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:
Join the LinkedIn Group: Mobile Home Park Investors
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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:
Join the LinkedIn Group: Mobile Home Park Investors
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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:
LinkedIn Group: Mobile Home Park Investors
www.mobilehomeparkinvestors.net
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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:
Deals on Wheels by Lonnie Scruggs
LinkedIn Group: Mobile Home Park Investors
www.mobilehomeparkinvestors.com
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