Help Needed Planning a Turnaround Park - understanding Future Value?

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Hi Folks

I have always appreciated and enjoyed this forum. Thanks to All who are responsible.

Novice MHP investor. I have two small MHPs in the Southeast. One I bought as an full, operating MHP and it is and has always been a decent money maker. 4 years left on my note and it more than pays for it with a $1,000 left over each month.

The other I bought 4 years ago at an auction and it was completely vacant and empty - and has remained that way for the last 4 years. It is a 7 acre, 40 lot MHP with a nice brick ranch as well (for the manager in the past). I have had this park under contract at least 3 times and - because it is directly beside/contiguous with the military base, Fort Bragg, the Army jerked me around for a year with surveyors, environmental studies, etc… and were going to buy it - but the Obama got in office. Nuff said.

Here’s where I am - I am a environmental contractor by trade - not an investor - and have a hard time wrapping my head around the math.

I am now committed to getting this damn park either sold - or turned around to at least make money - which, will then help with the selling.

Steps I have taken over the last 45 days:

  1. Complete cleanup of the MHP. All but one of the 40 mobile homes (1960, 70’s vintage) have been demolished and removed.

  2. I am taking down roughly 80 large pine trees (2’ diameter +/-) that will really open up the parcel and making visually more pleasing (plus landscaping easier)

  3. I have grubbed down all undergrowth, bushes, etc. that has grown up over the last 4 years. It really looks significantly better.

  4. I am meeting with both the County inspector for water lines, several contractors, etc this coming week to discuss what’s involved in replacing all water lines (to PVC) in the MHP. The park had wells when I bought it, but is also on the Town’s water system. So, I would be looking at replacing from the main meter to each lot. (rough budget I got from local plumber was $24,000 for labor and materials).

  5. It is on septic tanks (about 4 - 5 trailers per tank) and, three of the eight of them have been repaired. My onsite handyman has significant experience with repairing/replacing these and he will handling much of that (as needed - just unknown right now).

The county man - in charge of septic tanks - has inspected, performed borings/perc tests, etc… and basically has come up with this:

  • there are 24 lots capable of getting houses placed on them right now and ready to go. The other 16 lots are serviced by a few tanks that need repairs and - need a drain field installed for them. (Not sure of costs but he (and my handyman) indicarted not a big deal - less than $5,000 total).

I want to (NEED TO) go to the bank ( or find private lenders) which has my loan on this MHP (and my other one) - and “Refi”?? or ask for $ to help with this renovation.

How do I figure out the math - the return on my investment - etc… if I move in 2, 3 or 4 Repo homes a month?? I mean,

I know some of the $ #'s roughly, I know what I can reasonably get homes for here in NC (repo’s or otherwise) and what it cost to fix up. I just can’t layout it out on some spreadsheet to take to my banker and show it is (or isnt a wise idea).

The other imperative info for this area and my MHP:

  1. Lot Rent: $110 for lower end MHPs. I would really think - once dressed up - I could get $140/month

  2. POH’s rent for $550/month in this area (1995’s 3BR Singlewides), with the tenant paying for gas, water, etc (I plan on selling all my POH’s once setup)

  3. My monthly bank note is $1800/month plus $100/month in insurance I pay, plus $300/month in taxes I pay) That’s it.

THe bank note by the way is 6.75% and has 5 years left on it with no balloon payment or anything.

  1. I can (and have just recently hence the one trailer now on site) - locate 1990 and newer, decent singlewides for $3-6K quite frequently. I am pretty resourceful and have even found them for free (like the one I just moved onsite - and in very good shape). IT cost me $1800 to move it and set it up. That doesn’t include underpinning, a deck or steps, or the plumbing/electrical connections. (Estimating another $2,500 each)

  2. The power company recently upgraded all over head lines and distribution poles, but, due to the age of the previous poles, I have to replace all meter boxes. I have pricing for that at $900 per lot - which includes: setting pole, new meter base, running underground line and hooking the home up as well.

I guess my goal is to see if it’s worth to “Go For It” finally on this one - and that, I will see a ROI before I am 80?? (I am 42) :slight_smile:

Or better yet, see a return in terms of the Sales Price I could get after getting even a few houses in place and showing the potential??

I bought it for $215,000 (6.75% note on $150K loan). I now owe $88,000 on it. So, I have roughly $140,000 in the property. The tax value for if it matters is $350,000.

So - for summary - how do I figure out ROI over time, fixing up say 2 or 3 lots per month, at cost of $12,000 per lot (electrical, water lines, repo trailer, etc) - and I would intend on selling each of these POH’s once setup ($2,000 down, 11% interest rate over 5 years etc…).

Any HELP would be appreciated!!!

THanks - Dazed and Confused