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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