Ep #62: How To Identify Unstable Income Sources on a Profit and Loss Statement and Avoid Overpaying for a Mobile Home Park

The Mobile Home Park Investing Podcast - Real Estate Investing Niche

Kevin Bupp

Passiveincome, Business, Mobilehomepark, Cashflow, Syndication, Investing, Realestate, Mobilehomeparkinvesting, Kevinbupp, Realestateinvesting

5 • 1.1K Ratings

🗓️ 13 April 2017

⏱️ 16 minutes

🔗️ Recording | iTunes | RSS

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Summary

Welcome to the Mobile Home Park Academy podcast. In this episode, Charles and I will discuss mistake number 17 from our popular eBook, “The 21 Biggest Mistakes Investors Make When purchasing their First Mobile Home Park…and how to avoid them.”

When you start looking at parks, you will begin to notice revenue items such as Late Fees, Application Fees, and Other Income. Brokers and sellers alike will try to tell you that it is appropriate to capitalize these income sources. I’m here to tell you that that is not necessarily the case!

One of the great things about owning mobile home parks is that your average lot renter is an extraordinarily stable tenant. So, how much money do you really think you’ll be getting from application fees year in and year out?

The same goes for late fees. It is true that you will receive late fee income through the year. However, this should not be a significant source of income for any park. If it is, you may need to ask yourself if this is truly a stable and reliable tenant base.

The “Other Income.” We’ve seen “other income” run as high as half the park’s revenue. Brokers and sellers will put whatever they can think of in this category. Single family homes, small apartments, self-storage, vending machines, laundry income, etc. For these items, we prefer to break out the separate income streams and evaluate the reliability of each separately. We also want to see the expenses broken out for each to determine if they are truly worth having. This gives us a complete picture of what we are buying rather than lumping it together in vagueness.

When looking at your next deal, add together these revenue items and multiply them by 10. The number you come up with is the amount you could potentially be overpaying if you don’t have a handle on these items.

Click Here to Grab a free copy of our latest book “The 21 Biggest Mistakes Investors Make When Purchasing their First Mobile Home Park…and how to avoid them

Want to Learn How to Invest in The Lucrative Niche of Mobile Home Parks? Check out our Free Training that Will Teach You The Systems and Processes We Use To Find The Most Profitable Deals. Click Here to Learn More
Have An Interest In Partnering with a Team with a Proven Track Record in the Mobile Home Park Space? Click HERE to Learn More About Our Partnership Opportunities.

Transcript

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0:00.0	Welcome to the podcast that will teach you how to successfully invest in and build steady
0:09.8	streams of passive income from the highly lucrative niche of mobile home park investing.
0:15.0	Veteran real estate investors Kevin Bupp and Charles D. Hart from Mobile Home Park Academy
0:20.0	will personally share with you the valuable lessons they've learned along their journey as mobile home park investors
0:25.8	so that you too can learn how to build massive cash flow and huge profits from this extremely lucrative niche.
0:33.6	So without further ado, let's welcome your hosts for today's show,
0:37.8	Kevin Bupp and Charles D. Hart.
0:39.7	Welcome guys and gals to the Mobile Home Park Academy's weekly podcast. I'm your host Kevin Bop
0:44.4	in just in case you're tuning in for the very first time I want to let you know
0:47.9	that today's episode is a little different from our normal weekly show but don't
0:52.1	you worry I'm still 100% positive
0:54.9	that you'll find a ton of value
0:56.5	if mobile Home Park investing
0:58.1	is what you came here to learn about.
1:00.1	You see, many, many, many, many, many, many months ago, actually a little bit more than a year
1:05.1	and a half ago, to be exact, Charles and I, we created 21 special release episodes
1:10.4	showcasing the 21 biggest mistakes that we see new investors make when entering
1:15.0	into the mobile home park business and our original intent was to release one
1:18.9	episode per week in addition to our normal weekly segment but But sadly, we got sidetracked and we only ever released the first seven shows.
1:27.0	In fact, you can actually go back and listen to these first seven mistakes by going and listening to episodes number two four six eight
1:34.4	ten twelve and fourteen on our podcast and I would actually suggest that you do that if
1:39.2	you haven't done so already and so as a special treat we're actually going to be posting two to three episodes each and every week until we get all 21 of them out.
	...

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