Mobile Home Park
Memphis, TN - MSA
In June 2018, the Keel Team and investment partners purchased a 61 lot mobile home park outside of Memphis, TN.
Original Acquisition Price
June 14, 2018
Equity
Initial Cash Investment
Capital Call
On Month 13 Of Ownership
Improvement
Summary
Through improvement initiatives such as: filling vacant pads, bringing in new homes, removing run down homes, converting utility payment from park paid to tenant paid, modest lot rent increases, and others, we were able to improve the park 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
The total cash flow distribution was $66,229.24.
Capital
Cash out refinancing event
On April 24th, 2020 the first refinancing event occurred.
Refinancing
Event
Investor Distributions
Investors received $845,564.76 from the refinancing event.
Preferred Distributions
Paid Monthly
- July 2018: $3,010.42
- August 2018: $3,010.42
- September 2018: $3,010.42
- October 2018: $3,010.42
- November 2018: $3,010.42
- December 2018: $3,010.42
- January 2019: $3,010.42
- February 2019: $3,010.42
- March 2019: $3,010.42
- April 2019: $3,010.42
- May 2019: $3,010.42
- June 2019: $3,010.42
-
July 2019: $3,010.42
(Additional $60K capital call, no preferred interest paid on this as both partners put in 50%) - August 2019: $3,010.42
- September 2019: $3,010.42
- October 2019: $3,010.42
- November 2019: $3,010.42
- December 2019: $3,010.42
- January 2020: $3,010.42
- February 2020: $3,010.42
- March 2020: $3,010.42
- April 2020: $3,010.42
Total
Payout
Preferred Distributions
The partnership received $66,229.24 from the preferred distributions. The new debt is non-recourse. Fannie Mae, 3 years of interest only, 30 year amortization, 3.73% interest rate, 10 year term, 75% loan to value.
Capital
Summary
- $66,229.24 - Preferred distributions
- $845,564.76 - Cash out refinancing distribution
- $911,794.00 - Total distributions
- $421,250.00 - Equity investment ($361,250 + $60,000)
- $490,544 - Total return on capital
Timeframe
- 22 Months = 1.83 Years
ROI
- 63.52% - Annualized cash on cash ROI
*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 MHP.
Savings
Forced savings of approximately $443,750 due to the equity remaining in the property after the April 2020 refinancing event.
*Based on refinance appraisal values.
Appreciation
Additional potential equity appreciation as the MHP continues to increase in value.
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.
