We are putting together operating projections for our park turnaround project here in SC. We have about 53 spaces and 34 vacant. We will be bringing in single family mobiles and selling them on a lease/option.
Our original projections were to add about 1 unit a month for 3 years until the park was fully occupied. This number was based on the local real estate rental occupancy level being very high. The monthly sales payment + lot rent will be comparable to rentals in the area…But, after visiting the MOM (if you haven’t been, you must) I realize that this projection might be a little aggressive. Is there a good rule of thumb that I can use in my projections? Any other indicators that I can use to adjust my projections?
What is your buying power? For all those projections. What kind of a payment are you trying to make? Some call your plan slow death, but it shouldn’t be. Isn’t your park paying for itself already? How are your collections? What’s going to happen if you do nothing but pay expenses from collections for the next year? Find out where you are, and go after what you can get, but bankers ignore projections like we ignore park owned homes. If you have a lot rent increase due, take it, never a better time than now, if it’s due. Good luck, sounds like a beautiful problem! grin
This plan a slow death? I thought a slow death was adding like 1 a year or so, we want to add as many as possible as quick as possible and we were hoping to do around 8-12 per year. Is this a realistic projection?
Yes, the park does fully support itself right now and is up for an increase in lot rent. Although we do believe we’ll loose some initial bad apples, we expect to increase overall cash-flow and debt coverage ratio should be over 1.25.
I’m not sure what your question is here. Are you asking if 1/month is realistic? or fast enough?
Once you get your buying, setting and renting systems in place I would expect it to work very smoothly.
I’d also initially make the lot rent & trailer rent combined be about $50 lower than competing product in your rental market place. You can either offer an introductory rate or gradually increase the monthly payment on the trailer, or increase lot rent regularly.
I’d also scout around for people who were busy during the housing boom, got out before they got killed and still have credit. Sell them on the idea of bringing homes into your park by guaranteeing a return, or offering to service the lease/options for them. I’m thinking retired/out of work contractors, not Lonnie dealers. If you saw David Protiva’s talk at the MOM you’ll understand what I’m talking about.
to bring 12-15 homes into your Park in one year. Fred has brought in well over that and i know of an Owner here in FL that brought in 55 homes in 10 months.
The key to success here is to find the right contractors to do your work. to start you need a good set up crew, plumber,electrician, carpenter (stairs and decks). You should be able to get great rates moving this many homes in at once. You can buy electrical pedestals, skirting material, PVC pipe and fittings, and PT lumber in quantity and be able to get some quantity discounts here also. something I find helpful is to have a secure “lay down yard” to store material while setting up homes.
something that has to happen early on is to get all these folks working together. There also has to be contracts in place with time limits, and a process to quickly process and pay invoices. Maybe use the first unit as an office if there is not one in your Park. A phone line with answering machine and fax and computer would also be nice.
Getting a game plan in place before the first home is delivered makes good sense. You will be an expert after the 10th home is delivered,set,and complete.
We have broken down, delivered, reset 114 homes this year…with a 4 man set up crew, two toters, one bulldozer and a set up truck…
I am almost a neighbor up hear in Burlington, NC. We put 20 homes in our park this past 12 months. I could have sold more but I couldnt get them set up fast enough. Make sure you know how your local planning and inspection departments are to work with. Mine can be a real Bxxxch
All the post abve are loaded with great info. Make sure you can sell the homes you bring in. If you ever want to talk to me about how I placed 20 in my park over the last 12 months and plan on placing 20 more (if I can find them) next year please feel free to call me at 336 402-7572
Wow, this is an amazing source…thank you for all of your help.
My main concern is if the market will support the addition of 12 units a year. The park is run down and it is a low income small market of about 3500 population. The park was FULL about 7 years ago, so I feel it will eventually get there… Right now there is a lot of crime/drugs in the park, but is surrounded by a good area. My plan is to put a police officer in the park, change the parks appearance then start bringing in homes.
It would be fantastic if I could sell 20 a year!!! I’m just concerned with the time it will take to change peoples perceptions of the park and also the size of our market…it might not be feasible.
Anne made a good point though…if I can price it lower than the rentals, that would really give me a good competitive advantage in the marketplace.
My plans are to now change my projections to reflect the lower initial price and to keep aggressive with 12 units a year…and the more the better!!