Friday, June 30, 2017

Massachusetts Invests $20M Towards Housing Project

The 92-year-old Central Building on Main Street in Worcester, Massachusetts is in the process of being redeveloped from an office building into 55 housing units. Because the complex is planned to include "workforce housing", the state is providing $19.8M in investments and tax credits towards the project!

 “The redevelopment of the Central Building will bring new housing to Worcester’s downtown and complement the city’s ongoing efforts to revitalize Main Street,” says Housing and Commuity Development Chrystal Kornegay.

Click Here to Read the Full Article!

Monday, June 26, 2017

Mobile Home Park News: June 2017

Michigan Manufactured Housing Community Financing Provided by Capital One - $15.3M Loan

Country Acres Village, a 55+ community comprised of 320 spaces, is in Kalamazoo, Michigan and closed this month with an acquisition loan of $15.3M provide by Damon Reed of Capital One. Amenities include a recreation building, fitness center and an indoor pool and spa. The loan was fixed on a 30-year amortization schedule with a balloon at 10 years.

Affordable Housing Surge in Result of Trump’s Reaffirmation of Commitment to Working Class

Of the top performing real estate sectors of 2017, Manufactured Housing proves to be of the best. Up 20% year-to-date and up 100%+ over the past three years.

Residents of Manufactured Housing and RV Communities are typically blue-collar workers in rural areas; this group is seeing a tremendous amount growth in economic confidence since Trump was elected. This renewed economic confidence is resulting in better new home sales and a willingness to own as opposed to renting: very promising with an increasing desire to own a home and REIT’s high returns on operating primarily tenant-owned communities.

Tennessee Mobile Home Park Planning New Condo Development

A community in East Nashville, located off Meridian Street, is set to redevelop and construct over 150 new units on the existing property. Rochford Realty Group and Construction Company currently has the park under contract.

The plan includes 108 condo flats, 44 townhomes and 6 duplexes as has the flats pricing at $170,000 off the bat. However, the new development forces the current residents to move…

Residents of a Kalispell Community Purchase Park

There are only 202 mobile home parks in the United States that are completely owned by the residents that reside within. This month, Morning Star Community Homes was purchased for $1.55M, making this park the second resident-owned community in Kalispell. The property consists of 41 mobile homes and is found next to Green Acres, the first resident-owned community in Kalispell, directly on Woodland Drive.

Thursday, June 1, 2017

3 Ways to Increase the Value of Your Manufactured Housing Community

There are many actions that you as a property owner could take to increase the value of your rental property. Common manners many choose is to raise the rent rates or occupancy, both causing a higher gross return. Another is to decrease operating expenses, allowing the net income to rise. Generally speaking, these are the most frequently seen strategies in the manufactured housing industry today, however they are NOT the only options you have to expand your community’s worth.

One idea that could save you some money in the future is to ensure you have a clause in your leases that permit a pass-through of increases in real estate taxes. As your property’s value increases, your real estate taxes will most likely rise as well. What this small lease clause would allow you to do is raise the rents in the community to make up for the increase in taxes. Even many jurisdictions with rent control measures let property owners pass through taxes and other governmental assessments through rental increases.

From a lender’s perspective, this one is pretty big, but it’s also a little confusing. Homes owned by the community (or you) come with both equity and the liability of higher expenses (read this Bigger Pockets Article for more clarification). Because of this, there’s some tricky math involved with helping lenders figure out the value of a community. If your community has park-owned homes, then you’re going to want to account for lot rent and the park-owned home charge separately. What this means is, if your lot rent is $200 and you have a community-owned mobile rented at $500, when you collect that money, $200 should be accounted as lot rent and $300 accounted as a park-owned home charge. Why is this important? Because lenders are frequently cornered to underwrite rents supported by the rent roll. If you didn’t show $200 going towards the pad rent, it’s likely the entire $500 be scratched from the operating income and thus devaluing the property.

Now if you aren’t able to count park-owned home income, it makes sense that expenses revolved around cleaning, repairing, maintaining or renovating community-owned homes not be counted towards the NOI as well. So as a result, some of the expense for payroll or repairs & maintenance and even materials are reduced from the operating expenses (counted as non-operating), and therefore the underwritten value of the property is increased!

Now these are only a few strategies to increase the value of your manufactured housing community and still don’t provide a full picture of how lenders evaluate mobile home parks, but it’s definitely a step in the right direction to add value to your rental property.

To read the original article, Click Here.