To tag onto Franks post of Capital intensive, my park is a major turnaround, but with huge upside. It’s not actually that far from the Orlando boot camp, I’ll probably go to the bootcamp for at least a couple of days.
I paid nothing for the homes, but they still cost me money, a lot of money. I’m spending an average of about $4,500 - $5,000 so far for home rehabs per home, and we’re doing the easiest ones first. Now we’re selling the homes for an average of over $8,000, the highest so far is $10,000. We are increasing prices as the park improves and the reputation of the park improves.
So great, I’m making a killing right? No - I’m getting an average of $1,500 to $2,000 down on a rent credit, so I’m in the hole about $3,500 per home from the outset.
Now $3,500 X 70 homes, you do the math, it takes a lot of capital even when the homes are “free”.
Why an I doing it? Because using conservative math, I’ll increase the value of the park over $1,500,000 over the next 3 years, and up to $2M in 5 years. The other reasons are 1. The demand in this area is absolutely outstanding, we have several homes sold that we haven’t even started to rehab yet. We just show them the end product and they buy from us, even though the park down the street is giving homes away for $2,000. Yes, even “trailer park people” can recognize and appreciate value vs price. 2. It’s Florida, finding opportunities like this isn’t every day, although I’m 4 for 4 in buying low and doubling my money down here, it CAN be done. The other properties were duplexes and condos.
When people complain about our price being 4X the parks just a couple of blocks away, we tell them fine, go down there and check it out, they come back. But we turn away most applicants, fortunately we can afford to be very choosy with the unreal demand we have.
Frank runs a very grueling schedule at the camps, but if there’s time I’d be happy to show anyone my park as well. It’s about a 50 minute drive is the only issue.