Park Investors Group on LinkedIn

Send your deals to: deals@parkstreetpartners.com

EP018: Accelerate Your Depreciation to Save on Your Mobile Home Park Property Taxes

EP014: How to Partner and Invest with the Park Street Partners

cherrywoods.net

rentometer.com

Apr 28, 2016

Welcome to episode 18 of the Mobile Home Park Investors podcast, hosted by Jefferson Lilly and Brad Johnson, with the Park Street Partners. Today, Jefferson and Brad follow up on episode 17, which was all about taxes and only briefly touched on depreciation. Today’s episode will focus exclusively on depreciation and will get into details on why mobile home parks are such a great tax strategy to legally shelter income through accelerated depreciation.

 

Key Takeaways:

[1:35] It doesn’t really matter how much you make, it matters how much you keep.

[2:41] “Mobile home parks are just land.” “There are no assets to depreciate.” “Land is not depreciable; therefore mobile home parks have no depreciation.” - WRONG!

[3:42] Jefferson gives a rundown of what this asset class actually is.

[4:09] On average, you can probably depreciate about 75-80% of the mobile home park’s purchase price.

[4:31] Not only do parks kick off a lot of cash flow relative to other asset classes in real estate, but the vast majority of that income is tax-free.

[5:58] What does it mean to have 75% of the purchase price of a mobile home park depreciated? 

[8:12] How to go about analyzing how much depreciation you will have on your mobile home park.

[12:01] Once you’ve established what your non-depreciable land value is, then you know everything else is going to be allocated to an asset or to goodwill.

[14:08] Resources available to value your property include firms specializing in cost segregation and some appraisers.

[16:23] How to think through segregating out improvements and whatever leftover goodwill...In the end, don’t forget to take your depreciation.

[18:32] While it’s nice to make a high return, what matters the most is the after-tax returns. 

 

Mentioned in This Episode:

Park Street Partners www.parkstreetpartners.com

Mobile Home Park Investors www.mobilehomeparkinvestors.net

deals@parkstreetpartners.com

Park Street Partners - Investment Opportunities

Park Street Partners - Resources

Mobile Home Park Investors

Mobile Home Park Investors Group on LinkedIn

Send your deals to: deals@parkstreetpartners.net

Apr 21, 2016

Welcome to episode 17 of the Mobile Home Park Investors podcast hosted by Jefferson Lilly and Brad Johnson, with the Park Street Partners. Today, Jefferson and Brad discuss taxes and share helpful tips to help you save on your mobile home park property taxes. Listen in for advice on tax depreciation, how not to pay double taxes on your ‘wheel estate property,’ preparing your CPA for the April 15th deadline, miscellaneous business expenses, and more.

 

Key Takeaways:

[1:39] Today’s episode will cover depreciation briefly. Check out episode 18 for a more in depth discussion on tax depreciation.

[2:18] You can save on your taxes by segmenting out the component costs of any mobile homes that come with your park.

[4:36] Jefferson shares another tax saving idea. 

[8:45] Brad shares tips, especially for 1st time mobile home park owners, on getting your CPA prepared for the April 15th deadline.

[10:36] Jefferson and Brad always advise purchasing your property in some sort of an entity such as a LLC. 

[13:29] What is a promissory note income?

[15:13] What is rent credit income? 

[16:18] Miscellaneous and other types of business expenses for tax deductions. 

[18:14] What other types of expenses are really good for the ‘wheel estate property’ business?

[19:57] Talk to your CPA to make sure you understand how your tax basis is being adjusted every year.

[21:37] A 1031 exchange is always a good idea. Upcoming podcasts will feature a 1031 exchange expert who will step us through the 1031 process. 

 

Mentioned in This Episode:

Park Street Partners www.parkstreetpartners.com

Mobile Home Park Investors www.mobilehomeparkinvestors.net

deals@parkstreetpartners.com

Park Street Partners - Investment Opportunities

Park Street Partners - Resources

Mobile Home Park Investors

Mobile Home Park Investors Group on LinkedIn

Send your deals to: deals@parkstreetpartners.com

Mar 31, 2016

Welcome to episode 16 of the Mobile Home Park Investors podcast, hosted by Jefferson Lilly and Brad Johnson, with the Park Street Partners. Today, Jefferson and Brad talk about how to market a mobile home park. This is obviously an important thing to do and they have specific advice and resources to share on today’s episode.      

 

Key Takeaways:

[1:39] Why is it important to market your mobile home park?

[3:18] “The 800-pound gorilla for advertising in our space is Craigslist.” Brad outlines the pros & cons of advertising on Craigslist.

[6:24] Where do the Park Street Partners get their leads from?

[6:53] What Jefferson used to do but doesn’t anymore!

[8:11] How can you use Facebook & your creativity to advertise properties?

[13:42] What are the advantages of having a website & using Squarespace to create, manage and host your website?

[15:30] How does having a website enables you to use other online services to help you promote your property?

[17:02] What other resources can you use to have a digital presence and promote your property?

[18:49] What are the advantages of using all these resources and doing all this marketing?

 

Mentioned in This Episode:

Park Street Partners www.parkstreetpartners.com

Mobile Home Park Investors www.mobilehomeparkinvestors.net

deals@parkstreetpartners.com

Park Street Partners - Investment Opportunities

Park Street Partners - Resources

Mobile Home Park Investors

Mobile Home Park Investors Group on LinkedIn

Email your deals to: deals@parkstreetpartners.net

Craigslist

Facebook’s Ads Manager

Cherry Woods Mobile Home Park

Postlets by Zillow

SquareSpace

Google Places

MHVillage

YP.com

Yellowpages.com

Switchboard

Zillow

Mar 24, 2016

Welcome to episode 15 of the Mobile Home Park Investors podcast, hosted by Jefferson Lilly and Brad Johnson, with the Park Street Partners. Today, Jefferson and Brad discuss some of their deals that have fallen out of bed for various reasons. These include deals they passed on after having done varying levels of diligence, all the way to the point of having them under a contract. Listen in to learn how not to let your emotions lead you to closing a bad deal.

 

Key Takeaways:

[1:12] What not to do when closing a deal? Don’t let your emotions guide you no matter what.

[2:44] Tale from the road to closing the Blue Grass State deal.

[5:21] As Warren Buffet advises…invest in a business that any idiot can run because sooner or later, one will!

[6:07] What are some red flags to look out for when you’re in the process of closing a deal?

[9:37] Tale from the road to closing the Texas deal.

[13:19] Why was the Park Street Partners’ 1st deal (a single-wide Michigan) a bummer and why did they call 113 banks?

[18:06] Another tale from the road to closing a double-wide Michigan deal.

[20:59] The Indiana deal seemed like a great opportunity, but the seller back paddled out of the deal.

[25:31] What kind of due diligence issues have lead the Park Street Partners to cancel a deal?

[26:42] What are the key lessons learned from some deals which have fallen out of bed for various reasons?

 

Mentioned in This Episode:

Park Street Partners www.parkstreetpartners.com

Mobile Home Park Investors www.mobilehomeparkinvestors.net

deals@parkstreetpartners.com

Park Street Partners - Investment Opportunities

Park Street Partners - Resources

Mobile Home Park Investors

Mobile Home Park Investors Group on LinkedIn

Send your deals to: deals@parkstreetpartners.net

Mar 17, 2016

Welcome to episode 14 of the Mobile Home Park Investors podcast, hosted by Jefferson Lilly and Brad Johnson, with the Park Street Partners. Today, Jefferson and Brad will discuss details on how you can partner with them or 'bird dog' for them. Over the last year, many people have reached out to PSP and shown interest in jointly investing and partnering with them. They will talk about some of the partnerships they have done in the past and guide you on what they look for in parks. Their goal is to help you be more efficient in your search, also to be more efficient for them when they get deal flow that is really focused on what they consider to be the best kind of parks to acquire.

 

Key Takeaways:

[1:53] What kind of deals add value for the Park Street Partners?

[4:41] Brad details some of their acquisition criteria.

[8:03] Jefferson lets us in on a little secret!

[9:56] Brad talks about some red flags on a property.

[11:34] Details on specific situations that they have partnered with folks, in the past.

[12:21] Their 1031 exchange deals, main ways you can partner with them, and how they have partnered with people in the past.

[14:20] Jefferson & Brad are flexible to work with people! They are happy to explore partnerships, and to educate/coach you on a deal.

 

Mentions:

Park Street Partners www.parkstreetpartners.com

Mobile Home Park Investors www.mobilehomeparkinvestors.net

deals@parkstreetpartners.com

Park Street Partners - Investment Opportunities

Park Street Partners - Resources

Mobile Home Park Investors

Mobile Home Park Investors Group on LinkedIn

You can send us deals to deals@parkstreetpartners.com

Sperling’s Best Places

City Data

LoopNet

Mar 10, 2016

Welcome to episode 13 of the Mobile Home Park Investors podcast, hosted by Jefferson Lilly and Brad Johnson, with the Park Street Partners. Today, Jefferson and Brad will discuss Capital Expenditures (CAPEX), which are generally larger ticket items that you will be paying for with your mobile home park property, at some point or another. Of course, if you do your due diligence up front, you might not need some of these, at least not in the near-term. So today, Jefferson and Brad will talk about some of the large ticket items they have had to spend relatively larger dollars for, such as roads and utility lines.

 

Key Takeaways:

[1:26] These large ticket CAPEX items may sound scary, but here is the bright side!

[3:19] Capital expenditures for repair & maintenance on buildings vs. land.

[4:57] The biggest large ticket/one-time, non-recurring expenses for mobile home parks are water & sewer pipes.

[8:47] New technologies can reduce repair & maintenance costs and help keep your capital expenses lower.

[9:52] Roads are probably the 2nd biggest capital expense that you can have.

[15:37] Note: we have covered CAPEXs on roads & utility lines, assuming your park is on the public water & sewer system.  

[16:40] Another potentially large capital expenditure item: Water meters.

[19:39] American Lead Detection (ALD) is technically not a capital expense but it can lead to some capital expense work.

[23:28] Improvements you can make to the signage of the park that are not expensive from a capital stand point.

[24:46] Info. on tax treatments for all of these capital expenditures.

[25:27] Rough rule of thumb on how much you should budget for CAPEXs.

 

Mentions:

Park Street Partners www.parkstreetpartners.com

Mobile Home Park Investors www.mobilehomeparkinvestors.net

deals@parkstreetpartners.com

Park Street Partners - Investment Opportunities

Park Street Partners - Resources

Mobile Home Park Investors

Mobile Home Park Investors Group on LinkedIn

You can send us deals to deals@parkstreetpartners.com

American Leak Detection

Mar 3, 2016

Welcome to episode 12 of the Mobile Home Park Investors podcast, hosted by Jefferson Lilly and Brad Johnson, with the Park Street Partners. This is part 3 of a 3 part series where Jefferson and Brad discuss what you should do over the first 30 days that you own your park. On this last episode of the 3 part series, Jefferson and Brad will discuss managing the books, the new rules and regulations, why Pitbulls are a ‘vicious’ breed, and more!

 

Key Takeaways:

[1:20] After covering PNLs on episode 11, the discussion moves onto the books.

[2:40] Jefferson managed his books for his park for about the 1st 4 months.

[3:31] You can use software to make the process simple!

[4:50] Distributing the new rules & regulations to your tenants.  

[5:20] The No Vicious Breed Dogs Policy in the rules & regulations is very important.

[7:37] Why Pitbulls are now a high risk breed? See article by Malcom Gladwell!

[8:26] What if a tenant rejects the rules & regulations? Or what if they don’t sign the rules & regulations & return it?

[10:03] Join your local state’s Manufactured Housing Association for free resources on rules & regulations.

[11:11] Make sure all utilities are put into the new entity name.


Mentions:

Park Street Partners www.parkstreetpartners.com

Mobile Home Park Investors www.mobilehomeparkinvestors.net

deals@parkstreetpartners.com

Park Street Partners - Investment Opportunities

Park Street Partners - Resources

Mobile Home Park Investors

Mobile Home Park Investors Group on LinkedIn

Quick Books

AppFolio – Commercial Property Management Software

Why Pitbulls are a high risk breed? by Malcom Gladwell

Feb 25, 2016

Welcome to episode 11 of the Mobile Home Park Investors podcast, hosted by Jefferson Lilly and Brad Johnson, with Park Street Partners. This is part 2 of 3 episodes where Jefferson and Brad discuss what you should do over the first 30 days that you own your park. Following up on last week’s cliff hanger, today’s episode will cover advice on setting up your park’s website, marketing and advertising, and installing or managing your park’s water meters.  

 

Key Takeaways:

[1:28] You can easily set up your property’s website using Square Space or Wix.

[3:44] Square Space has some cool analytics that show traffic volume.

[4:20] What are the key things to put up on your website? 

[6:58] You can advertise across various sources such as Zillow, Craigslist, and Trulia.

[8:48] Include your URL in the medium you advertise in.

[11:32] Make sure to get new signage for your park.

[13:56] Jefferson discusses details and importance of installing a water meter in your park. 

[19:13] Don’t try to make a profit on the water.

[22:05] How to manage if your park already has water meters, meaning it’s sub-metered.

[25:19] Listen to next week’s podcast for part 3 on the first 30 days of owning your park.


Mentions:

http://www.parkstreetpartners.com/

http://www.parkstreetpartners.net/real-estate-syndication/

http://www.parkstreetpartners.net/resources/

http://www.mobilehomeparkinvestors.net/

https://www.linkedin.com/groups/131404/profile

http://www.squarespace.com/

http://www.wix.com/

http://www.zillow.com/

https://www.craigslist.org/about/sites

http://www.trulia.com/

Feb 18, 2016

Welcome to episode 10 of the Mobile Home Park Investors podcast, hosted by Jefferson Lilly and Brad Johnson, with the Park Street Partners. This is part 1 of 3 episodes where Jefferson and Brad will discuss what you should do over the first 30 days that you own your park. That is a very key transition period, which will set the tone for your management style with the manger as well as with the tenants. Hence, it’s a highly critical 30 days to get right. If you invest the time, effort, and a little bit of money in getting your first 30 days done correct, then you should have fairly smooth sailing going forward. Today’s episode will cover advice on the park manager, collecting rent, and the telephone!

 

Key Takeaways:

[1:39] One of the critical issues to address is, what to do with the park manager.

[4:00] Advice on finding a new manager for your mobile home park – Putting up flyers.

[5:55] What to do if you love the manager but they’re not tech-savvy!

[7:48] What if you’re remote & can’t put up flyers on the front doors of mobile homes?

[9:28] Other ways to find mangers – Placing ads in Craigslist or workingcouples.com.

[11:12] Don’t feel panicked if you haven’t found the perfect manager and are about to close.

[11:54] Collecting rent by using rent boxes.

[12:54] Jefferson & Brad are a big fan of onsite rent boxes.

[13:35] The advantages to having a rent box.

[15:11] You want to get the rent in as quickly as possible.

[17:01] Jefferson & Brad recommend having a centralized rent box installed onsite.

[17:25] The telephone is a critical component of the first 30 days.

[17:46] Jefferson explains setting up & working with Grasshopper.

[22:10] Stay tuned for more on what to do in your first 30 days, coming up in episodes 11 & 12.

 

Mentions:

http://www.parkstreetpartners.com/

http://www.parkstreetpartners.net/real-estate-syndication/

http://www.parkstreetpartners.net/resources/

http://www.mobilehomeparkinvestors.net/

https://www.linkedin.com/groups/131404/profile

http://www.workingcouples.com/

https://www.craigslist.org/about/sites

http://www.lowes.com/

http://grasshopper.com/

 

Feb 11, 2016

Welcome to episode 9 of the Mobile Home Park Investors podcast, hosted by Jefferson Lilly and Brad Johnson, with the Park Street Partners. Today, Jefferson and Brad are going to talk about closing a deal on a mobile home park. They will detail what sorts of documents and procedure are required in order to have your money go to the seller and have title come from the seller to you. At a high level, that’s what closing is all about, money goes one way and title goes the other.  

 

Key Takeaways:

[2:14] The 1st step to take once you have an agreement to purchase property.

[3:21] If you don’t get title, what are you really buying?

[4:46] The next step to take after signing paper work.

[6:29] How can you establish yourself as a legitimate buyer?

[6:47] More importantly, you don’t wanna give the seller an excuse to cancel the deal.

[8:06] Part of opening escrow involves the title company opening their preliminary title process.

[8:30] What are you actually buying with title insurance?

[11:23] Jefferson discusses the actual process of signing documents.

[15:07] What is the settlement statement? Brad explains.

[18:44] The last step taken by the title company to close a deal.

[19:02] How does Jefferson like to celebrate when he closes a deal?

 

Mentions:

http://www.parkstreetpartners.com/

http://www.parkstreetpartners.net/real-estate-syndication/

http://www.parkstreetpartners.net/resources/

http://www.mobilehomeparkinvestors.net/

https://www.linkedin.com/groups/131404/profile

First American

Chicago Title

Feb 4, 2016

Welcome to episode 8 of the Mobile Home Park Investors podcast, hosted by Jefferson Lilly and Brad Johnson, with the Park Street Partners. Today, Jefferson and Brad will discuss seller carry, also known as seller financing. This is when a seller of a mobile home park carries back the mortgage, which allows the owner of the mobile home park to not have to deal with a bank to get a mortgage and to close a deal more quickly.

If you like this podcast, please subscribe to it on iTunes or Stitcher and rate us highly.

 

Key Takeaways:

[1:29] It’s best to negotiate directly with the seller, even if buying property through a broker.

[2:30] What are the benefits for a seller to carry back the mortgage?

[7:53] Brad explains the depreciation recapture component of seller financing.

[10:07] The downside for a seller to carry back the mortgage is de minimis.

[12:37] The best part about seller financing.

[13:19] A key benefit for a seller who offers seller carry.

[13:42] What to do once you agree to seller financing.
[16:17] Much easier to get a deal done when a seller agrees to let you pay them back over time.

[16:32] Another benefit for the seller to carry back paper.

[17:52] It’s important to treat your sellers well; and they can serve as a reference for you.

[19:25] Negotiating the debt documents, cure rights, and the promissory note.

 

Mentions:

http://www.parkstreetpartners.com/

http://www.parkstreetpartners.net/real-estate-syndication/

http://www.parkstreetpartners.net/resources/

http://www.mobilehomeparkinvestors.net/

https://www.linkedin.com/groups/131404/profile

 

Jan 28, 2016

Welcome to episode 7 of the Mobile Home Park Investors podcast, hosted by Jefferson Lilly and Brad Johnson, with the Park Street Partners. Today, Jefferson and Brad will discuss third party reports. If you have a mobile home park under contract and are looking for any type of debt, this is the time for getting down to brass tacks. Even if you’re paying all cash for a park, 2 of the 3 third party reports are very important no matter what, and the 3rd one is important specifically to a bank.  

 

Key Takeaways:

[1:23] 1st third party report: the Phase 1.

[3:02] How you could be liable for ‘LUST’? – Leaking. Underground. Storage. Tanks.

[4:50] If there is LUST, you’ll need to do a Phase 2 report.

[5:47] More on phase 1 – costs and desktop reviews.

[7:05] 2nd third party report: the Survey.

[8:29] Boundary survey vs. full ALTA survey.

[9:49] Key things to look for on the survey.

[12:00] 3rd third party report: the Appraisal.

[15:26] Problems with appraisers who are not specialized in park appraisals.

 

Mentions:

www.parkstreetpartners.com

Join the LinkedIn Group: Mobile Home Park Investors

Please rate the podcast on iTunes or Stitcher

Please subscribe to the podcast on iTunes

Jan 21, 2016

Welcome to episode 6 of the Mobile Home Park Investors podcast, hosted by Jefferson Lilly and Brad Johnson, with the Park Street Partners. Today, Jefferson and Brad will share their insights on finding a loan in order to invest in a mobile home park. You actually need to pay for your mobile home park in order to buy it!

 

Key Takeaways:

[1:12] Debt eligibility varies with the size of the park.

[5:03] Information required by banks & how to show you are a credit-worthy borrower.

[7:21] What can you expect on your first loan?

[8:50] Dealing with state-wide banks.

[11:08] The first question to ask a lender.

[13:54] Jefferson shares an amusing story on his experience with lenders!

[18:13] Lesson learned: persistence pays!

[18:38] What are banks looking for?

 

Mentions:

www.parkstreetpartners.com

Join the LinkedIn Group: Mobile Home Park Investors

Yellow Pages

Google Maps

Please rate the podcast on iTunes or Stitcher

Please subscribe to the podcast on iTunes

 

Jan 14, 2016

This is part 2 of the discussion on initial off-site diligence you can do prior to buying a mobile home park. Jefferson Lilly and Brad Johnson, with the Park Street Partners, continue their discussion from episode 4 (part 1), which covered due diligence you can do via desktop research and things to look for in financials. On this episode, they will advise on what to look for in the infrastructure of a park and how to handle a first call with the seller.

 

Key Takeaways:

[1:35] What is the most important aspect of a park's infrastructure?

[2:15] Determining if a park is on the public utilities system: city water & city sewer.

[4:46] A park that is on the septic system presents a high-risk investment.

[7:40] Park infrastructure: Master-metered gas and electric lines.

[9:36] What options do you have if you get a gas leak and have to shut down service?

[12:00] You can have someone check out the electric load of a park on-site.

[12:35] Understanding what is going on with the water infrastructure.

[13:40] Fixing a water leak on a mobile home park property.
[18:09] Park infrastructure: Roads.

[20:53] Park infrastructure: AMP boxes.

[23:21] Park infrastructure: Sewer pipe system.

[28:38] First call with a seller: Information to gather and types of open-ended questions to ask.  

[33:55] A key open-ended question to ask the seller: Why would you sell your park?

[35:02] Another open-ended question to ask: How do you manage your property?

[37:00] Other things to discuss with the seller.

[39:59] Coming up on following podcasts.

 

Mentions:

www.parkstreetpartners.com

LinkedIn Group: Mobile Home Park Investors

www.mobilehomeparkinvestors.net

Please rate the podcast on iTunes or Stitcher

Please subscribe to the podcast on iTunes

Jan 7, 2016

On part 1 of this two episode podcast, Jefferson Lilly and his partner Brad Johnson, with the Park Street Partners, will provide resources and advice on doing off-site diligence before deciding to buy a mobile home park. This is the part when you first get a deal and are beginning to decide if you want to pursue it, which can be a scary moment. Jefferson and Brad will outline how you can do a fair amount of diligence by doing desktop research and making phone calls. Part 2 (episode #5) will cover on-site diligence, which is done after you’ve got your property under contract.  

 

Key Takeaways:

[02:13] Due diligence on a mobile home park in 30 seconds or less – The first 15 seconds

[04:37] The next 15 seconds of your diligence

[06:27] The 30 seconds of diligence – Summarized

[07:15] Researching if demographics support a successful park investment

[08:09] Demographics data – What to look for?

[09:48] Refer to multiple websites and verify the accuracy of the data

[11:08] Markets that meet demand for mobile home parks – Data on household income & housing vacancy

[12:08] Data to look for on rentometer.com? 

[14:08] Contact local mobile home dealers. What types of open-ended questions to ask?

[16:33] Call the chamber of commerce and ask open-ended questions

[20:03] Is the park properly licenced? Certificates of occupancy and other Gov. Regulations

[20:58] Local zoning office – Legal vs. illegal uses of a park

[23:11] How to use Google Earth and Google Maps Images to do more diligence

[27:45] Financials – This is where mobile home parks get sexy!

[28:05] Pay attention to expense loads that greatly diverge from 30% to 40%

[32:38] Supplement these guidelines by verifying property owners’ bank statements

[37:31] Another key thing to verify when going through bank statements

[39:45] Request tax statements from your seller

[40:10] Another key diligence point for financials – The rent role

[41:04] Why a Lonnie dealer is a force to be reckoned with?

[41:55] Why the rent role is important?

[43:59] Part 1: Off-site diligence – Initial desktop research & what to look for in financials

[44:11] Coming up on part 2 (episode #5): On-site diligence – Infrastructure & first call with the seller

 

Mentions:

www.bestplaces.net

www.city-data.com

www.zillow.com

www.axiometrics.com

www.marcusmillichap.com

www.rentometer.com

Census Statistics

Google

Google Maps

Google Earth

Deals on Wheels by Lonnie Scruggs

www.parkstreetpartners.net

LinkedIn Group: Mobile Home Park Investors

www.mobilehomeparkinvestors.com

Please rate the podcast on iTunes or Stitcher

Please subscribe to the podcast

 

 

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