Frequently  Asked Questions

Below are some commonly asked questions asked by potential and current investors. If any questions are not answered below, don't hesitate to get in touch with us HERE

In the 2017 Trump Tax Law, he allowed real estate owners to take 100% of the depreciation for infrastructure in year 1. For most properties (like single family or office buildings) this is only a few percent. However, mobile home parks can have up to 85% infrastructure allocation in some cases.

This temporary tax break expires in 2027 and currently is declining 20% every year from 2023 to 2027 until it goes back to zero.

As of 2024, investors can take 60% bonus depreciation on infrastructure in mobile home parks. This can be used against passive real estate income.

Every deal is different. However, we have a guaranteed minimum return that we make to investors: 

  • 15% annual IRR over 30 years
  • 50% accelerated bonus depreciation write off year one
  • Targeted return of capital: 72 months
  • Acquisition Period: 8-12 months
  • 5% cash flow annually until refi

The bottom line is we under promise and over deliver.

With our leading management strategies, lower overhead, and smaller deal sizes, we are able to provide a 2-3% higher IRR to the investor compared to other syndicators. 

Landon Capital Group also has an investor-focused strategy. We make sure that the investor gets all their money back before we touch any. 

See more about what makes us different on the About Page.

Ownership in the parks is split 70/30 in favor of the investor.

These are broken in class A shares (the investor) and class B shares (Landon Capital Group). The class A shares will have their initial investment fully paid back before the class B shares receive any money. 

What is great about mobile home parks is we can add value to them with controllable strategies. We do not rely on appreciation of the property value to make the deal work. The biggest way to increase the value of a mobile home park is filling vacancy and raising rents. Take for example the following:

Park 1:

  • Purchase Price: $455,000
  • Lots: 25
  • Rent: $275
  • Occupancy: 17/25

Park 2:

  • Purchase Price: $1,231,200
  • Lots: 30
  • Rent: $ 380
  • Occupancy: 27/30

In Park 1, you can calculate the value of the park by calculating the current annual rent ($56,100) and subtracting the estimated expenses ($19,635) and dividing it by an 8% cap rate which is industry standard. This gives you a value of $455,000. 

By raising rents to $400 and bringing in 8 homes that have paying tenants, it brings the value to $1,200,000. The new annual rent is ($120,000) and expenses (42,000) and dividing it by a 6.5% cap rate which is the standard for a stabilized property. This is what bring the new value to $1,200,000.

This means a profit of $745,000 on an investment of $136,500 in 5 years! (assuming a 30% down payment)

With the Park 2 example, it may seem like the more stabilized property and safer bet. However, there is not much to value add on the property. The current price is $1,231,200 and if you fill in all the vacancy and raise rents to $400 is brings the new valuation to $1,550,769. 

This means a profit of $319,569 on an investment of $369,360 in 5 years. 

(assuming a 30% down payment)

While this is a great investment, the majority of the profits from mobile home parks come from buying and fixing value-add potential properties. With the right team, filing up homes and raising rents to market can be easily implemented.

Other ways to increase value in a mobile home park:

  • Paving Roads
  • New landscaping
  • New signs and frontage
  • Cutting expenses
  • Cleaning and rehabbing vacant lots
  • Removing abandoned homes
  • Enforcing rules
  • Providing amenities
  • Playgrounds/grills/picnic areas

If you are interested in investing or learning more about mobile home parks, feel free to fill out a contact form!

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