In November 2019, the Keel Team and investment partners purchased an 80 lot mobile home park in western Iowa for $1.4 million.  Through improvement initiatives such as: filling vacant pads, removing run down homes, converting utility payment from park paid to tenant paid, modest lot rent increases, and others, we were able to improve the park operations, increase NOI, and achieve a significant value increase.  The financial results of these efforts are summarized below:  

 

Original acquisition price: $1,400,000 (November 7, 2019)

 

Equity: $840,000.00 initial cash investment from partners

Debt: Recourse debt for both partners

 

7% Preferred Distributions Paid Monthly, Starting in Month 8:

 

• July 2020: $27,256.30

• October 2020: $11,853.78

• January 2021: $11,853.78

• April 2021: $12,125.35

• July 2021: $14,711.26

• October 2021: $14,519.40

• January 2022: $14,682.49

• March 2022: $11,812.51

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Total Preferred Distributions Paid to Investors: $118,814.87

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• March 2022 refinance event cash out: $1,205,640.32

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 Cash Out Refinancing Event

March 11, 2022

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The new debt is non-recourse, Fannie Mae agency debt.

 

Summary:

 

$118,814.87 Preferred Distributions

$1,205,640.32 Cash out Refinancing Distribution

$1,324,455.19 Total Distributions

($840,000.00) Initial Equity Investment

$484,455.19 Total Return on Capital

 

Timeframe:

28 months = 2.3 years

 

ROI:

25.08% annualized cash on cash ROI 

 

​Future potential ROI opportunities:

• Infinite returns since all of the original equity investment has been returned, yet we still own the MHP

• Additional supplemental loan available 12 months after refi (possible additional future returns per refinance loan terms)

• Forced savings of approximately $1,508,000 due to the equity remaining in the property after the March 2022 refinancing event

• Additional potential equity appreciation as the MHP continues to increase in value