Scaling Financial Model: Mobile Home Park Acquisitions and/or Developments
Latest Updates: monthly and annual three statement model added as well as a capitalization table. Also added new logic for park-owned homes option and other ancillary income.
Video Overview:
Mobile Home Park startup funds can be a great way to enter the affordable housing market. This Excel financial model was designed to account for the acquisition and/or development of 1 to 40 MHPs and organize all the cash flows on the same timeline (up to 16 years). It is possible to enter an exit month and exit cap to see the terminal value at any point in that timeframe as well.
Each of the 40 MHP slots has the option for the user to define how the acquisition/development is financed, how long it takes to start collecting rent, and a range of drivers for revenues over time and operating expenditures. There are a few options for debt logic. Globally, the user can define if there is just a single loan with an interest only period or no interest only period and principal and interest right from the start. Also, the next global input is if there is going to be refinancing and if so, how much time is in-between the first loan and the refinance loan as well as all the relevant inputs therein. Each of the MHP slots can be financed with all equity, all debt, or some combination.
Each of the 40 slots has the following input entries for defining operational cash flows over the life of the given park:
Unit Count
Starting Weighted Avg. Lot Rent
Lot Rent Growth (year 2-4)
Stabilized Rent Growth (per year)
Initial Occupancy
Vacancy Improvement per Month
Stabilized Occupancy 3rd part contractors
Turn Over
Repairs & Maintenance
Marketing & Advertising
Management Fee
Payroll
Administrative / Other
Utilities
Electric
Gas
Water Sewer
RE Taxes
Property Insurance
Extra Field 1
Extra Field 2
Extra Field 3
Extra Field 4
Annual Expense Growth
The above assumptions are all taken into account on the same 16 year timeline on a monthly and annual pro forma. The resulting annual cash contributions and distributions are then visible. Up to three waterfalls can be used if the user wants to account for various financing options with a joint venture structure. This means a Limited Partner and General Partner. There is a standard 3-tier IRR hurdle waterfall, a preferred equity only waterfall (hard), and a preferred return waterfall. The results of all three are shown at the same time to make it easy to compare potential joint venture distribution schemes.
