Portfolio of 5 Mobile Home Parks
Ottawa, Peru, Earlville, Mendota, IL
In December 2018, the Keel Team and investment partners purchased a portfolio of five mobile home parks (222 lots) in Ottawa, Peru, Earlville and Mendota, Illinois.
Original Acquisition Price
December 18, 2018
Equity
Initial Cash Investment
Improvement
Summary
Through improvement initiatives such as: filling vacant pads, renovating run down homes, modest lot rent increases, billing back utilities, and others, we were able to improve the parks’ operations, increase NOI, and achieve a significant value increase. The financial results of these efforts are summarized below:
Debt
Collateral
Recourse debt for both partners.
Payout
Cash flow distribution
On June 2019, the first cash flow distribution was $54,029.37.
Capital
Cash out refinancing event
On August 22nd, 2021, the first refinancing event occurred.
Refinancing
Event
Investor Distributions
The partnership received $1,919,999.90 from the refinancing event. The new debt is non-recourse, CMBS debt.
10% Preferred Distributions Paid Monthly
Starting in Month 6
- June 2019: $54,029.37
- July 2020: $45,714.24
- October 2020: $45,714.24
- December 2020: $182,857.24
- September 2021: $101,260.25
- Total Preferred Distributions Paid to Investors: $429,575.36
Refinance Details
- Refi Closing Date: 8/22/2021
- Loan Amount: $5,200,000
- Spread: 10 Year Swap + 1.80%
- All-in-Rate: 3.25%
- Loan Term: 10 Years
- Interest Only Period: 10 Years
- Lender: Barclays Bank (CMBS)
Capital
Summary
- $429,575.36 - Preferred Distributions
- $1,919,999.90 - Cash Out Refinancing Distribution
- $2,349,575.26 - Total Distributions
- $1,600,000.00 - Initial Equity Investment
- $749,575.26 - Total Return on Capital
Timeframe
- 32 Months = 2.7 Years
ROI
- 17.35% - Annualized cash on cash ROI for the partnership
*And the LP investors stay in the deal after the refinance for infinite returns.
Future Potential ROI Opportunities
Infinite Returns
Infinite returns since all of the original equity investment has been returned, yet we still own the portfolio of MHP’s.
Refinance
Additional supplemental loan available 12 months after refi (possible additional future return per refinance loan terms).
Savings
Forced savings of approximately $2,800,000.00 due to the equity remaining in the property after the August 2021 refinancing event. (Based on the refinance appraisal values)
*Based on refinance appraisal values.
Appreciation
Additional potential equity appreciation as the MHP continues to increase in value with annual modest rent increases.
Interested in learning more?
Get in touch with us today to learn more about mobile home park investing!
LEGAL DISCLOSURE: All investment offerings have a high degree of risk. Results may vary. Past performance is not a guarantee of future success.
