Illinois Hard Money Deal - Close

550

None

Illinois

This is an under-performing mobile home park with 21 of the available 59 pads rented. Demographically, the park is in within city limits of a small town, across from a Golf course. There are marketing opportunists to work with the course to bring in quality retired tenets.. The town has 2 cities with super Walmarts within 15 min drive, which is the rural gold standard for viable markets. It has been on the market for an extended amount of time due to the owner not having the water individually metered for the current mobile homes, this adversely affected all the investment numbers, and his profit.

He recently paid to have the currently occupied pads set up for individual metering. This changes his net income going forward. The cost of the work is $2608 per pad. The total number of pads that were metered by the current owner is 23.

I have tax information that will show the utility bill of the previous year as $22,731. This expense is negated going forward now that the metering is complete on occupied pads.

I would like the loan to cover the purchase of the park ($270K) and enough money to add metering to 10 additional spots that I am going to prioritize the finding of tenets. This would cost $26,086.

I plan to update and properly market the park to get to above 85% occupancy within 18 months, roughly 50 units. This will take the current gross income from 5100 to 12,200. This will be done through online and traditional marketing to get quality tenets. Additionally, working with Lonnie dealers through sites like mobilehomepark.com. Lonnie Dealers fix and flip mobile homes, and sell them through owner financing, working with park owners to place the mobile homes.

The only obstacle to growth is the water meters on the remaining units. The additional funds requested will allow for the next 10 units to bring the income to 7100 a month. At that point, I can start to reinvest income into adding water meters to additional pads myself.

Once I have the park to 50+ units being occupied, I will do a more conventional refinance based on the updated NOI. The net income annually would be 119,200. Estimated value after the work is complete would be $1,071,000 based on a 10 cap at 85%
occupancy, and allowing for a 10% increase in expenses. I am already in contract. Property in Sandoval, IL. Loan term 18-24 months.