On this episode of the Mobile Home Park Lawyer Podcast, Ferd goes through two simple properties with routine months as a continuation of the previous episode. Enjoy!
0:00 – Intro
0:55 – Ferd starts on the Profit and Loss of a small 18-unit park, and explains all of the income and expenses
3:25 – Ferd goes through a second property and again describes the profit and loss, also explaining how the water set up
4:53 – Ferd gives this property a 10-cap based on the month analyzed
Ferd Neimann: Welcome back MHP nation. Here we’ve got a part one of two. We actually just recorded part two first, but it was really complicated on how Rent Manager works, so today I’m going to jump real quick here and do a really simple property. You may want to watch the other one first, because I’m going to go much faster here, but my team just said slow down on this one. So here we go; profit and loss I’m going to do Canton View and Quincy View. These two are kind of sister properties.
October, Separate by Properties, Review Report. Way simpler, this is a small 18-unit park. Rental income 5504, it has low lot rent too, $100-$200. Pet fees, late fees, total rent, resident prepay is covered. Manager fees expense is $675. In this property, we charge $675 management fee to fixed fee, plus we get bonuses for new leases or new infill. But there are currently none of those this month. Miscellaneous repair- we dig into that, what were the repairs? APM, remodeling, and supplies, reimbursing APM for the labor and supplies.
This was deposited in checking, I’m not sure that’s supposed to be there, deposit 2203… Return on CV for Canton View furnace filter. Ok, so we’ve made a return of something; furnace filters. Here we go, $157, reimbursement for keys, for one of our park greeters. Okay, it make sense? EPay processing fees is minus $64. I don’t know why we got money back from these folks.
Oh, that was the reimbursement from the residents, but most have paid the leases in Zago. What do we call it? The cash pay program, it’s basically an affiliate for Rent Manager. And then for application fee, we get reimbursed for that, $200 for application fees, so somewhere we should have gotten reimbursed, we typically do the application online. So Kristen, why are they here? Is this paper applications for some reason?
Kristen: This is a unique experience. We had a…
Ferd Neimann: Oh, I forgot yeah. I remember now.
Kristen: We had a property that came up after we had it rented in 2 days. The problem about applying online, and anyone can apply anytime. But the cons are, you know, we could… we had 2 separate people, families applying for the home, we first come first serve. So we didn’t want to put a bad taste in the mouth for the person who applied and they were 2nd line. So we went ahead and refunded their application fee.
Ferd Neimann: Got it, makes sense. Ok, so that one is pretty simple. So looking at why, there’s no debt on the park. Income is $5,357, expensive working $1,412, there is no net operating mortgagers expense, so it is just net income, which is also the operating income- $4,944 for this month.
Quincy View, another small property, 18 pads, rental income, pet fees, water… so we do… this one does it, the other one Canton View there is no water sewer, that is the Holy Grail, direct bill water sewer.
So Canton View have directly the water sewers and no expense, that’s awesome. Quincy view, we do have water-sewer bill back through our sub-meter process. Manager’s fee is $600 on the steel. Miscellaneous repair expense, we have monthly trash. We actually pay for the trash in this one also, like most parks, can be going through that. So we have a monthly expense there for the trash. And then we have the mileage reimbursement, this is likely to be my dad or one of our personnel who does go visit the site, we get reimbursed by I think 58 cents a mile this year. And then more processing fees, this park also has no mortgage payment.
So revenue of $6,778 minus expenses of $1,248, so just basic math, and this was a routine month it which pretty much is $5,530 is the NOI times 12. This is an 18-pad park in a lagoon, so I’m going to give it the worst cap rate, I’m going to give it a 10 cap at $653,000. You could say the value is a 10 cap based on this month, which you know is pretty accurate, I think. So that’s a couple of simple ones. I’m going to stop the recording, then get more into the weeds with the rest of our team here. But there’s a complicated one on Belton, here’s 2 smaller ones that are quite simple from our recording
This process that was live, that was how long it takes, really all of them, so very simple and we do this with dozens of accounts, so some of them are simple, some of them are certainly not. Till next time, God bless.