Hi everyone,
My partner and I are at a crossroads with a 40-lot park in a small North Indiana town(10k pop). We’ve held it for 3 years, finished the major value-add(infill to 98% and raised to market rents), and collections are strong. We’re debating whether to exit now or hold for a few more years.
The Good:
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Financials: 100% digital collections, <1% bad debt, strong market and low vacancy. Mostly TOH/RTO on public utilities. Current monthly CF about $7.5k after debts.
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The Environment: The park is safe—no crime or drug issues, which has made collections easy. 80%+ are local hispanic workers.
The Friction:
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The Management: We are remote (CA-based) and our local management is weak. Our on-site manager works a night shift and the only thing he can do is deliver notice or take photo. He lacks initiative and won’t proactively identify issues. He won’t even follow up on violations unless we push him, and he usually avoids conflict. This is already our 3RD manager and we could not find any better one.
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Rule Enforcement: Curb appeal is sliding. We have a “car guy” who constantly working on vehicles. Trash often all over ground near dumpsters or outside of trailers, many trailer’s skirting are broken, half of people never mow their lawns. Parking and summer parties have become a major headache. The manager won’t step up to enforce the lease.
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Infrastructure: Road are old, A lot of big trees remain a liability (3 fallen in three years and we already spent $20k+ cut and trim). Winter is a nightmare— a lot tenants won’t insulate or heat tape pipes or meters, leading to a constant cycle of frozen lines and broken meters.
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The Vendor: Local vendor pool are limited and we’ve been burned or deceived by several local vendor we’ve tried—plumbers, snow removal. We only have a solid electrician and tree guy. No reliable handyman and plumber for small repairs.
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We’re starting to see some friction from the city and neighbor regarding some code violations
The Dilemma: The P&L looks great on paper because of the steady collections, and we are making good amount of money. But we can see the physical asset degrading. We’re worried that holding for a few more years on “autopilot” will lead to major issues that will crush our exit valuation.
Questions:
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Exit or Stay? Is it better to sell while the numbers are clean, or is there a way to professionalize a 40-lot park so it doesn’t require constant owner intervention?
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Small-Scale Management: At this size, has anyone successfully moved away from "onsite guy” to a more reliable 3rd party setup? We both have full-time jobs so constantly management is not suitable for us.
Would appreciate any insights from those who have managed through similar remote-management headaches. Thanks.