Hey everyone,
Just wanted to drop a quick note to say hello and introduce myself. I have been following the discussions here for a while, and I am really excited to join this community of active MHP and MHC operators.
Coming from a background in financial analysis and auditing, I spend a lot of time buried in park underwriting models, capital expenditure projections, and asset-level returns. One thing that always fascinates me about manufactured housing, versus standard multifamily, is how heavily asset value is concentrated in the horizontal infrastructure (the concrete runner pads, asphalt paving, and underground water, sewer, and electrical mains) rather than traditional stick-built structures.
Because of that heavy infrastructure footprint, these assets behave totally differently when you factor in capital replacement schedules, capex budgeting, and tax/depreciation planning over a typical 5-to-7-year hold.
Curious for those of you actively buying or expanding parks right now: when you are putting together your acquisition models or mapping out heavy infrastructure upgrades, what has been your biggest blind spot or headache on the financial/modeling side?
Looking forward to learning from everyone here!
Kasing Ng, CPA
Hello and welcome to the forum.
idk if it’s really that different.
- When buying a community (if it ain’t a community it’s probably not going to be fun to manage) due diligence / discovery is a difficult process. You don’t know what you don’t know. Often the seller is not willing or able to describe the infrastructure as it was created decades ago.
- Pricing of replacements / repairs is difficult for a couple reasons. 1 above and 2 if you’re new to a market finding vendors that you trust and that trust you doesn’t happen overnight. We’ve had bids come in 3x what we did similar work for in last 6mo (we call this standard big city gouge). Getting multiple bids is usually the best approach.
- How much to change / replace v repair, this has much to do with what you want to or can do from a mkt rents perspective. If mkt is tight moving rents maybe simple and so making significant improvements sooner maybe be possible. If mkt is unknown, making repairs first v replacements upgrades maybe more prudent.
- If a new acquisition asset allocation on the sale is fundamental and may greatly affect the purchase price.
- A highly skilled legal / tax advisor is worth their weight in gold, don’t skimp in this area.
- A cost seg study ought to be considered if the depreciable assets are significant
Again, I’m not sure how these differ between flat infrastructure, RV’s, mobile homes, stick built homes…
Good luck to you.