Insight
Lilly: Mobile home park investors should earn at least 20% cash-on-cash returns
“Basically in this business, if you're not earning 20% on your money, you're doing something radically wrong.”
Assertion Not checkable as stated
Lilly: Park Street Partners has mobile home deals generating over 40% cash-on-cash
“We've got a couple deals that are doing over 40% cash on cash.”
Insight
Lilly: Value mobile home parks by multiplying monthly lot rent by 84
“Another way to look at it, if there's funny business going on with the P&L, just look at what the park earns per month, and multiply by about 84.”
Insight
Lilly: Mobile home land has 30% expense ratio versus 70% for homes
“And then in this business, the land business, probably you're going to have, let's just say, 30% in expenses. Being in the house business is the inverse. It's more like 70% expenses.”
Insight
Lilly: Midwest mobile home parks generally trade at roughly a 10 cap
“Well, yeah, I would say for the Midwest, probably a 10 cap, just multiply the NOI by 10.”
Insight
Lilly: Leveraged 10-cap mobile home parks yield roughly 16% cash-on-cash initially
“A 10 cap with leverage means you're earning About 16% cash on cash before you do anything. If you don't improve it, you start with 16% cash.”
Assertion Supported
Lilly: Mobile home parks yielded 300-400 bps more than traditional apartments
“I came across mobile home parks that were this quirky little, you know, one out of every hundred multifamily listings that I'd see online would be a mobile home park yielding Like three, 400 basis points more than apartments.”
Disclosure
Lilly bought his first mobile home park for $450K with 19% down
“Oh, it was about 450,000, and I got a Bank to lend me 81% of that, so I only had to put down 19%.”
Disclosure
Lilly: First mobile home park yielded 25% to 30% initial cash-on-cash
“So again, I paid four 50, the property was earning 45,000, but I did buy it with debt, so leverage, you know, worked in my favor. So, you know, for putting, I don't recall exactly, for putting the 86 down, I was probably cash flowing at least 20, 20 something …”
Disclosure
Lilly: Infill mobile homes cost $20K and rent for $550 to $600/month
“Five grand to fix it up roughly, and five grand or so to move it. So, you know, all in, I had something like 20 grand in each house, and was then putting them on rent to own agreements. Folks would be paying. Roughly five 50 a month, maybe 600.”
Insight
Lilly: Mobile home park rent is 30% expenses, 35% mortgage, 35% profit
“Yeah, so for every dollar in rent, yeah, that I collect, I Keep 70 cents. Well, to then pay the mortgage, and then once I've paid the mortgage, then, which usually eats up half, then, you know, roughly the remaining half of that goes into my pocket.”
Disclosure
Lilly: Park Street Partners GPs personally guarantee 85% of their fund's debt
“Plus we sign personally so far have been signing personally on most of our debt, about 85% of it. So we're putting up personal guarantees backed by our houses, cars, our net worth.”
Disclosure
Lilly: Two Oklahoma City mobile home parks generate over $100K annual cashflow
“Those two properties I've got entirely on my own in the Oklahoma city area. Those are a little over a 100,000 in cash flow to me every year. That's less than a hundred lots that I've got between those two properties.”
