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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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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

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