Introduction
In the picturesque town of Ludington, Michigan, an inspiring tale of revitalization and financial success emerged when the Keel Team and their investment partners acquired a mobile home park in May 2021. This syndicate underscores the powerful blend of strategic mobile home park investing, community enhancement, and effective management in revitalizing mobile home communities, offering significant financial gains for investors.
Acquisition Insights and Strategic Approach
During uncertain economic times, the Keel Team, alongside their investment partners, began enhancing a mobile home park in Ludington, Michigan. They invested $2,086,500.00 to kickstart a comprehensive improvement plan aimed at boosting the property’s value.
The partnership started with an initial equity investment of $1,200,000.00. Importantly, the general partners took on the recourse debt, shielding limited partner investors from direct financial risk. This strategic financial arrangement facilitated a project aimed at improving living standards for the community while ensuring favorable returns for investors.
Enhancement Efforts and Financial Achievements
The Keel Team’s value-add strategy was meticulously designed to encompass infilling vacant lots, addressing deferred maintenance and renovating deteriorated mobile homes, as well as implementing modest lot rent increases, and more. These concerted efforts significantly uplifted the portfolio’s operations and net operating income (NOI), leading to a noteworthy enhancement in property value.
The fruition of these strategies was evident in the quarterly preferred distributions paid to investors starting November 2021, totaling $272,209.69. This steady cash flow underscored the effectiveness of the improvement initiatives in fostering financial growth.
Check out the Ludington Mobile Home Park Case Study, where you will be able to see an in-depth overview of the investment’s performance!
A Defining Refinancing Milestone
February 2024 marked a pivotal moment in this investment journey with a cash-out refinancing event that yielded extra proceeds of $1,258,666.74 for the partnership. This refinancing, facilitated through non-recourse, Freddie Mac agency debt, was a testament to the substantial increase in property value achieved through diligent improvement and management efforts.
Impressive Returns and Future Prospects
Over a span of 33 months, or roughly 2.7 years, they were able to return ALL investor capital (and some). This achievement not only reflects a substantial return on the initial capital but also sets the stage for potentially infinite returns, as investors continue to be part of the deal post-refinance with their initial equity fully returned.
Moreover, the potential for additional supplemental loans and the “forced savings” from the equity remaining in the property post-refinance, estimated at approximately $3,084,000.00, alongside the ongoing possibility for equity appreciation, allows for further financial opportunities.
Conclusion
The Ludington Mobile Home Park project stands as a beacon of the potential in mobile home park investing. Through thoughtful investments, community enhancements, and adept financial management, the Keel Team and their partners have not only contributed to addressing the affordable housing need but have also realized significant financial rewards for their investors.
Get in touch using the contact details below to learn more about our investment approach and strategy. Interested in learning more about passive mobile home park investing as a limited partner? Check out our FREE eBook on the “10 Things to Review When Considering a Passive Mobile Home Park Investment” by Andrew Keel
Learn more about mobile home park investing.
Interested in learning more about mobile home park investing? Get in touch with us today to find out more.
Disclaimer:
The information provided is for informational purposes only and should not be considered investment advice, nor a guarantee of any kind. There are no guarantees of profitability, and all investment decisions should be made based on individual research and consultation with registered financial and legal professionals. We are not registered financial or legal professionals and do not provide personalized investment recommendations.
Tristan Hunter - Investor Relations
Tristan manages Investor Relations at Keel Team Real Estate Investment. Keel Team actively syndicates mobile home park investments, with a focus on buying value add, mom & pop owned trailer parks and making them shine again. Tristan is passionate about the mobile home park asset class; with a focus on affordable housing and sustainability.