I just read Frank’s email titled “The Mobile Home Park That Finally Enticed Us Into Buying In Florida.” Can anyone (Frank?) tell me where the park is, or it’s name? Even better for assessing the market would be details of the deal.
Thanks, Brandon I appreciate Frank’s willingness to share details.
It looks like a great park but I do have a question - In the past the coastal areas susceptible to hurricanes were avoided so how were you able to get comfortable with that risk?
The park is roughly seven miles inland from the bay, and has fared well in prior hurricanes without significant damage. In addition, we have it extensively insured. It’s the same process we used on our parks in Charleston, South Carolina. The areas near the ocean are typically destroyed by the storm surge, but inland the effect is more like a strong thunderstorm with less than 100 mph winds. Hurricane Hermine passed through this area in September of this year, and there was no damage to the park, despite winds over 80 mph.
Thanks for the help Frank.
The Mobile Home Park That Finally Enticed Us Into Buying In Florida." Can you all post the email about that park?
Here are the contents of that email:
We’ve been buying mobile home parks for over 20 years – but never in Florida. Sure, we’ve seen deals in Florida on a continual basis. But Florida parks frequently have extremely high prices and often difficult issues such as private utilities or master-metered electricity, in addition to a large number of RVs or even weekly rentals. But in 2016 we purchased our first Florida mobile home park. Here’s why we bought it:
- It has city water and sewer, which are directly billed by the city itself to each lot.
- It is a pure mobile home park, with no RVs or weekly rentals.
- It has 137 lots with 78 occupied, which gives us upside in renting 59 lots.
- It has lot rents of $363 per month, which we have raised to $393 on current residents, and which can be raised to $465 per month over time.
- All new residents will be paying $465 per month (which is closer to the market rent)
Here’s how the numbers work out. At the price we paid, we bought it at around a 7% cap rate. But between filling lots and raising rents to market, the cap rate will rise to around 15%. And this is on a senior community that has an attractive appearance. That should increase the value of the park by around 100% -- and we think we can complete the project in less than three years.
If you want to learn how to identify, evaluate, negotiate, perform due diligence on, re-negotiate, finance, turn-around and operate mobile home parks in Florida or the other 48 states (there are no mobile home parks in Hawaii) then consider attending our Mobile Home Park Investor’s Boot Camp in Orlando, Florida on January 13th, 14th and 15th. It’s an immersion weekend that is taught – both in the classroom and in the field inside real mobile home parks -- by Frank Rolfe who, with his partner Dave Reynolds, is the 5th largest owner of mobile home parks in the U.S. with over 250 mobile home parks in 28 states.
Affordable housing is one of the biggest challenges in U.S. real estate – and one of the biggest opportunities. Learn more about the investing options in this unique sector.
To reserve a ticket for the Mobile Home Park Investor's Boot Camp in Orlando, FL on January 13th-15th 2017, Click Here or call us at (855) 879-2738.
Here’s three more thoughts on risk management in Florida/ Gulf Coast parks:
- Historically, they’ve done better in Hurricanes than you’d think. Homes built after the mid-90’s have done even better. There are hundreds of parks that are 30 plus years old in FL that have never suffered major hurricane damage;
- You can reasonably / economically insure your homes, buildings, and income against wind damage/destruction; and
- You can NOT reasonably / economically insure your homes, buildings, or income against flood damage/destruction - so know your elevations and your local hurricane storm surge history before you buy.
Welcome to the Sunshine State! Come on in, the water’s fine!
Brandon, I have gotten some interest in touring my park. If you need another park, it’d be a good one to tour as it’s a true turnaround. Just contact me. I may be interested in attending just to hear about his FL park. It’s located at 914 Clearlake Rd, Cocoa, FL. You can look it up to determine drive distance.
Thanks for the offer! Unfortunately it would be a little to far out of the way from the other properties we are visiting. Get in touch with me via email and we can get you signed for the class.
-Brandon