MHP #855: How To Identify Unstable Income Sources on a Profit & Loss Statement, Avoid Overpaying for a Mobile Home Park
Real Estate Investing for Cash Flow with Kevin Bupp
Kevin Bupp
4.9 • 675 Ratings
🗓️ 5 February 2025
⏱️ 12 minutes
🧾️ Download transcript
Summary
Today's episode is from Mobile Home Park #67.
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.
Recommended Resources:
- Accredited Investors, you’re invited to Join the Cashflow Investor Club to learn how you can partner with Kevin Bupp on current and upcoming opportunities to create passive cash flow and build wealth. Join the Club!
- If you’re a high net worth investor with capital to deploy in the next 12 months and you want to build passive income and wealth with a trusted partner, go to InvestWithKB.com for opportunities to invest in real estate projects alongside Kevin and his team.
- Looking for the ultimate guide to passive investing? Grab a copy of my latest book, The Cash Flow Investor at KevinBupp.com.
- Tap into a wealth of free information on Commercial Real Estate Investing by listening to past podcast episodes at KevinBupp.com/Podcast.
Transcript
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| 0:00.0 | Hey guys, Kevin Bup here. Just wanted to make a quick announcement about our Wednesday Mobile Home Park show that you're about to listen to. |
| 0:06.4 | These Wednesday episodes are in collaboration with my other podcast, the Mobile Home Park Investing Podcast, many of which were recorded a few years ago. |
| 0:14.1 | I've carefully hand-selected only material that I feel is still relevant today, but there's a chance you might find references that could be outdated |
| 0:20.8 | at present, such as website URLs. Thanks for tuning in, and now on to the show. Welcome to this |
| 0:28.1 | week's Mobile Home Park Investing Podcast that will teach you how to successfully invest in and build |
| 0:33.6 | steady streams of passive income from the highly lucrative niche of mobile home parks. |
| 0:38.3 | With decades of experience, Kevin Bup will personally share with you the valuable lessons he's learned along his journey, |
| 0:44.3 | so that you too can learn how to generate cash flow and build legacy wealth for you and your family. |
| 0:51.3 | Now, without further ado, let's welcome your host for today's show, Kevin Bubb. |
| 0:57.4 | Welcome guys and gals to the Mobile Home Park Academy's weekly podcast. I'm your host, Kevin Bup, |
| 1:02.4 | and just in case you're tuning in for the very first time, I want to let you know that today's |
| 1:06.6 | episode is a little different from our normal weekly show. But don't you worry, I'm still 100% |
| 1:12.3 | positive that you'll find a ton of value if mobile home park investing is what you came here to |
| 1:17.2 | learn about. You see, many, many, many, many, many, many, many months ago, actually a little bit |
| 1:22.5 | more than a year and a half ago, to be exact, Charles and I, we created 21 special release episodes showcasing the 21 |
| 1:29.5 | biggest mistakes that we see new investors make when entering into the mobile home park |
| 1:34.0 | business, and our original intent was to release one episode per week in addition to our normal |
| 1:39.2 | weekly segment. But sadly, we got sidetracked and we only ever released the first seven shows. In fact, |
| 1:45.6 | you can actually go back and listen to these first seven mistakes by going and listening to |
| 1:49.8 | episodes number two, four, six, eight, ten, twelve, and fourteen, on our podcast. And I would |
| 1:55.7 | actually suggest that you do that if you haven't done so already. And so as a special treat, |
| 2:00.0 | we're actually going to be posting two to three episodes each and every week until we get all 21 of them out. And then after |
... |
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