Landon Capital Group announces purchase of 57-unit Mobile Home Park outside Waterloo, Iowa.
10/22/2024
We are glad to announce that we have officially closed on our newest opportunity in Waterloo, Iowa. At the time of purchase, the average lot rents in the community are $321 including water/sewer/trash per month and being 78% occupied.
The seller was a typical mom-and-pop local owner who has owned the park since 2004. Since then, rents have barely been raised, roads have gone unrepaired, and most of the residents still pay via cash and check. The rent rolls and P&Ls were even kept on pen and paper!
During our due diligence period, we called all of the mobile home parks in a 30 miles radius and determined the average lot rent in the Waterloo MSA to be $463 without water, sewer, and trash. The highest being $539 per month and the lowest being $405. The average Iowa resident spends $60 per month on water/sewer and the trash bill per unit is $20.70 per home. So, the apples to apples comparison would be $543 average lot rents with ours being at $321. This leave tremendous upside with rent increases.
We are also accounting for the following repairs upon closing:
Roads: current roads have not had any repairs in years and we are planning on putting a new 2.5 inch layer across the whole park in week 1 (after photos coming soon).
Playground: We are planning on putting a playground area as a community amenity in the common area of the community:
Signage: New signage is a must for any community we purchase. We have to change the sign to reflect new ownership anyway. So, we might as well make it nice (photo coming soon)!
New home Installation: We plan on bringing in 10-12 new homes to the community to make the park look newer and also provide affordable home ownership to the area (more notes on this below).
With a new 3/2 manufactured home costing $77,999 for aspiring residents, a applicant with a 625 credit score can expect to pay $1,099 a month to purchase the home with only 5% down. This includes their lot rent, mortgage, insurance, property tax, water, sewer, and trash!
The cheapest house for rent in a 5-6 mile radius around the park is $1,600 and the average is closer to $1,800 per month. The city of Raymond (which this park is closest to) has an average home price of $240,000. With current interest rates, you would need to pay $1,700+ for an average home and that’s with $20% ($48k) down.
With all of these repairs, we can refinance the property and return investor capital within 3-5 years and possibly return 200% of investor capital with the right steps.
Overall, this is a great opportunity and I would like to thank everyone who made it possible.
Below you can watch a quick promo video of the property:
Stay tuned for more updates on the property on our Instagram and Facebook!
If you are interested in learning more about mobile home park investing, feel free to reach out to us.
