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Investor and Author pg. 24
The first move we made was to
“zonedown” the properties to create
immediate higher occupancy. We
zoned the larger park down to 132
spaces by creating one lot from two
spaces. We did the same with the
smaller park going form 84 spaces to
60. Existing residents loved the larger
lots, but our goal was to get it
prepared for financing, which means
we need a minimum of 65% physical
occupancy (actual homes on lots) at
both parks. The “zoningdown”
process took us approximately 4
months to accomplish with a total
cost less than $20,000. Less density
is almost always well received by
local municipalities.
Many investors ask me why I
would “zonedown” a park instead of
simply filling it up with a repo home.
Although we added 5 repo homes to
each park, this process
is time consuming and expensive. A
typical repo home will cost you
$15,000 — $20,000 to purchase,
move, setup, and rehab. “Zoning
down” parks is a much cheaper way
to get occupancy up immediately.
Once we zoned the park down, we
executed our “rehab playbook” to
perfection with the following steps:
1. Repaved the roads – cost
$79,000
2. Trimmed many trees – cost
$21,000
3. Rehabbed 22 existing homes and
sold them to residents – net cost
$88,500
4. Added 5 repo homes at each
park – cost $180,500
which cost $111,625. A little bonus at
the larger park is that 8 owners of
nice RV’s are leasing lots form us in
the back of the park.
Total rehab costs for this deal were
right under $500,000. I was fortunate
to use a bank line of credit for half of
the rehab. Our total cost into the two
parks is $1,650,000. We now have
126 residents combined from both
parks (up from 89 a year ago when
we took over). We will add 610
more repo’s in the Spring to get to
70% occupancy. We just had the
parks appraised and the valuation was
$3,225,500. We will get all of our
original capital and rehab funds back
upon a refinance this Spring. More
important, the parks have been
positive cash flow from day one (I
can’t stress the fact enough that you
never buy a negative cash flow
property) and the monthly net cash
flow (after all expenses and mortgage
payments) now exceeds
$15,000/month. You can see a
positive article about our project
written by the local newspaper on our
website, just go to:
www.acgmhc.com ♦
Mike Conlon is the founder and majority owner of
Affordable Communities Group, LLC based in
Cary, NC. He is also the author of Unconventional
Wealth: The New Mainstreet Millionaires that is
available through Amazon
The additional cost in this project
was the teardown of 101 homes,
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